Second submarine line for Mazagon Dock

By- Business Standard

With public sector shipyard Mazagon Dock Ltd (MDL), Mumbai, years behind schedule in building six conventional Scorpene submarines for the Indian Navy, the Ministry of Defence (MoD) is handing Mazagon Dock another lucrative order to build three more submarines. Although private sector shipbuilders — especially L&T and Pipavav Shipyard Ltd (PSL) — argue that Mazagon Dock already has more than it can handle, MoD insists the public sector shipyard can execute this order.

The MoD’s Secretary of Defence Production, R K Singh, talking exclusively to Business Standard, has detailed Mazagon Dock’s road map for simultaneously executing the Scorpene order (Project 75, as it is termed) and the three additional submarines that are a part of the six-submarine Project 75I order.

Business Standard had reported yesterday that the MoD’s apex Defence Acquisition Council (DAC) had ruled out India’s private sector from Project 75I. The first two submarines of Project 75I will be built abroad in the foreign collaborator’s shipyard. The other four submarines will be built in MoD-owned shipyards: recently acquired Hindustan Shipyard Ltd will build one, while MDL builds three.

R K Singh explains, “First, the Scorpene delay will be trimmed down to less than 18 months. The original plan was for the first Scorpene to be delivered in December 2012; and the other five submarines at one-year intervals till December 2017. While the first Scorpene will only be ready in August 2015, Mazagon Dock will deliver the others faster, at nine-month intervals, and finish the last Scorpene by May 2019.”

MoD sources say Mazagon Dock is being pushed towards an even more ambitious delivery schedule: Of one Scorpene every seven months. On August 11, Defence Minister A K Antony told Parliament that Project 75 would complete work by the second half of 2018.

But Project 75I, argues R K Singh, does not have to wait till then; it can begin as early as 2012. By that year, with all six Scorpene hulls fully built, the specialised hull workers and welders of Mazagon Dock could begin fabricating hulls for Project 75I.

Singh explains, “Two Scorpene hulls are already built and MDL is close to completing the third. By early 2012, all six Scorpene hulls will be ready. MDL’s hull fabrication shop — which cuts steel for the hull, rolls it, fabricates hull segments and then welds them together into a complete hull — will be sitting idle from 2012, and ready to be diverted to Project 75I.”

The Department of Defence Production also points out that Project 75I cannot begin for another five years. At least 12-24 months are needed for a Cabinet sanction for building the first two Project 75I submarines abroad. Selecting a foreign shipyard as collaborator for Project 75I will take another 24-36 months and then one year for price negotiations.

The six Project 75I submarines will be built on a new production line, on which work has already begun. During a visit to MDL in 2009, Business Standard was shown a 16-acre plot, adjoining MDL’s facilities in Mazagon, Mumbai, which the shipyard had acquired in the 1980s from Gujarat state PSU, Alcock Ashdown.

R K Singh confirmed, “We are going to execute Project 75I in a new yard, the Alcock Yard, on which MDL is building a second submarine production line.”

Private sector shipbuilder Larsen & Toubro finds the MoD’s decision to patronise Mazagon Dock inexplicable. L&T sources say the company was given to understand that they would participate in Project 75I as the second submarine line. Now, L&T’s experience and infrastructure would lie idle.

Global giants line up for $10-bn IAF aircraft deal

BY: The Indian Express Limited

Top leaders of the world are lining up for a $10-billion Indian order for 126 fighter aircraft. Companies from the US, France and Russia have put in their bids for the 126 MMRCA for the Indian Air Force (IAF) and the visiting leadership are expected to lobby with their counter parts. The US President Barack Obama’s visit in November will be followed by the French President Nicolas Sarkozy’s in early December and later by the Russian President Dmitry Medvedev.

Sources told FE on conditions of anonymity that, ‘‘the six contenders have yet to be shortlisted. The defence ministry can decide on shortlisting the contenders only once it have the technical offsets evaluation committee report along with the Field Trial report.’’

‘‘After it goes to the Cabinet Committee on Security for a final decision, there will government-to-government negotiations in an effort to get additional benefits for the country,’’ the source added.

American companies, Lockheed Martin F-16IN, Boeing F/A-18, French Dassault Rafale, EADS Eurofighter Typhoon, Saab Gripen and Russian MiG-35 are in the running for the 126-aircraft programme.So far the IAF has had a meeting with Lockheed Martin and the French ‘Dassault’ of Rafale.

According to sources, ‘‘Vendors who are compliant rule wise, Defence Procurement Policy and Technical offsets will ultimately be opened for consideration. Also, the lowest bidder, designated L1, will be selected as the medium multi-role combat aircraft (MMRCA).”

