The Rs 48,000 crore order from the Centre to make 83 Light Combat Aircraft (LCA) at the Hindustan Aeronautics Limited facility in Bengaluru will give a major boost to defence and aerospace industries in Karnataka.
HAL CMD R Madhavan told The New Sunday Express that the company will focus on integration and testing of parts of the project, while the actual manufacturing work will be done by private firms, including MSMEs (Micro, Small and Medium Enterprises), many of which are located in Karnataka.
He spoke about the response to the three-day Aero India, the company’s focus on helicopter projects and the restoration of supply chain that was hit after the outbreak of the pandemic. Excerpts:
How will the LCA project give a boost to the defence manufacturing ecosystem?
We are only doing the integration. Manufacturing will be taken up by our vendors. Now, we have 463 vendors as part of the LCA programme and the work on 83 LCAs will also go to them.
Also, the number of vendors will be increased, and we expect around 550-600 vendors to be part of the project.
This will create over 5,000 direct employment opportunities and 25,000 to 50,000 indirect jobs.
A large amount of work will be available to the vendors, while the rest will be done by MSMEs. It will give a big boost to local industries.
How many vendors are from Karnataka? What is the project break-up?
Around 230 vendors are from the state, and most of them have been with us on other projects.
The new project will increase their workload. After the tax component is taken out, Rs 36,000 crore remains, and of this, Rs 11,000 crore is for ground equipment and Rs 25,000 crore for the aircraft.
The ground equipment too is made in Karnataka, while few other equipment will be manufactured in Mumbai and Pune regions.
We expect a total outgo of around Rs 6,000 crore for the aircraft and Rs 3,000 crore for ground equipment for local industries. It also includes material cost.
Will HAL hire more people for the project?
No. With our existing manpower and infrastructure we will be able to manage this as we are only doing the final integration, assembly testing and customer service.
The system is already in place and we will not be directly employing too many people, but a few will come in for this project.
Delivery on time is very important…
It is a very crucial timeline, as we will be delivering the first aircraft within three years. We have to design and produce the aircraft and it is a concurrent project.
We have already set up the second line for increasing the production capacity from 8 to 16 aircraft per year and we also have the backup line that was inaugurated by the Defence Minister Rajnath Singh (on February 2).
The new plant has already been set up and we will use the facility from 2024.
As the project will go on for 9 years, is there a provision for on-the-go upgrade of aircraft?
Generally, upgradation happens in mid-life, between 10 and 15 years from now. While that is a major upgradation, we keep upgrading the aircraft as and when a new version of electronics and other equipment come in. On-the-go upgradation is being done even now.
A lot of focus is on helicopters…
Yes, helicopters will make a big difference. Now, LUH (Light Utility Helicopter) also got its IOC (Initial Operational Clearance) from the Army and IAF.
We expect LCH (Light Combat Helicopter) and LUH to be the mainstay for us and the potential is for around 350 helicopters.
Will they be made at the Tumakuru facility?
LUH will be made at Tumakuru, while LCH in Bengaluru.
HAL played a key role in organising the air show. Were there any concerns? How was the response?
Just about four to five months ago, we were keeping our fingers crossed as Covid numbers were increasing. We went ahead with the preparations with all Covid protocols in place.
We had some reservations about foreign participation, but it was better than what we expected. It was the first air show after the Covid outbreak.
Paris and Farnborough air shows were cancelled, and the Singapore air show was held virtually.
Supply chain was hit because of the pandemic. How is the situation now?
It’s much better now. But in some places, especially with materials coming from other countries, it is still a problem.
However, we have recovered. Deliveries will happen on time and our revenues and profits too will increase as compared to last year.