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Avro replacement: Defence ministry has to show leadership

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Defence Minister Manohar Parrikar
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There were great expectations on the first meeting of the Defence Acquisition Council (DAC) on November 22, chaired by new defence minister Manohar Parrikar. A new dynamism was anticipated in the decisions that were to flow out. Alas, one wonders whether we need to do a puja to get over the evil spirits around the indigenisation programme.

What else can one say after the IAF's novel proposal to kick-start a private aviation industry in India through its Avro replacement programme, which has been before the government for the past two years. It has been sent back by the DAC for 'further deliberations.'

One just hopes it is not a diplomatic way of saying that it is a hot potato. It was known before the DAC meeting that the Avro replacement project had been reduced to a single-vendor situation.

Could the DAC have gone ahead on the single bid? Could the government have shown that it means business and proceeded with the single vendor instead of sending the proposal back for further deliberations?

The Defence Procurement Procedure (DPP) came into vogue in 2002, post the Kargil Review Committee recommendations. Before that, all proposals were analysed by the service headquarters. In effect, all acquisitions were government-to-government deals, which led to accusations that real price discovery was never achieved.

The aim of the DPP was thus very noble: to get equipment at lower prices. This was too good to be true as bringing private vendors brought the fear of the three Cs – CAG, CVC and CBI – into play, and decision-making ground to a halt, with only the inefficient public sector defence undertakings getting overflowing order books.

It came to such a pass in the past five years that though the DPP authorised the defence minister to decide on contentious situations and grant reasoned waivers (thus exercising leadership in ensuring combat readiness of the Services), the previous defence minister surrendered this authority to the DAC in order to avoid taking decisions.

The result? A drop in key combat equipment across board. The Avro replacement programme seems to be heading the same way.

The programme, with which this writer has been closely associated, has had a chequered history. The operational Air Staff Requirements (ASR) were meticulously drafted and had an embedded forward-looking thrust to them. If a predominantly passenger carrier Avro could be replaced with a more versatile aircraft that could go longer distances and additionally do transport roles like para-dropping and ferrying vehicles and outsized cargo with a rear-loading ramp, the operational
capability of the Air Force would go up many fold.

ASR critics have to understand that one should not be bureaucratically condemned to use a Pentium 286 computer in modern times just because the 286 can still do the job of word processing. The RFP was sent to eight leading companies, which had shown interest in the project. Of these, there were some like Lockheed Martin and Boeing, which conveyed they do not have the aircraft in the category being asked for. Alenia-Aeromacchi could not apply due to its link with Finmeccanica, which has been debarred after the VVIP helicopter episode. The cash-starved Russians reportedly wanted India to join in for a new design & development project, in effect, making us foot the bill, while Antonov expressed its inability due to problems in Ukraine.

That left only Airbus, which, as press reports said, sent its bid as a joint venture with a top Indian business house.

The ball is squarely in MoD's court. The re-floating of RFP will not bring in new players, as the original RFP had been sent to all aircraft manufacturers and no new aircraft could emerge. The DPP is very clear (paras 69 and 70 of Chapter 1) and (without going into details) authorises the MoD to accept a reasoned-out single vendor situation.

Being a 'lakir ka fakir,' as a Hindi saying goes, and playing safe by re-floating the RFP will just kill the project – a project that has long-term strategic ramifications. What is important is the long-term strategic gain that this project can usher in, as the impact of the Avro project goes far beyond the acquisition of just the 56 transport aircraft asked for. The development of an indigenous private aviation industry is at stake here.

All IAF big-ticket items for the next 2-3 decades are flowing in; Su-30 and Rafale for the fighter fleet, C-17 and C-130 for the transport fleet and Chinook, Apaches and Mi-17 V5s for the helicopter fleet. But for the Avro replacement programme, what can the private industry look forward to?

Production of select aircraft would kick-start private industry and would also boost the micro, small and medium enterprise sector. For all this to happen, the MoD will have to grab the bull by its horn.

(The author is a retired Air Vice Marshal and a Distinguished Fellow at the Centre for Air Power Studies).

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