Next-gen fighter jet war heats up, protests reach design body
New Delhi: The high-stakes battle to develop India's next-generation fighter jet is heating up, with protests reaching design body Aeronautical Development Agency (ADA) on the terms and conditions for the selection of a manufacturing partner.
Sources said Hindustan Aeronautics Limited (HAL) has submitted to ADA that the qualifying terms and conditions when it comes to financial performance of companies are skewed against it. ADA had, in June, floated an expression of interest (EOI) -- akin to a tender -- inviting Indian companies to participate in the ambitious project to manufacture at least five protoypes of the Advanced Multirole Combat Aircraft (AMCA). The last date of submission has been extended to September 30 and meetings have already been held with prospective competitors.
As per the plan cleared by the defence ministry, Indian companies -- both private and public sector -- would compete to become a developmental partner for the project to first manufacture the prototypes and later get larger orders once the fighter jet has been certified for induction. Prior to the EOI, several private sector companies had conveyed to the ministry that they would be hard pressed to compete against HAL for the major project. The common line taken was that the government has invested heavily over the years on creating infrastructure at HAL, while the private sector would need to do this from scratch, making it harder for them to compete.
The other point raised by private companies was that technical parameters for selection should be fair to enable them to qualify for the competition. Very few companies in the private sector have expertise in aeronautical manufacturing at present. To encourage the private sector to compete, the ministry ensured that a major part of the infrastructure required to make the prototypes would be provided by ADA and no unfair advantage would be given to state-owned entities.
Sources said HAL's protest has been registered on the EOI which mentions the revenue to order book ratio as one of the qualifying points. No points would be awarded to HAL as it has an extremely loaded order book. The current order book for HAL is close to ₹2 lakh crore. The idea behind the clause, sources said, was to ensure that all aeronautical work is not cornered by a single entity and an alternate hub is created within the country. There has also been consensus that the private sector needs to be encouraged to enter the challenging field of fighter jet manufacturing, given the huge backlog of work already placed on HAL that includes fighters, helicopters and trainer aircraft.
Sources added that the revenue to order book ratio could also ensure that HAL takes a partner from the private sector to qualify for the AMCA order. This could be in the form of a joint venture or consortium, with the work load being shared, enabling the creation of a private sector entity specialising in aeronautical manufacturing.
