(photos: courtesy Ajai Shukla)A view of the VIP-version of the Dhruv ALH, which was handed over to Ecuador at Aero India 09.
by Ajai Shukla
Yelahanka Airbase, 14th Feb 2009
Top defence decision-makers at the Aero India 2009 show in Bangalore have declared repeatedly that the economic slowdown would not impact defence spending, which would continue to rise in absolute terms. Today, India’s first 100 per cent defence-oriented investment fund — named the India Rizing Fund — announced its official launch at this biennial air expo.
The India Rizing Fund is a Rs 750 crore venture capital fund, approved by Securities and Exchange Board of India (Sebi) for investing in small and medium enterprises (SMEs) engaged in producing defence equipment. The Foreign Investment Promotion Board (FIPB) has approved raising Rs 550 crore from international investors; the fund expects to raise Rs 200 crore from the domestic market.
Rajesh Narayan, the Managing Trustee of the India Rizing Fund explains why, despite depressed economic conditions, he expects the fund to post strong gains. “There is, first of all, strong government encouragement for privatising defence production to the greatest extent possible. This means growing business for private companies, as defence PSUs and Ordnance Factories outsource production to them.”
“In addition, India’s new offset rules demand that foreign defence majors supplying arms to India will have to source defence goods from India, to the tune of 30-50 per cent of the overall contract value. Already, a string of global majors are in talks with Indian defence SMEs for fulfiling those offset obligations.”
Global majors’ offset obligations are expected to amount to about $20 billion over the coming ten years. Just one contract — the procurement of 126 medium multirole combat aircraft (MMRCA)— will generate offset obligations worth an estimated $6 billion.
The India Rizing Fund is in talks with several global majors, who have a strategic and commercial interest in strengthening the network of SMEs, so that their offset obligations can be fulfiled without difficulty. The fund plans to funnel its corpus into promising defence SMEs, providing the capital needed for building up their manufacturing infrastructure and delivery capability. It plans to actively participate in the management of the companies in which it invests, bringing in professional practices and processes.
“We are having a hard time finding enough well-structured Indian companies that can help us fulfil our offset obligations”, says an senior executive from the Boeing Corporation, on condition of anonymity. In Dec 08, Bell withdrew from a $600 million contract to supply India with 197 light helicopters, citing difficulties in meeting its offset obligations.
The India Rizing Fund plans to invest 90 per cent of its capital into defence manufacturing, and about 10 per cent into defence R&D units that are working in the fields of data fusion, thermal imaging and sensors.
Rajesh Narayan, the sponsor and promoter of the fund was earlier the Director and India Head, Specialist Finance, ANZ Investment Bank (ANZIB).
Hell, what kind of VIP interior is there? A SOFA would have been a better deal. But thats me.... Nevertheless if customer is satisfied then its all well.
ReplyDeleteTo Rahul Singh: Are yaar, why are you so surprised? Bechara HAL being a DPSU doesn't have the kind of financial clout required to engage the renowned Swiss or German interior designers who can design and supply world-class interior furnishings. Remember the issue of CofA? I was told way back in June 2005 that HAL will seek the certificate of airworhtiness from Europe's EASA, and am still awaiting it. No one at the HAL pavilion/chalet even had an idea during Aero India as to when this CofA will be forthcoming! And without this CofA there's no insurance coverage provided for this helicopter. Small wonder therefore that the TATAs and ESSARs have ordered the Sikorsky S-76C+++ while the state govts of Andhra Pradesh and Rajasthan use the AgustaWestland AW-139. Without a credible CofA being issued for the Dhruv ALH, no discerning person (me included) will trust the flight safety features of the Dhruv ALH.
ReplyDeleteAJAI / ANYONE WHO KNOWS CAN U CONFIRM ABOUT NEWS ON SURINAME BUYING DHRUV PLEASE?
ReplyDeleteALSO IS THERE NEWS ABOUT DILIP CHABBRIA DESIGNED DHRUV??
I LOOK FORWARD TO HEAR FROM YOU
REGARDS,
MIC
Prasun sengupta, please stop talking nonsense. I know about the CFA, and also noticed that people at the HAL palillion didn't know about them, except saying "we are working out the formalities".
