Time ripe for opening defence industry to private players

Ranjit B Rai

The Indian Navy knows it has a friend in George Fernandes, who is back as defence minister. He has been very vocal in his support for the Cinderella service after he surreptitiously sacked CNS Vishnu Bhagwat on December 30, 1998, almost as if to atone for his actions, and that bodes well for our men in white and the nation. After years of neglect, the results are now showing.

Mr Fernandes’ socialist leanings and anti-US stances of yore have also contributed to a revised relationship with the Russians, and matters have moved ahead on Indo-Russian defence collaborations. He had also initiated a fast-track regime at a high level in the Inter Governmental Commission. It is the nimble Indian Navy that has gained the most, and it has an ambitious yet balanced template for its future programmes largely based on Russian support for its ships, aircraft and submarines. The recent war on terror has also stressed the need for maritime ability as reliance on the seas for resources and mobility has increased.

The Navy, therefore, celebrates December 4, this year as Navy Day on a definite high, with over 14 per cent of the defence budget in its kitty and with only 6 per cent of the manpower enabling it to concentrate on capital spending for acquisitions rather than revenue, which the huge Army is saddled with.

It was this day in 1971 when the killer missile boats supplied by the Soviet Union were employed ingeniously to damage oil tanks at Kemari and sink two ships off Karachi. The Navy also throttled the eastern flank of Pakistan in what is now Bangladesh. Former Pakistan Prime Minister Benazir Bhutto, recently on a visit to Delhi, admitted it was the atrocities of the Pakistani military under General Ayub Khan that led to the break up of Pakistan, and the nation knows the contribution of the Indian Navy in that war.

It was the Soviet supplied equipment that carried the day for the Navy’s brilliant performance. Much of the credit must also go to late Admiral of the Fleet Sergei Gorshkov, the builder of the Russian Navy, who was kind to the Indian Navy and supplied ships and equipment over and above the call of the signed MoUs. He visited India three times and offered his advice and experience. His motto was ‘the Indian Navy should ask, and he would deliver’, at times from the operational inventory of his own Navy.

He appreciated the professionalism of the Indian Navy and helped build the massive Vishakapatnam Naval Dockyard hoping that the Soviet Navy could seek warm waters there. I recall, as his liaison officer three times over, he recommended Bimlipatnam as the naval base as Vishakapatnam’s narrow entrance could be blocked by just one ship and could hamper operations. The finances then did not afford the Navy that luxury and is now building a naval base called Seabird, near Karwar, for which contractors like Larsen and Tubro and J M Baxi are gainers in the first phase of the jetty and syncrolift facilities. Phase two will be bigger.

Today, India still owes $3 billion to Russia for the missile boats, eight Petyas, five Kashin Rajput class, 16 submarines minesweepers, Kamov helicopters and IL38s and TU 142s and other equipment that was supplied on easy and long payment terms.

Russia is now obliged to import Rs 3,000 crore worth of goods from India annually in settlement and is getting wiser now to demand market prices as opposed to friendship prices, as the defence secretary put it. This is a challenge. There is a rethink on going in for collaborations to offset the costs. This augurs well for Indian industry as the defence ministry plans to open up the sector and Confederation of Indian Industry has been working hard at it. The naval experience in this regard is worthy of emulation.

The recent visit of Prime Minister Atal Bihari Vajpayee to Russia saw more such co-operation on cards—this could include the acquisition of the badly needed aircraft carrier, Gorshkov, the MIG 29Ks and Ka 31 AEW helicopters with Indian components for which an MoU was signed some years ago and the lease of a Schkuka 2 nuclear submarine to enable the Navy to assist the Defence Research and Development Organisation (DRDO) in completing the ATV project on which Rs 1,200 crore has already been spent.

Industry is fully involved in the project, with Bharat Heavy Electricals Ltd. supplying boilers, tubing and heat exchangers, Mazagon Docks and Larsen and¡ Tubro supplying the modules for final welding at the shipbuilding facility at Vishakapatnam and Tata Consultancy and others supplying other services and special metals and welding equipment. Bharat Ectricals Ltd. is supplying electronics. When the project succeeds, India will be the sixth country to have mastered nuclear submarine construction.

India-Russia defence collaboration in industry is looking up. Plans include production of the Brahmos long-range cruise missiles even for export for land, ships and aircraft fitment. The first launch was successfully carried out at Balasore earlier this year. Recently, L&T assisted the Navy and the DRDO in the stabilisation platform of the Dhanush Prithvi version. The Army is slated to assemble 176 T 90 Tanks and the Indian Air Force is to get Hindustan Aeronautics Ltd. to assemble the 140 SU 30s. There can be greater Indian industry participation if secrecy clauses are eased.

The Navy’s experience needs to be highlighted on this day. It is the silent service which co-operated with DRDO, shipyards and civilian firms to ensure deliveries of its platforms. The now elongated Leander programme to build ships at Mazagon docks heralded a host of vendors and suppliers for valves and associated equipment. For electronics, the Navy decided it needed its own mini research and development (R&D) agency called WEESE, Weapon Engineering and Electronics System Engineering. It has done pioneering work on the bus bar design to amalgamate western and Russian weapon systems successfully at low costs and help the Navy select equipment and design the EMKA command and control system amongst others. A team of M. Tech graduate officers was also sent abroad for training.

The potential to go further exists. There are, therefore, imperatives now for the defence industry to be opened to private initiative as it now has infrastructure. Technology can be bought with partners being brought in. The monopoly of the expensive defence public sector with high administrative and social costs needs to be slowly weaned and left to a few strategic sectors. In the way ahead, the examples set by the Indian Navy are worth emulating. Many of these were recently highlighted in the annual National Security Seminar. This can be considered as the Navy’s back present to the nation as we hail our men in white on their birthday.

(The writer is Commodore (retd), Indian Navy)