THE BIG PICTURE: The path ahead for HAL - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 19 February 2009

THE BIG PICTURE: The path ahead for HAL

Above: A weaponised Dhruv painted in display colours at Aero India 09

Left: A Tejas LCA taxi-ing out for an aerobatics display at Aero India 09

by Ajai Shukla
Business Standard, 19th Feb 09

The recent Aero India 2009 exposition in Bangalore highlighted the successes, as well as the challenges, lying ahead for Hindustan Aeronautics Limited (HAL), India’s only major aeronautical developer and manufacturer. On the plus side is the growing acceptance of HAL’s flagship Dhruv Advanced Light Helicopter (ALH). India’s military has ordered 159 Dhruvs and the air show marked HAL’s first success in a global tender with the delivery of 5 Dhruv helicopters to Ecuador. The Tejas Light Combat Aircraft (LCA) also demonstrated, with an exhilarating display of aerobatics, that it has overcome many of the challenges that had stalled it for decades. 

One swallow, however, or even two swallows as in this case, do not a summer make. HAL’s biggest ongoing helicopter programme, the Light Combat Helicopter (LCH), is encountering delays: its first flight has been postponed by a year to the end of 2009. HAL’s ambitious timeline for the LCH rested on a plan to recycle many of the technologies already proven in the Dhruv; the company failed to provide a cushion for the uncertainties of aeronautical design. Such overconfidence runs the risk of undermining the confidence of the military, painfully created by the success of the Dhruv and Tejas programmes.

HAL also faces a crucial test in the MoD order for 187 Light Utility Helicopters, which it must develop and start to deliver by 2015-16. A delay in this programme will not just undermine user confidence, but invoke penalty clauses; for each year of delay, the MoD will reduce the number of helicopter that it will buy from HAL, procuring them instead from the international market.

The new, tough, competitive playing field is changing mindsets in HAL; there is far greater reliance on commercially available foreign components and sub-systems, with HAL playing the role of an integrator and a developer of key technologies that money cannot buy. Even foreign advice is now acceptable; to overcome persistent technological challenges that continue to dog the Tejas programme, it has been decided to hire German-Spanish aeronautical giant, EADS, as a consultant.

While the abandonment of autarky is welcome, foreign assistance comes with its own pitfalls. This paper has already reported the EADS strategy to leverage its consultancy for the Tejas while participating in the multi-billion dollar competition to supply 126 medium fighters to India. It will be HAL’s difficult task to collaborate with foreign partners while simultaneously making decisions based on cold self-interest.

HAL, as India’s only aeronautical manufacturer, must also lead in creating a suitable developmental framework for building the military aircraft of the future. Currently, several government agencies --- the Defence R&D Organisation (DRDO); the National Aeronautical Laboratory (NAL); and HAL itself --- compete for design programmes. HAL is negotiating with Russia for building the 5th Generation Fighter Aircraft (FGFA); simultaneously, the DRDO has outlined plans to build a Medium Combat Aircraft (MCA). Instead, project-specific consortiums need to be built (as it was for the LCA) for each programme, harnessing the individual strengths of each of these organisations, as well as R&D capabilities within the private sector and academia.

India’s military-aeronautical development has only taken its first baby steps. Overconfidence and turf battles cannot be allowed to undermine the creation of structures and processes for building the enormously expensive aerial platforms that consume so much of India’s defence budget.


  1. Well said Ajai. No Indian worth his salt would want to see HAL failing in achieving its targets. but HAL needs to learn from its past mistakes like being over confident, jumping the gun and announcing the dates by when their projects will be over. Talk about biting off more than it can chew.

  2. ajai-ji, please update us on the status of all LSPs (as promised).

  3. "India’s military-aeronautical development has only taken its first baby steps. Overconfidence and turf battles cannot be allowed to undermine the creation of structures and processes for building the enormously expensive aerial platforms that consume so much of India’s defence budget...."