ReplyDeletebut know that many countries are already buying Dhruvs, and also organizations. Such as Ecuador, Peru and Turkey. Organizations like ONGC and NDMA are also actively buying Dhruvs. India need not such certifications for its product to sell in the local market as you claim about TATA and ESSAR. All they need to do is formulate their own standards implementation system and issue certificates, and make a ruling that insurance companies in India should abide by this standards. So simple!!!
Regarding the interior, come on. give a break and cut out silly arguments like "no money to employ a foreign designer". How much is it going to cost? 1 bil? 1 tril? at the most for a Bentley type of interior may cost 1 mil. Any why must they call Swiss / Germans? As anon above said did you hear of Dilip Chhabria (DC Designs)?
Heres an interior of a car by him : http://images.infibeam.com/ims/dcdesign/innova/innova_02.jpg
indulge yourself in it with awe.
To Rahul Singh, you pay peanuts, you get monkeys. simple as that. Thats what Ecuador paid and thats what they are getting. Its not like India showed them the picture of a Maybach like interior and are now shafting this down their throats!! Had Ecuador wanted such a lavish interior of course HAL wouldn't have said no. But provided with an increased payment!
Prasun said: "Without a credible CofA being issued for the Dhruv ALH, no discerning person (me included) will trust the flight safety features of the Dhruv ALH."
Funniest piece of crap. Why Prasun? Are you planning to buy one anyway for you to be included? for what use? for your private army of monkeys? Even VIPs from Ecuador and Israel are OK with it. Indian army, air force and Navy are happy using it. But you seem to be fussing around like assif you are a potential buyer.
I wish Ajai or someone could provide an answer to the above question, which is what's up with the plans of the Dhruv that was to be designed by DC Designs?
Get your facts right!!! If the CofA issue was that oversimplistic as you claim it to be then by now the Ministry of Civil Aviation would've already issued a directive to the DGCA to make the Indian insurance companies comply. Also, the Indian Navy has publicly stated that it is NOT buying any Dhruv ALHs. The NMDA has NOT placed any orders either. And FYI don't even dream about comparing the military and civilian CofA requirements/regulations. Because if you do then the IQ of my private army of monkeys will far outstrip your's! Pay heed to the existing sales track records of the civilian AW-139 & S-76C+++ vis-a-vis the Dhruv ALH within India as that's the most convincing argument, and not your or my 'opinions'.
ReplyDeleteMr Cleveropposite, the problem is India lacks implmentation. This is a simple problem that can be done right away. It doesnt mean if something is not then it cannot be done.
ReplyDeleteIndian Navy has 8 Dhruvs and is not buying because Dhruvs cannot meet its requirements for ship basing, not because of any CFA requirements. Indian Army has tested Dhruvs in Siachen and Kargil excessively before purchasing it and they are fully agreeable and acceptable to Dhruv's impecable safety features such as crash landing resistance etc. Indian air force, army, even ecuador, peru now even Suriname is buying it and have no complaints. Even if not NDMA, ONGC and many state governments bought it already. its not like they came and told you "mr. prasun we didnt buy Dhruv because it got no CFA". so dont just make assumptions.
how can u compare S76 and AW139 sales to Dhruv? S76 has existed since the 1970s, so of course more units would have sold. Dhruv production for army is only now ongoing and already countries are queueing up for it and because of the hectic and long dateline countries like Chile bought helicopters with more lean completion schedule although from bottom of their heart they wanted Dhruv. AW139 is a bigger class than Dhruv. it can seat 15 people. so no comparisons
my mistake about army of monkeys. because even noble Rama had a faithful and smart army of monkeys who helped him conquer Ravan. Its actually army of donkeys.
to prasun:
ReplyDeleteone chopper was ordered by NDMA....its presently now at Bangalore undergoing annual maintainance.
^^^
ReplyDeletehahahaha... shy for u prasun
EASA and FAA are something at which foreign customers should look at. Its very stupid to see TATAs and likes rejecting DHRUV because of those fancy certificates.
ReplyDeletePrasun Sir: Can you make me understand why i should buy 'BIS' marked 'Tanisq' diamonds when TATA can't buy DGCA certified chopper.
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SARANG team puts enough confidence in me that if i can then i'll buy 100 ALHs.
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HAL knows why EASA and FAA will be denied to ALH..... Its all about business. If ALH gets EASA then EUROCOPTER will lose pounds and if ALH gets FAA then Bell and Sikorsky will lose dollars.