The whole procedure is expected to take a couple of months and by then Obama will be here. ‘‘While the MMRCA deal will be topping the agenda. Several other pending deals including the medium weight helicopters where the RFP is likely to be scrapped will be talked about. It is expected that India could ask the US for encryption technology too.’’

French President Nicholas Sarkozy and his wife Carla Bruni will arrive on a two-day visit on December 6-7. ‘‘Definitely MMRCA deal come up for discussions. Eventually the selection of the MMRCA will be political decision,’’ said officials.

Apart from inking pact for the supply of two reactors, India and France will also sign a $2.2-billion deal to upgrade its Mirage fleet. The upgrade deal, which had been hanging fire for the past two years due to differences over the price, is now ready to be inked, sources in the defence ministry said.

France is also keen that India approve the Maitri air-to-surface Low-Level Quick Reaction Missile (LLQRM), which has been jointly developed by the.DRDO and France’s MBDA. While the missile’s final design has been locked up, the government is still to give a go ahead for the joint project.

Though India and Russia are implementing several joint military programmes, the most important are the production and upgrading of the BrahMos missile and the construction of fifth-generation supersonic fighters, among other things.The MiG-35 is one of the contenders for the MMRCA is a MiG-29. The presence of MiG-29 infrastructure and a new plant for licence-building RD-33 Series III engines in India makes compliance with industrial offset requirements easier. The Russians are keen to sell the MiG-35 to the IAF, and could possibly on the agenda of talks.

US pushes defence as ‘central pillar’ in ties

BY: BUSINESS STANDARD

The battle to re-engine the Indian Air Force’s 128 Jaguar fighter jets is in full throttle, with Britain’s Rolls Royce and US’ Honeywell International taking the war back home right inside the rarefied offices of South Block.British Prime Minister David Cameron’s recent comments in Bangalore on the “export of terror” by Pakistan have enormously pleased the Indian strategic establishment, but the fact is that India is already gearing up for the November visit of US President Barack Obama and is keenly aware that there is nothing like a defence deal to sweeten the mood.For example, the Jaguar engine deal is worth an estimated $670 million, a lucrative sum in the recession-hit economies of the US and the UK and definitely welcome in an era of rising unemployment, emptying treasuries and never-ending body bags from the AfPak war front.

On the other hand, as India prepares to overhaul, upgrade and buy new defence equipment for its armed forces — by 2022, military equipment worth $100 billion is likely to be purchased, besides another $9.7 billion on homeland security by 2016 — and the world’s top defence companies make a beeline for New Delhi’s door, it is aware that defence cooperation is becoming its chief instrument in the pursuit of its foreign policy objectives. That is why, as India and the US prepare for Obama’s four-day India visit, Washington DC is pushing New Delhi to recognise that “defence cooperation is the central pillar” in the expanding bilateral partnership, the president of the US-India Business Council Ron Somers said.

According to Somers, deeper defence collaboration would not only generate thousands of jobs in India and the US (because of India’s offset policy), but would also signal that the US is no longer an “unreliable supplier of defence goods as well as open up technological collaboration” in every sector.Defence Minister A K Antony is visiting Washington DC towards the end of September, and even though India typically shies away from concluding defence deals during political visits, many Americans feel it’s high time India compensates the US for the “heavy-lifting” it performed by pushing through the Indo-US civil nuclear deal from 2005-2008.

Typically, however, the government has followed the middle path so far, awarding the Hawk Advanced Jet Trainer deal to UK’s BAE Systems, besides an additional $350 million to Rolls Royce for engines for the Hawk — both for the IAF as well as for the Navy.“For a middle power like Britain, that is good money,” said an Indian official on the condition of anonymity.Meanwhile, over the last year, India has also bought nearly $6 billion worth of defence goods from the US, including six C-130 J “Super” Hercules transport planes (with the option to sell six more), 10 C-17 Globemaster-III strategic lift aircraft worth $3 billion (with the option to sell 10 more) as well as eight Boeing maritime surveillance P-8I aircraft worth $2.1 billion.

But since the jewel in the crown of the Indian defence market — a 126-fighter jet order for the IAF’s Medium Multi-Role Combat Aircraft (MMRCA) worth $11 billion — is not going to be decided by the time Obama visits India, the US government is hoping that India will also favour Honeywell’s F125IN thrust class engine over Rolls Royce’s Adour MK 821engine for its Jaguar fleet.“An enhanced defence relationship is of huge symbolic importance,” one US official said, adding, “it sends a powerful political message on the marriage of doctrine and strategy.”

Indian officials admitted that although Russia continued to supply 70 per cent of the IAF’s hardware, the MMRCA deal was significant not only because of the large number of new fighter jets IAF would buy, but because entire platforms worth many more billions would have to be purchased so as to sustain the proper use and maintenance of the jets. But the US officials also admitted that the heightened interest in selling sensitive defence equipment to India was not limited to “transactional gains”, but was also impelled by shifting strategic considerations in other parts of Asia.

