StratPost recently teamed up with the defense and aviation magazine Vayu to hold discussions around a round table on the future of Indian air power. These discussions held on July 04, 2014, were meant to shed light on how the fleet structure of the Indian Air Force (IAF) fighter aircraft is expected to evolve over the coming years and decades, given current circumstances.
We invited some of the top officials associated with planning and operations in the Indian Air Force and Indian Navy, some of whom have retired only recently, and who have been closely associated with the MMRCA and LCA procurement programs.
Participants included:
1. Admiral (retd.) Arun Prakash
2. Air Chief Marshal (retd.) SP Tyagi
3. Air Marshal (retd.) Harish Masand
4. Air Marshal (retd.) Nirdosh Tyagi
5. Vice Admiral (retd.) Shekhar Sinha
6. Air Marshal (retd) M Matheswaran
7. Air Marshal (retd.) Jimmy Bhatia
8. Air Marshal (retd.) P Barbora
9. Air Marshal (retd.) SR Deshpande
10. Maj Gen (retd.) Ashok Mehta
11. Brig (retd) Gurmeet Kanwal
12. Air Commodore (retd) Suren Tyagi
13. Col (retd.) Ajai Shukla
14. Capt (retd.) PVS Satish IN
15. Mr George Verghese
16. Mr Vinod Mishra
17. Mr Vishal Thapar
18. Mr NC Bipindra
19. Mr Nitin Gokhale
20. Mr Pushpindar Singh
The discussion moved on to the MMRCA program, the IAF’s tender for acquisition of 126 Medium Multi Role Combat aircraft, for which it has selected the French Rafale. The question posed by the moderator Inderjit Badhwar was: How does MMRCA fit future air power needs, costs, squadron strength?
Speakers included Air Chief Marshal (retd.) SP Tyagi, Air Marshal (retd.) Nirdosh Tyagi, Air Marshal (retd) M Matheswaran, Air Marshal (retd.) SR Deshpande, Brig (retd) Gurmeet Kanwal, Air Commodore (retd) Suren Tyagi, Col (retd.) Ajai Shukla, Vinod Mishra, former Secretary, Defense Finance and Saurabh Joshi, Editor, StratPost.
Remarks
“I think philosophically, if you look at Indian history, civilizationally – we are great debaters. We call it tark. Accha yeh sahi hai ki nahin hai. Ghalat hai ya nahin hai. And we have been debating. My short comment on MMRCA – we have debated enough. Let’s just do it.” – Air Chief Marshal (retd.) SP Tyagi
“And this cost – please understand, don’t look at cost separately. Please look at cost effectiveness. If you don’t have the money, obviously you cannot buy. So if you need ten squadrons in ten years – if you don’t have the money maybe it’ll take fifteen years to get the same strength.” – Air Chief Marshal (retd.) SP Tyagi
“Now the question is (irrespective of) if the monies is available or not, time is running out and a decision has to be taken in the next few months, if not less than that. For the simple reason: the cost will keep escalating and more importantly, any other opportunities that we had in terms of affordability will be lost out.” – Air Marshal (retd.) SR Deshpande
“Now therefore, whether bold, tough, perhaps shocking decisions have to be taken at this point of time, Indian Air Force and Ministry of Defense and CCS have to decide – no matter what the world tells us, or does or remarks, this is our decision.” – Air Marshal (retd.) SR Deshpande
“The time has come for an affordable solution.” – Air Marshal (retd.) SR Deshpande
Actually, unless we can produce something ourselves and make it cost-effective, we cannot really look up to the outside world and say that we can get the best that we want and we deserve and we need.” – Air Commodore (retd) Suren Tyagi
There is one organization which is supposed to support us. The main organization – HAL. It’s been there for sixty years plus. There is no accountability. There is nothing which has been produced by them, which has actually – except killing the people who fly them – and has never performed.” – Air Commodore (retd) Suren Tyagi
“If we can fix their accountability – in fact half our problems will be solved.” – Air Commodore (retd) Suren Tyagi
“Whatever is in the contract we’re getting for MMRCA also – when in the end the contract production will come out it will cost us more than what we’ll actually pay for procurement directly. Any aircraft that they touch it becomes more. For what, I really don’t know.” – Air Commodore (retd) Suren Tyagi
For everyone else in the world – they’re setting up plants in our country because we have cheap labor – everything works out cost effective for them. But anything that we produce for ourselves becomes one and half times the cost.” – Air Commodore (retd) Suren Tyagi
“MMRCA – whether it was needed? Yes it was needed.That’s why we went in for the procurement. It was needed at that point of time and it will be needed till it is inducted.”