    Dear Ajay,
    I full agree with you summarising the whole military-aeronautical developmental effort of the country. In one single para (pasted above) you have correctly “crystallised”your thoughts.
    Though, I am military, BUT contrary to the general perceptions, I do believe that we as a country and HAL as a company, has made some significant contribution in aeronautical development, post independence. And like in EVERY OTHER SPHERE in the country, the TURF BATTLES seam to always undermine the collective contribution of engineering genius of the country.

    Keep up the good reporting. Enjoy reading your incisive thoughts

  4. Col Shukla, looks like the Arjun has finally been accepted.

  5. Ajai ji,

    Looks like your all previous effort on saving ARJUN is paying ...

    As above Zee news links says..

    "Indigenous MBT Arjun gets vote of support from Indian Army Chief"

    I remember numerours posts and debate in your blog last year
    on this and now if it really is what it says..that means there is a shift in two major things.

    1. Change in political equation with Russia due to it's very recent postures on matter related with Defence(Due to Mr.Putin's policy of non cooperation with India due to India's closing relationship with USA, under UPA government's rule in last few years).

    2. Change in ARMY war doctorine(more usage of heavy tank and hence giving safty of the tank and crue a higher priority)and also recent change in it's policy towards looking at other source of military hardware other than Russia (during last few years of UPA rule)even if it requirs to take a U turn on the matters like case of ARJUN TANK.

    Best Regards,

  6. Thanx heavens for the change in mind & acceptance of Arjun by the COAS. I hope 2 c dat in orders as well. Atleast DRDO shud cover its costs.

  7. The combined tri-services reqmt for LUHs is closer to 400 units, of which 187 are to be sourced from HAL, this being the 3-tonne single-engined version being proposed by HAL. But this will be available only after five years provided the R & D project receives financial allocations today. The balance of the outstanding reqmt will be imported much earlier after a competitive re-tendering process involving the Eurocopter AS.550B3, Kamov Ka-226, Bell 407 ARH and AgustaWestland A-119ARH (being jointly proposed by AgustaWestland and TATA). How exactly the end-users will reconcile with two different LUHs fulfilling the same missions is anyone's guess. In any case, HAL is the designated 'local agent' for Eurocopter for the re-tendering exercise. Therefore, how HAL will balance its conflict of interests between the AS.550B3 offer and its own in-house 3-tonne LUH offer is also anyone's guess. Can anyone now paint the 'BIG PICTURE' regarding such a state of affairs?

  8. Also, what's happening to the HTT-35, which was due to replace the HPT-32 piston-engined ab initio trainer? HAL had even built up a full-scale mock-up of the HTT-35 in the mid-1990s. Wonder what the likes of A K Antony would have to say about this, as HAL is MoD-owned. Maybe one would not be too surprised if RFPs are soon issued for importing basic turboprop trainers (Embraer's Tucano, Pilatus' PC-21, Raytheon's T-6 Texan and Korea Aerospace Industries' KT-1 will be invited to bid), with HAL 'licence-producing' them.

  9. HAL is a classic manufacturing firm. The need for this hour is an efficient manufacturing house that can churn out different products with good efficiency & quality. I think it would be vital for HAL to improve the manufacturing process rather than competing with ADA & other DRDO labs on designing. HAL will be equally respected just for its manufacturing abilities. It doesn't need to prove that it can design products and getting stuck at critical stages just by assembling off the shelf parts. btw, is it a different paint work on TD2? Looks good.

  10. Prasuh,
    did Bell not pull out of the light chopper contest since they were un-able to comply with the offsets clause?