The officials were not willing to name either Pakistan — despite the exposes by Wikileaks of Pakistan’s “double-game” on the AfPak warfront — or China’s recent belligerence in the Yellow Sea as serious causes of concern, but it’s clear that for the first time since the Obama administration came to power, the US is both confused and bewildered about the manner in which it should confront China’s rising power or Pakistan’s blunt blackmail.

Beijing’s warning that the US aircraft carrier, USS George Washington, should not exercise in the Yellow Sea has gone down very badly in Washington, and is being perceived a direct challenge to the security and safety of its treaty ally, South Korea. In recent days, a compromise seems to have been struck, with Korea stating it would conduct exercises on its own.On Af-Pak, conversations between India and the US are now dominated by considerable frankness, but the Sino-US relationship remains a far more complex issue. US officials, pointing to China’s incredible rise, say they would like India’s help in maintaining Asia’s security and stability, especially to keep the sea-lanes open for navigation.

It is not clear whether Antony will sign three key pacts the US has been pushing for, like the Logistics Support Agreement (LSA), the Communication Inter-Operability Agreement (CISMOA) or the Basic Change and Cooperation Agreement for Geo-Spatial cooperation.

The US is keen that at least the CISMOA and the BECA be inked soon, arguing it will only pave the way for removing key Indian entities from the US export control list or that the transfer of high-tech avionics to India may not be possible.But India remains unfazed, arguing that Indian entities like DRDO, ISRO and BEL should be removed on their own merit and that the “time has not yet come” for pacts like the LSA which envisage US and Indian militaries providing logistics support, refuelling and berthing facilities for each other’s warships and aircraft.

IAF Recommends Rafale & Eurofighter For MMRCA-Times Now

After exhaustive trials of six fighter jets, Indian Air Force (IAF) has made its choice clear to the Government on the kind of fighter jets needed. Frontrunners for the force are French fighter Dassault Rafale and the Eurofighter Typhoon built by the European consortium. Bernhard Gerwert, Chief, EADS, says “If you are taking into account the portfolio of EADS we can bring the bridge between civil aviation and military aviation.” But the Americans and Russians have lost out. Boeing’s F18 no longer a frontrunner and Sweden’s Gripen too falling off the Indian radar.

Despite MiG 35s big thunder, its engine failing to impress while the F-16, according to the IAF has no future. Another reason favouring Rafale and Eurofighter is political. Thomas Matussek, German Ambassador, “We regard India as a strategic security partner and this is why we do not insist on an end user monitoring agreement period.” So when the mother of all defence deals is signed for the 126 Multi-Role Combat Aircraft either Rafale or the Eurofighter will fly away with the Rs 42,000 crore deal.

$ 10 bn combat jet deal eyes strategic 'leverage'

By India Today

The Indian Air Force is set to acquire 126 medium, multirole combat aircraft (MMRCA) and the current talk in the Vayu Sena Bhavan is to "leverage strategic gains" out of the $ 10-billion deal.As the compilation of the flight test results nears completion, the process of hard bargaining is set to begin.

A senior air force officer told Mail Today: "We should use the deal to get concessions on enrichment technology, and accessing dual use technologies that we are denied at the moment." However, before negotiations on these aspects are addressed, a few steps need to be taken first.

The first shortlist for the six types of aircraft-MiG-35, Rafale, Gripen, Eurofighter, F-16 and F/A 18 Super Hornet - will be prepared by the air force on the basis of "complying with the operational requirements of the Indian Air Force", an official explained.

As is the norm, senior air force officers have remained mostly tight-lipped about which aircraft have or haven't made the cut in terms of fulfilling the operational requirements, although some information seems to have trickled out regarding the flight tests wherein one or two of these six aircraft failed to develop "enough thrust" in the high altitude tests held at Leh.

After the air force lists the aircraft that have complied with its "technical" requirements, the ministry of defence will judge the "offset compliance" of the selected manufacturers. In simple terms, that would mean how much of the money would be ploughed back into the Indian economy.The 'offset' requirement for the MMRCA deal is 50 per cent. This means that close to $ 5 billion would have to be reinvested into India by the company winning the bid.

After this, the "commercial bids" of each would be opened by the defence ministry mandarins, who will, for the first time, examine the commercial offers made by the companies more than two years ago.

For the first time, a new system of costfixing has been introduced that not only takes into account the unit prices but also calculates the 'life cycle costs'-which takes into account the cost of maintenance and spares for the period, estimated at 40 years, the aircraft would remain operational.

On the basis of this, the lowest bidder (L1) would be determined by a commercial negotiation committee headed by an additional secretary of the ministry. The committee will also have members of the service headquarters of the army, navy and air force. They would then conduct price negotiations with the L1 bidder to improve upon the initial offer.

