PSUs and ordnance factories have outlived their utility Bharat Shakti 11 Feb 19
Public Sector Undertakings and Ordnance Factories have Outlived their Utility
PSUs and ordnance factories have outlived their utility Bharat Shakti 11 Feb 19
The recent air crash of a Mirage 2000 aircraft in Bangalore led to the death of two young trained pilots. Unofficial reports claim that one of the wheels (oleo) came off during take-off. This is not the first crash of an aircraft being produced by HAL. As the air chief had stated just a day earlier, ‘We have lost seventeen pilots and engineers in air accidents during the testing and evaluation of the indigenous Marut, Kiran, Ajeet, Saras and early warning prototype aircraft’. The recent deaths would add to these figures. Investigation into the accident would open doors on the poor work ethos and quality checks of HAL.
The air force chief had stated, ‘development (by HAL) has taken an incredibly long time that armament and technology has gone obsolete.’ He added that additional production of SU 30 aircraft had been delayed by over two years and LCA production commitment by over six. Quality issues have been flagged over the years to HAL but to no avail.
Even trainers for the air force have been impacted by delays. Efforts to develop a basic trainer under the HTT-40 program is already running five years behind schedule. It is unlikely to be even certified for flight by 2021. The other indigenous program to develop the Intermediate Jet Trainer is delayed by over 14 years. All efforts to prove the aircraft fit for flying has failed. Even with the HAL entering a consultancy with a US firm would result in a delay of another five years.
HAL is one of the government’s Public Sector Undertakings (PSUs) and has been in the limelight in recent times because of the Rafale controversy. Even Dassault, the manufacturers of Rafale were unimpressed by HAL’s work culture, ethos, quality checks and proposed timelines for the assembling of the Rafale aircraft in India, one of the major reasons why it refused to partner with them. HAL quoted double the time for assembling an aircraft as compared to Dassault.
All PSUs suffer the same plight in terms of work culture and poor-quality checks. They have been able to get away all these years solely because the armed forces had only them to depend on. Their pricing was high because in none of the PSUs is any work done during working hours, mostly during overtime, which has become a norm. Further, being sole manufacturers, they were rarely questioned. They have faced no competition due to consecutive government’s protectionist policies.
The entry of the private sector has irked them because of a changed profile, costing and vast improvement in quality. The staff of the PSUs recently went on a three-day strike in Delhi demanding the government strengthen them, invest funds and reduce dependence on the private sector, now venturing into the defence market. The decision of the government to stop investing in PSUs and ordnance factories as also removing items from their list to be awarded to private players has been a positive step.
There is no denial that the nation can never become a military power if its dependence on imports for military equipment continues. Another factor which must be added to this statement is that ‘dependence on unreliable PSUs and ordnance factories would only make the armed forces weaker and stuffed with poor technology and an outdated equipment profile’.
The private sector may seek profit, but to make profit they would have to deliver technologically superior equipment on time. They are aware that they would be in competition with the best in the world and hence must match quality and price. They would have to invest in technology rather than remain manpower intensive unit as most PSUs are. Presently, this industry is just taking root and hence is incapable of investing large sums in R and D. It would therefore need to bank on funds from the government.
Presently the private sector is involved in joint-ventures with foreign companies for production of equipment in India. In this instant too, deliveries are timely, quality checks exist, and costs are as determined. In a few cases the DRDO has been in touch with private vendors for joint development.
The final product when produced for trials with joint development has always been of a better standard rather than when it was solely a DRDO project. The recent case was of the artillery guns which underwent trials. All those involving the private sector performed well, while the one manufactured solely by the DRDO was a dismal failure as Chinese items within it malfunctioned.
The armed forces have already lined up a number of joint-projects with the private sector for which funding for research needs to be provided by the government. The problems which remain are availability of a reasonable defence budget and the power and control of the DRDO. The Future Infantry Combat Vehicle is a recent example. The project has been languishing due to lack of funds.
Any government which decides to close PSUs and ordnance factories is likely to face political backlash, as the recent example of Rafale and HAL proved. However, in some time frame some government, considering national interest, must take the bold step of shutting down defunct PSUs and ordnance factories or hand them over to the private sector as these remain white elephants eating into the national economy. Keeping them functioning in an age when there is a growing private sector makes no sense.
In case the government hesitates to close PSUs then the next option is to permit the private sector to compete openly with them, ignoring the protection presently provided to PSUs. This would convey a clear message, compete or perish. The next aircraft deal, presently under scrutiny at the Air HQ and the MoD, must ignore HAL and be in collaboration with the private sector. India can no longer afford defunct white elephant PSUs, producing poor quality products leading to loss of valuable lives.
About the Author
Maj Gen Harsha Kakkar
Retired Major General Indian Army