“Should we go for lighter – affordability? We have a requirement of about 800-odd aircraft or maybe less if we go by what Air Marshal Barbora was saying. But if look at the total availability of Sukhoi-30, FGFA and the retiring forces, then we will still have a great deal of requirement for medium and light aircraft because Su-30 and MMRCA adds up to only about 400. And you require a light aircraft and with – so rather than look at whether you require MMRCA, we need to look at what more do you require. MMRCA is an absolute necessity.” – Air Marshal (retd.) Nirdosh Tyagi
“The second point is about affordability. Which other aircraft is affordable in the same class? Is there something cheaper available which anyone wants to suggest or recommend? For this capability this is the cost. It has emerged through a competitive process and we must honor that process.” – Air Marshal (retd.) Nirdosh Tyagi
“It was apparent from the very beginning that some of them have a single engine, that some of them have twin-engines. There would be inherent disadvantages in like-to-like evaluation. But we thought we would go through the technical evaluation process and then confront it as we come to that stage. As it turns out, air force shortlisted after that technical evaluation, two of the most expensive aircraft – the others got eliminated on technical grounds because if they had past muster at that point in time then costs would have taken over – then it would have been an L1 situation.” – Vinod Mishra, former Secretary, Defense Finance
“In various other ways, in terms of life cycle cost evaluation, in terms of a performance-based logistics alternative to ensuring high-readiness levels of the aircraft, a defense industrial base to be targeted through import of 18 and 108 to be manufactured in the country, an offset obligation of 50 percent – so all this makes it a unique kind of acquisition.” – Vinod Mishra, former Secretary, Defense Finance
“If we are true to what we had thought out initially, that these 108 – the dominant number out of that would get manufactured from the raw material stage – a thing which has not happened unfortunately in the case of Su-30 aircraft, even though we have contracted for 272 of them – so we hoped, as in the past with many other license production arrangements – here at least we would be able to explore fully, the avenues for domestic manufacture – not just the HAL. HAL you can’t wish away because in terms of military aviation that’s the only entity. A lot of private sector players want to get in, but then there are other policy correctives required.” – Vinod Mishra, former Secretary, Defense Finance
“The fact that you chose the older technology far cheaper aircraft and they were in the reckoning till the last stages of the technical evaluation process ensured that the commercial bids which came from these were somewhat competitive. I mean they wouldn’t have know that everyone else will get eliminated including the two American entities. So no one could have figured that out at the point of time it started. So that served the purpose of air force and MoD to keep the competition as wide as feasible at that juncture.” – Vinod Mishra, former Secretary, Defense Finance
“There are some challenges which are being faced in life cycle cost evaluation of the two aircraft which are left in the fray – Eurofighter and Rafale. So, hopefully a finality would be reached on that before long and we’ll be in a position to contract for it.” – Vinod Mishra, former Secretary, Defense Finance
“This is the first time the nation as a whole – the armed forces certainly, went in for life cycle cost. What will be the cost? You see this business of – ‘It costs such a lost’ is itself an incorrect notion. Because the cost is – you can buy a very cheap Russian aeroplane. Maintenance costs are phenomenal. So you are – It was very complex and Vinod Mishra played the hell with us for two years. How will we work out life cycle cost? What is a fair way of working out and the correct way of working out. Believe you me, the number of people consulted for two years – I mean PhDs and Harvard-educated guys and all sort of people were consulted – Metro boss, Sreedharan was asked – anybody and everybody was asked because we were entering a new zone. But I have to tell you one thing. Please understand that it was necessary and every time we’ve had this cheap aeroplane – we have lots of cheap aeroplanes which occupy a lot of ground but never get airborne. You know maintenance costs are so high that when the German air force chief came here we were flying the MiG-29s. And he said we have sold our MiG-29s to Poland for One Euro each – some token money. You are very rich. We cannot afford this aircraft. The maintenance costs are so high. So frankly I think we were attempting a life cycle cost (evaluation exercise) – which will be a more expensive aeroplane to own over the life cycle. Which will be available. I mean, we have Il-76s and availability is a major issue. If we were running an airline we would have been bankrupt long ago. It’s a complex issue. But please don’t just look at the price tag per aeroplane.” – Air Chief Marshal (retd.) SP Tyagi
“It’s a major challenge to put all the elements of the life cycle cost in a transparent way in the RFP (Request For Proposal) document. There are certain inherent disadvantages in the LCC (life cycle cost) route because you’re going by his word, which gets proven only when the aircraft has actually been fielded in operation. They don’t share data from other users of that aircraft.” – Vinod Mishra, former Secretary, Defense Finance
“I think the MMRCA should be scrapped. I think that it will be a death blow to Indian defense finance. We’re all talking about life cycle costing and doing life cycle costing and therefore we should buy – doing life cycle costing is not a qualification for buying a weapons system. I think that it was initially bargained for or AoN (Acceptance of Necessity) was initially got at 42,000 crores. Today it is more than double of that. And on those grounds alone the contract should be scrapped at this stage. I think the whole basis of the air force’s argument for going ahead with it is – we have a certain national security requirement and the money should be made available for it. But the fact is that the money will not be made available for it unless the government decides, of course. We have to function within our budget. And if you were to ask the air force that your budget will remain this only. This much. Do you still want the MMRCA or would you like to re-evaluate and anything that you re-evaluate will be immediately sanctioned, I think you might get a different answer.