Finally, a paper would be prepared for the Cabinet Committee on Security that would have to give its seal of approval and award the contract. It is at this stage, before the contract is awarded, that government-to-government negotiations would be conducted to get the best additional benefits for the country.

The sheer size of the MMRCA deal ensures that India will get a high level of attention from each of country vying for the largest defence contract in recent memory.

India is evaluating the advanced Patriot ground-based air defence system

By PTI

India is evaluating the advanced Patriot ground-based air defence system for its ballistic missile shield and the US has provided “classified” material to it on the weapon unit, which was successfully used during both Desert Storm and Operation Iraqi Freedom, Patriot’s manufacturer Raytheon said today.

A number of exchanges have taken place between the government of India and the US and information has been given to India at the classified level,” Joseph Garret, Vice President of the company’s Patriot Programmes told PTI.

Replying to questions, he said tests of the Patriot system, which has been procured by 12 countries, by India’s Defence Research and Development Organisation and other agencies had been “highly successful”.

On India developing its own missile defence shield, Garret said, “Patriot system gives a major boost to any country’s defence capability. India may be developing its own system, but Patriot is a combat-proven weapon system.”

Another senior official of Raytheon, a defence and aerospace major, said Washington and New Delhi have also discussed the issue of India-specific end-user accords.“If the US government gives a go-ahead, Raytheon will step in,” he said.

Since its production began in 1980, more than 170 Patriot fire units and over 9,000 have been delivered by the company.The countries which have acquired the weapon system, were Germany, Saudi Arabia, Kuwait, the Netherlands, Japan, Israel, Taiwan, Greece, Spain, South Korea and the UAE.The weapon system’s capabilities were demonstrated in 1990 following Iraq’s invasion of Kuwait.

“Patriot’s performance against Iraqi SCUD missile attacks were impressive, even though the SCUD missiles exceeded Patriot’s design threat,” he said.Top company official Taylor W Lawrence, President of Raytheon’s Missile Systems, said India is also looking at the ‘Javelin’ anti-tank and anti-armour missile ‘and a ‘letter of intent’ is expected to be issue soon.“Javelin has been fully tested by the Indian land forces. We expect a letter of intent from the Indian government,” he said.

India in talks for buying 57 additional Hawk advanced trainers

BY: PTI

India is in the process of finalising with the UK the terms of reference for buying an additional 57 Hawk advanced trainer for the Indian Air Force, minister of state for defence MM Pallamraju said today.“The government has decided to exercise the option of buying an additional 57 Hawk trainer jets manufactured by the British Aerospace. Details of the contract and the terms of reference of the deal are being negotiated with the UK,” Pallamraju, who is leading Indian delegation to the Farnborough Air Show, the biggest in the world, told PTI.

India, which had earlier signed a deal for purchase of the two-seater Hawk trainer planes, has already received 24 of the single-engine aircraft in a fly-away condition. Of the another 42 of the planes, which were to be produced by the Hindustan Aeronautics Limited, six have been supplied to the IAF.The Hawk, which can also be used as a combat aircraft, provides advance stage three training to IAF pilots. It can fly at a maximum speed of 1.2 times the speed of sound.

The minister, who is on a six-day visit to the UK, refused to give a time-frame for finalising the terms of reference of the multi-billion dollar deal.The Hawk is used by the Royal Air Force and 900 of them have supplied to 18 countries so far.Pallamraju, who has been interacting with top armament manufacturers in Farnborough, said he told them that they stand a better chance of bagging orders from India if they agree to make the country self-reliant in weapon systems.

The minister, who arrived in London on Saturday, had met top brass of Russian weapons manufacturers, British Aerospace, EADS, Saab, Lockheed Martin and Raytheon. He has also had a meeting with Prince Andrew, who is Britain’s ambassador for industry.Many of the firms Pallamraju interacted with are bidding for the 126 multi-role combat aircraft (MRCA) India is proposing to buy. He also had meetings with Israeli arms producers.Pallamraju said he conveyed to international arms producers that India has initiated the “buy and make policy” under which any Indian company entering into a contract with a foreign firm has to manufacture 50% of its systems in the country in terms of value to allow job creation. The rest 50% can be imported, he said.

“The modes of acquisition have been several. One is to buy directly from a foreign company, another is to purchase and ensure transfer of technology while yet another is to buy and make in India. We have given a message to the defence public sector undertakings to get the latest technology under the buy and make policy without involving outright purchases,” the minister said.

The buy and make policy also involves availability of spares for weapon systems in times of emergency and ensures that India becomes self-reliant, he said, adding that the effort is to ensure that the best available technology comes in.

“I have had an opportunity in Farnborough to see the the technology offers by armament manufacturers. I have also had occasions to discuss a number of issues which had been outstanding,” Pallamraju said.