  11. On the contrary, HAL should be the designated prime contractor, with the DRDO labs acting as technology developers only, instead of trying to take on the task of production engineering and prototype development as has been the case with the Tejas LCA. Consequently, this aircraft today is scientifically and technologically sound, but operationally unviable. Scientists cannot be expected to deliver production engineering solutions and if they try then the result is an overweight and under-engineered product. The same is the case with the Saras. And now foreign industrial assistance/consultancy is being sought from EADS make the Tejas LCA operational acceptable. If only ADA had not engaged in a turf war and had scaled down the risk factor by proposing that HAL become the prime contractor for the Tejas LCA, HAL would have would have by now had in place the kind of industrial partnerships that is now being sought. But, to be objective, the fault is neither HAL's nor DRDO's. The ones to be blamed for a dysfunctional state of affairs are the ultimate civilian decision-makers that are in South Block.
    Additionally, HAL cannot become an aerospace entity with balanced civilian and military order books if it is whooly owned by the MoD and is prevented from exploring business opportunities in the civilian aerospace sector. The Chairman of HAL ought to have complete corporate autonomy, and have free availability of funds required for investments as required, instead of knocking at the doors of the Joint Secretary or Financial Adviser to the MoD to clear investments on a case-by- case basis. For this to happen the MoD has to undertake a divestment programme and make HAL a public listed entity, while retaining a golden share. The discredited policy of retaining companies like HAL as whooly MoD-owned must be done away with.

  12. To Anon@03:54: No, Bell withdrew along with Boeing for the attack helicopter contest. For the LUH contest Bell is very much in.

  13. Prasun, it seems that the HPT-32 will be replaced by latest version of Hansa.

  14. Hansa is history anon. Just like the LCA, it was built by scientist and not engineers.

  15. Prasun,
    as much as I respect you, I am afraid you might be wrong on the Bell 407.
    Please refer to page 4.Bob Fitzpatrick clearly says Bell is out.

  16. I do not agree that project-specific consortium need to be built. The only way deadlines can be met is through ensuring competition among corporates. The emphasis should be on building a competitive aeronautical industry first only then they can deliver competitive products.
    If you think that a Gen 5 fighter project is to big to allow HAL and DRDO to slug it out then we already know that we are biting more than we can chew. This is what happened to LCA. Maybe we should then try something smaller like a UAV competition perhaps.
    We have to get over the obsession to bridge the technological gap with developed world in all areas at the same time. This is a recipe for more failures.
    ADA was a non starter. the truth is that we can't even design the LCA landing gear without foreign help.

  17. To Anon@09:31: The interview you refer to does not say from which of the two competitions Bell Helicopter Textron has withdrawn. However, it is true that when the RFIs for the 384 LUHs were released last July, Bell refused to submit its answer. And last May Boeing and Bell both refused to respond to the RFP (tender) for the 22 attack helicopters. Both RFI and the RFP are now being redrafted to enable the two US companies to participate. HAL too has only submitted a proposal (its response to the RFI) thus far for supplying 187 LUHs made to a homegrown design. But it has not yet received the green light and funding from the MoD to proceed with the R & D effort. Therefore, the reqmt still remains 384 units of the LUH and they're likely to be supplied by a single OEM.

    To Harpreet@10:48: In today's world unless you're a $10 trillion economy you just can't have competitive bidding among India-based corporates. Even Russia has had to merge RAC-MiG and Sukhoi Aircraft Corp to form United Aircraft Corp. To give you an example of the sorry state of competing corporates in India just look at the mini-UAV solutions already devised by the likes of TATA and SPECK on one hand, and HAL on the other. Now, why do you think a MoD-owned company like HAL would take part in a competition in which the private sector has already produced mature solutions? Unless 'the match has been fixed in advance' and someone in MoD has already assured HAL that it will win the contract despite the charade of a competitive bidding process being enacted.

  18. To Anon@07:45: The Hansa-4 belongs to the experimental category as far as CofA goes, and is not built to MILSPEC standard. On these two grounds alone the Hansa cannot even be considered as a suitable replacement for the HPT-32. Furthermore, the Hansa is not powered by a turboprop engine, whereas the IAF's reqmt calls for a basic turboprop trainer.


    Woo yea, HTT-35, exactly... i did indeed hear about the HTT-35 and its supposed tests in the 90s?? Where is it?? Is the project cancelled? Or did that morph into the NAL Hansa? Are they related?
    Please shed some light on this project that you ressurected from the closet. I really forgot about it. Regarding Hansa not fulfilling Milspec requirements, are ANY of Indian aircrafts like Kiran and HPT-32 compliant?

