Flying the same mistaken route

By Ajai Shukla

Business Standard, 10th Apr 18

Nobody is certain about the origin of the aphorism: “Insanity is defined as doing the same thing over and over again, but expecting different results”. Albert Einstein has been credited with it, as have Mark Twain, Benjamin Franklin, Anonymous and An Old Chinese Proverb. Our ministry of defence has not, which is just as well given its penchant for repeating follies.

Consider how the defence ministry has gone about buying fighter aircraft for the Indian Air Force (IAF) over the last two decades. In essence, here is what keeps happening. The IAF needs hundreds of single-engine fighters to replace its MiG-21s and MiG-27s that should have retired already. But when the IAF initiates a quick and cheap procurement of single-engine fighters, the ministry scuttles that proposal and initiates a complex acquisition process for costly, twin-engine fighters that are so expensive that they are never bought. This happened in 2001, when the air marshals smartly saw an opportunity to buy up French vendor Dassault’s production line for Mirage 2000-5 fighters, which was making way for a new line to build the Rafale. The IAF still loves the Mirage 2000; the single-engine fighter is reliable and effective; and the French no longer needed the line, setting the stage for a bargain sale that pleased all sides. But George Fernandes, the National Democratic Alliance (NDA) defence minister at that time, recently scalded by the Tehelka television sting on corruption in defence procurement, shrank from a single-vendor purchase. Instead, he ordered an expansive global tender, setting the stage for a fiasco – the eventually aborted process of buying 126 medium multi-role combat aircraft (MMRCA), in which Dassault’s Rafale was named winner. But, so controversial was Dassault’s quote that United Progressive Alliance defence minister, AK Antony, refused to endorse it, a lead that was followed by two NDA defence ministers after 2014 – Arun Jaitley and Manohar Parrikar. Eventually, the MMRCA tender fizzled out into the purchase of 36 Rafales in June 2016 for almost $10 billion -- the price envisaged for 126 MMRCAs.

It seemed as if we had learned a lesson from this debacle when, in October 2016, the IAF issued a request for information (RFI) inviting global vendors to partner Indian companies in building a single-engine fighter in India. Like the Mirage 2000 earlier, the two single-engine fighters now in contention – the American F-16 Block 70 and the Swedish Gripen E – present cost-effective, operationally potent options. But this was too good to be true! Last Friday, Defence Minister Nirmala Sitharaman, like George Fernandes in 2001, scuppered the single-engine fighter RFI and issued a fresh RFI that allows in expensive, twin-engine fighters. We are now poised to witness a repeat of the MMRCA process. Even the contending aircraft are almost identical; why would the result be significantly different?

The table alongside this article helps in understanding the IAF’s needs. In 1988-89, the high-water-mark when the air force actually operated its authorised 42 squadrons, that combat fleet included 27 single-engine MiG fighters – 17 MiG-21, four MiG-23 and six MiG-27 squadrons. By 2022, all but one of these would have retired. In their place the IAF would have inducted 13 squadrons of Sukhoi-30MKI fighters and two squadrons each of the Rafale and the Tejas Mark 1. The deficit of 10 squadrons, adding up to 210 aircraft, should be logically filled by similarly affordable, single-engine fighters -- a category that would now have been reduced to just two Tejas squadrons. Without those, the IAF’s fighter fleet would taper off to 24 squadrons in 2032 when the Jaguar and MiG-29 fleet would have retired.

Air force fighter squadrons: 2005-2032

Aircraft type	Number of operational fighter squadrons
	2005	2012	2018	2022	2027	2032
Jaguar IS/IM	6.5	6	6	6	4	Nil
MiG-29B/UPG	3	3	3	3	3	Nil
Mirage 2000H/I	3	3	3	3	3	2
Sukhoi-30MKI	6	9	12	13	13	13
MiG-27/UPG	6	5	2	Nil	Nil	Nil
MiG-21/M	5	4	1	Nil	Nil	Nil
MiG-21BIS	4	1	1	Nil	Nil	Nil
MiG-21BISON	6	6	4	1	Nil	Nil
Tejas Mark 1/Mark 1A	Nil	Nil	0.5	2	4	6
Rafale	Nil	Nil	Nil	2	2	2
AMCA	Nil	Nil	Nil	Nil	Nil	1 (?)
Total of all types	39.5	37	32	30	29	24

However, allowing expensive, twin-engine fighters into the contest might contain the seeds of its eventual failure. The Rafale contract provides an indication of what we could pay for 210 twin-engine fighters. The contract price of $9.63 billion for 36 Rafales included $859 million for weaponry, $2.2 billion for spares and engines, and $368 million for logistics guarantees; expenses separate from the cost of the aircraft. For the Rafale fighters themselves, including the cost of “India-specific enhancements”, India paid $6.13 billion. That translates into a cost of $170.4 million for each Rafale.

Building the fighter in India, which would add on expenses like technology transfer, shifting production and higher Indian production costs, would add a conservative 25 per cent to the price, hiking up the cost of each “Made in India” fighter to $213 million. Even without factoring in inflation and forex variation, 210 Rafale-class fighters would present India with a bill of $44.8 billion.

Spreading that cost over seven years of production, the IAF would have to budget $6.38 billion annually for this procurement alone. This when the IAF’s entire procurement budget for 2018-19 is $5.5 billion, with over 75 per cent of that pre-committed towards instalments on earlier procurements.

True, the Rafale is at the upper end of the cost spectrum and the American twin-engine fighter likely on offer, the F/A-18 Super Hornet, might well be cheaper. But how much cheaper? In any case, in the MMRCA evaluation, the IAF chose the Rafale knowing it would be a financial millstone round their necks. There is every likelihood they would do the same again.

Some days ago, I listened to a gathering of IAF marshals, including several former air chiefs; discuss why the political leadership remained unconcerned while the IAF’s squadron strength plummeted dangerously. They berated the usual suspects: A government that complacently and irresponsibly ruled out war, even while raising tensions on the border; bureaucrats that perversely blocked procurement; Hindustan Aeronautics Ltd (HAL) and Defence R&D Organisation, which seemed unable to get the Tejas on track; and a media that stood idly watching. Many of their arguments had merit but, ultimately, it was an exercise in name-calling. Nobody reflected on how to align two competing priorities: The IAF’s desire for cutting edge (and, therefore, very expensive) aircraft on the one hand, and the government’s preoccupation on the other with employment generation and development.

If the IAF is to get its fighters, it must move away from foreign procurement and, instead, ride the government’s wish for job creation and skills development and indigenisation. Like the navy, it must tread the long, arduous route to indigenisation. Starting from the top, its officer cadre must internalise this goal. The air marshals must divert effort and personnel to an aerospace design bureau and a directorate of indigenisation. The IAF must take direct and active ownership and leadership of projects like the indigenous Tejas and AMCA. It must make available capable and hard-driving air marshals to lead HAL. And, vitally, the defence ministry must assure the IAF that money and effort diverted from international aircraft buys will be directly canalised into an IAF-led effort to build an indigenous aerospace eco-system.