In a first, HAL assures 75 per cent availability of Dhruv fleet through a "performance based logistics" contract

First “performance based logistics” for indigenous military platform (Above: Dhruv, flying in Siachen)

By Ajai Shukla

Business Standard, 31st March 17

In 2013, during the Uttarakhand floods, an embattled army and air force conducted relentless rescue operations for two weeks with 22 Dhruv Advanced Light Helicopters (ALH), flying more than 1,000 sorties to save thousands of lives.

Elsewhere, the Dhruv’s robust Shakti engine, optimized for high altitude flying operations, services the Indian Army’s daunting, 20,000 feet-high pickets on the Himalayan border, including the Siachen Glacier sector.

Yet, the Indian military has one problem with this high-performance, indigenous machine that will form the bulk of its light chopper fleet in the coming decades. It is that only six-seven out of 10 Dhruvs are available to fly at any moment.

That “fleet availability” figure of 60-70 per cent is set to improve. On Thursday, the Dhruv’s manufacturer, Hindustan Aeronautics Ltd (HAL), signed a contract with the defence ministry (MoD) that binds HAL to ensure a Dhruv availability of at least 75 per cent for the next five years.

The MoD says this unprecedented "performance based logistics" (PBL) contract relates to 32 Dhruv choppers being bought for Rs 8,000 crore for the navy and the Coast Guard. It will also extend to an impending contract for 41 more Dhruvs for the army.

This is the first time an Indian manufacturer is guaranteeing the performance of a weapons platform to a buyer through a PBL contract. HAL is charging roughly half the purchase price of each helicopter for providing the services, maintenance, spare parts and inspections needed to keep 75 per cent of the contracted fleet fly-worthy at all times.

“PBL is the purchase of logistics support as an integrated, affordable, performance package designed to optimize system readiness and meet performance goals for the product through long-term support arrangements with clear lines of authority and responsibility”, said HAL chief, T Suvarna Raju.

Calling PBL a “preferred acquisition strategy for defence acquisitions”, the MoD said today: “PBL ensures the availability of products to the customer while the responsibility gets transferred to the contractor. The PBL envisages rewards or penalties based on the performance [of the fleet]”.

While this is the first indigenous PBL contract, India has similar contracts in place for foreign aircraft like the C-17 Globemaster III and the Rafale fighter.

Now this PBL contract will expand HAL’s maintenance responsibility substantially. The Dhruv currently operates off 15 aviation bases, which will go up to 40 bases by the time the new order is executed.

On a visit to HAL, Bengaluru in January, Business Standard learnt that HAL would set up a maintenance, repair and overhaul (MRO) hub in the north and another in the east, from where repair teams could react to maintenance requests from aviation bases in their vicinities.

The Dhruv is the military’s primary light helicopter. This year, HAL will complete delivery of an earlier contract for 159 Dhruvs, of which 83 are utility versions and 76 are an armed version called the Rudra.

Production capacity is being ramped up for the new contract for 73 Dhruvs (Army: 41; Navy: 16, Coast Guard: 16). In addition to production at Bengaluru, a new plant will come up at Kanpur to build Dhruvs.

In the past, HAL, under pressure to build and deliver Dhruv helicopters, had not focused adequately on maintenance and spares, say aviation analysts. The low availability this caused eroded customer confidence in an otherwise superb machine.

At one stage, the secretary in charge of defence production was monitoring the spare parts position for Dhruvs in the MoD every month. The PBL contract will henceforth put the onus squarely on the manufacturer, HAL.