  20. Regarding the basic turbo-prop trainer HAL is coming up with HTT 40. I remember seeing a an artist's impression of the aircraft at AI09. This aircraft will replace HPT-32 and it is powered by a turboprop eng. Hansa 3 is a two seater basic trainer and is not capable of aerobatics. It can never be a contender to this class. And further there are no plans in NAL in making such an aircraft.BTW 15 aircafts of Hansa are already flying.

  21. NAL is very much into making a five seater general aviation aircraft NM5 in partnership with Mahindra. This aircraft is meant mainly for civilian operation and HANSA, SARAS and NM5 will be complying to FAR certifications.

  22. To Anon@12:02: FYI, the HT-2, HPT-32, HTT-34, HF-24 Marut, Gnat/Ajeet, HJT-16 Kiran Mk1/2,Dhruv ALH, HJT-36, Hawk Mk132, Jaguar IS/IM, MiG-27M, Su-30MKI, FGFA, Tejas LCA and Mi-17V-5 are all 100% built to MILSPEC standard. As will the selected M-MRCA, attack helicopter, LCH and the LUH. The HTT-35 was due to be powered by either Pratt & Whitney Canada engines (like on the Pilatus PC-9) or the Garrett (now Honeywell) TPE331 engines (the very same ones powering the Dornier Do-228 and the Tucano) that HAL was licence-assembling since the mid-1980s. But the engine selection never took place for the HTT-35 and I guess the full-scale mockup is rotting somewhere. At that time in the late 1980s and early 1990s S C Chopra and later R N Sharma were the successive CMDs of HAL. But the HTT-35 'disappeared' from 1996. I had between 1989 and 1995 seen its scale models displayed during the Paris & farnborough Air Shows ast the HAL booth.

    To Thaariq: That will be the day, when the HTT-40 takes to the skies. Judging by the problems the HJT-36 is facing it will be many more years before financial allocation is accorded for the HTT-40. And by that time more than 100 imported basic turboprop trainers will be operational with the IAF's Training Cmd. I'm betting on the Embraer Tucano winning the IAF tender by the year's end.

  23. @Anon-20 February 2009 09:26.

    Regarding your comments abt HANSA, I would like to mention that HANSA is the first indian all composite aircraft. The design philosphy of the structure is very much different from conventional aircraft structures which Indian engineers are used to. This is one of the reason for its delay and remember HANSA is NAL's first aircraft.

  24. Check out the following two weblinks:

    The info from those two links indicate that HAL will licence-build the selected basic turboprop trainer as the reqmt is urgent and there's not enough time to develop an in-house solution, which in any case up to eight years to fructify.

  25. Scientists cannot be expected to deliver production engineering solutions and if they try then the result is an overweight and under-engineered product.

    Scientists have to account for the weight while designing. They even should care about the material to be used. If they care about the material to be used, then they should have considered the weight of their final product. Design parameters should have included that. If they didn't, it would be prudent to call them as a CAD designer (with some fluid dynamics knowledge) not a scientist.

    As the situation goes, it looks like ADA is filled with scientists who want to be CAD designers and HAL is filled with production engineers who want to be scientists. Let them do their own jobs, ADA do only design (proper design) and HAL do only manufacturing.

    Going by Prasunji's logic, HAL personnel has to be multifaceted with both designing skills and production engineering skills.

    Even if HAL is going to design, it will have them departmentalized as design office and production office.