All the arguments you’re making for really expensive aircraft – you know the MiG-29s, the IL-76 – the IAF chose those aircraft. Now you can’t point to them as a reason for buying a different aircraft ki woh kitne kharaab thhe.
What I would really like to know is what is the life cycle cost of the MMRCA. We have never had this figure in real life. Every weapons system that is bout by the UK, by the USA – the F-35, for example – all those multi-trillion figures that you hear – those are for the life cycle cost of for the entire duration for the F-35 fleet. We still don’t know what the life cycle cost of the (MMRCA), it’s a secret figure. We’re just assuming that it is bearable, we’re assuming that we should go ahead with it. My simple opinion is either we simply re-evaluate our finances or we scrap this.” – Col Ajai Shukla
“Earlier this year- again, on life cycle cost – Earlier this year at the last DefExpo, the then defense minister made a bit of a curious statement. In his remarks during the press conference, he mentioned some issues with life cycle cost as far as the MMRCA program was concerned – acquisition program was concerned. And it seemed to me a bit of a curious thing to say at that time, considering that the L1 declaration had happened a year back (later corrected to two years back), and life cycle cost was supposed to be the basis – you know it was supposed to be part of the decision on L1. I thought that was a bit of a strange thing to come out.
The second thing is, there’s been talk about cost of operation and availability. A couple of months back, French government figures came out on the availability of the Rafale – and why I want to pointedly bring in the Rafale, now, because we keep saying ‘Do we need the MMRCA’. I tend to think that we do because of the lack of other options. But the question is also, was the Rafale the wisest decision in terms of selection of the MMRCA? So French government figures come out a couple of months back in terms of availability. It says 44 point something percent of availability. Now I don’t know – perhaps some of the gents here could enlighten me. Is that good or bad, is that good?
So if the French Air Force Rafales have 44 percent availability – I don’t know, in terms of comparison would that compare with the Sukhoi fleet?
So are we then setting ourselves up to have – a decade later or a decade and a half later – a fleet structure in which you have this medium aircraft and then you have the heavy Sukhois and the FGFAs – all of whom are, obviously, expensive to buy but also expensive to operate. Also expensive to maintain. Are we setting ourselves in the future to have a fleet where you’re going to – the Malaysian air chief, for instance, once was asked why they don’t deploy their Sukhois so much, their Sukhois-30s and he said, ‘Well it’s like your private Rolls Royce. You don’t take it out that much’.
So its a numbers game and we’re all sounding like accountants, here, but this is something that had to be addressed, because as Air Marshal Bhatia said sometime back, that if you’re looking at deterrence – two-front deterrence and if someday you might feel that you want fifty squadrons, where are the numbers going to come from? Is your complete air force going to consist of expensive; expensive to operate, heavy aircraft? How is it going to work?” – Saurabh Joshi, Editor, StratPost
“MMRCA was looked at from meeting the operational requirements of the service. There is no ambiguity about that issue. And all the contenders, willy-nilly, would have met most of the operational requirements – then how the process has gone on is quite open. With respect to life cycle cost, different people may have different observations. But the basic idea that the life cycle cost has to be factored into the evaluation – there is no ambiguity as far as that is concerned. Whether- how you calculate life cycle cost – each one may have a different observation. So let’s not mix the two.
It was introduced for the first time in the MMRCA. The life cycle cost concept was introduced for the first time and there was a very logical reason. The L1 system, not only in the acquisition process in the military – the L1 system has ruined the entire self-reliance, development in the country. You go to the industries – all are public sector units – the DPSUs. The L1 system has ruined them completely. I dare say that. We need to get out of that L1 system.
Leaving aside that part the MMRCA has two components and everybody forgets the second part. It is the larger and most important part, in my opinion. Having worked on that aspect, let me bring that out. One is the basic operational requirement of the user, which is the military. But the larger interest is the national perspective. You’re going to be spend such a huge sum of money and you should look at how do I evolve my industrial capability in the country post this acquisition. And therefore, the technology transfer, the technology acquisition – not just the production technology but technology in terms of access to design knowledge ability to build the right eco-system and joint ventures and develop the overall system. That should have been calibrated and strategized during the entire acquisition process.
That applies to the FGFA program, as well. That is being forgotten, in my opinion, completely. And we will end up being, what we’ve been for seventy years. Once again, global-trotters, buying from the global market. And nothing – no self-reliance will ever be achieved.” – Air Marshal (retd) M Matheswaran
“I think a lesson has clearly emerged which the organizers may like to take note of. That we lack the technical tools for evaluations like the life cycle cost. And the serving officers, who serve in a tenure for one and half to maximum two and a half years can’t acquire the expertise on the job. The Americans have a Defense Acquisitions University. We need at least a Defense Acquisitions Institute.” – Brig (retd) Gurmeet Kanwal
The duration of this session is 25 minutes, 26 seconds.
Producer: Shruti Pushkarna, StratPost
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