  26. To Anon@13:48: HAL's business logic long predates my sense of logic and hence HAL has successfully designed in-house various products like the HT-2, HPT-32, HF-24 Marut, the HJT-16 Kiran, the Dhruv ALH and the HJT-36, to name a few. This being the case, conventional wisdom would have suggested that even the Tejas LCA be designed by HAL, with the DRDO developing the various on-board avionics-based sub-systems and the LCA's turbofan, since India has never had dedicated industrial enterprises devoted to the development of aircraft engines and avionics. So why was ADA entrusted with the task of designing and developing the Tejas LCA? Why duplicate the aircraft design and development expertise already available to HAL? What's the logic behind this, other than just another needless turf war between the DRDO and HAL? Who were the decision-makers behind this duplication, at a time when even in Russia today the OKBs are an integral part of the aircraft production enterprise, i.e. OKB Sukhoi and OKB MiG being part of United Aircraft Corp? Will history now repeat itself with HAL involved with the FGFA, and ADA now lobbying for scarce R & D funding for its MCA dream project? Why can't ADA instead concentrate on developing UCAS-based technologies and technology demonstrators based on its MCA concept, instead of offering it as a competitor to the FGFA?

  27. prasun actually marut was designed by KURT TANK and Dhruv by MBW.

  28. I feel that HAL should either be either a defense manufacturer or a defense designer.

    HAL has matured enough to spin off the respective divisions in these directions as separate entities, linked to each other.

    These will help India in the long run.

  29. Sorry for long comment but we need some reality check here..

    Prasun - Quoting you..
    "HAL cannot become an aerospace entity with balanced civilian and military order books if it is whooly owned by the MoD and is prevented from exploring business opportunities in the civilian aerospace sector. The Chairman of HAL ought to have complete corporate autonomy, and have free availability of funds required for investments as required, instead of knocking at the doors of the Joint Secretary or Financial Adviser to the MoD to clear investments on a case-by- case basis"
    This is so naive!! Do you realize that at the current production quantum for each model that HAL is manufacturing, and given that a lot of it is assembling rather than manufacturing (less value add), HAL will never have the funds or the wherewithall to sponsor NPD (New Product Development) on its own given the associated risks.
    If you expect HAL to function like a private organization then all rules governing the private industry need to be applied to it. Otherwise we will be stuck in the self defeating process of subsidising public sector enterprises wherein Govt of India has already wasted a lot of money!!

    Rules applied to pvt sector -
    1. Raising funds for R&D/ manufacturing/ other CAPEX/ OPEX associated with projects. (Right now they just have to endure the slow MOD process.. No way they can stand up to the due diligence associated with raising pvt equity)
    2. Accountability for money invested - ensuring ROI
    3. Economies of scale to justify manufacturing setup cost. Eg There is no way that 20-40 LCA Mk1 can be manufactured profitably anywhere!
    4. Competing on equal basis with other private Indian/ International products for orders from IAF/ IA.. (we are not even talking about exports here)
    5. Govt of India will sponsor defence initiatives because of National security concern.. why civilian? I thought the days of state owned enterprise were over!! (Thank god for that)
    5. "Free availability of funds" is the trashiest thing I have ever heard... even for public sector - and you want the same for an autonomous setup! Care to elaborate where the "free" funds will come from?

    Dude.. some basics of business we conveniently forget while berating our Govt/ public institutions!!

    Fact - Indian aviation sector is nascent and needs Govt support.. nothing wrong with that. pump as much money as required and then some more, but then dont talk about removing Govt interference so cooly as they are the ones giving the moolah. Its a basic tenet of Business, nay life.. If X is giving money to Y for some work then Y is accountable to X for the work..
    We can talk about autonomy when HAL is divested OR Listed OR financially independent.. some time to go before that...

  30. Prasun

    Bell has indeed withdrawn from the RSH and attack helicopters tender. Infact, that ws the most asked question at Aeroindia 2009, if u wr thr. They have clearly stated that they cannot meet the offset obligations and therefore are withdrawing. Besides, if tehy cant meet offsets for attack helicopters which is a smaller tender, how do u expect them to meet the offsets for the RSH tender? If you see the stories that have appeared in the media regarding bell, they all use the lame "commitment to India" angle. Well, my question is, if Bell has "big" plans for india.. are they bigger than those of the contenders willing to fulfil teh obligations?? Honestly, i wonder if offsets are really the reason!


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