India had signed two earlier End User Agreements

(Photos: Nehru and Vijaya Laxmi Pandit with President Eisenhower in the United States. Two End User Monitoring (EUM) Agreements were signed in the 1950s between India and the US)

 

by Ajai Shukla
Business Standard, 29th July 09

The furore over the recently announced End User Monitoring (EUM) Agreement between and the United States provides the reason why EUM agreements have always been kept out of public view. The text of this one remains secret. Business Standard has learned that it was the US State Department that insisted on secrecy.

This agreement is the third “standard” US-India EUM Agreement, which will apply to all defence equipment sourced from the US. The first was concluded in 1951, followed by a second in 1958. Both of those were formalised through an exchange of secret diplomatic notes. This time, too, there is no signed agreement, only an exchange of diplomatic notes in which India accepts and confirms the agreement.

The first EUM Agreement was finalised in 1951, when the US considered India a useful ally against communism, particularly that emanating from China. India needed weaponry; the US agreed to supply it under the Mutual Defense Assistance Agreement of 1949.

On 7th March 1951, the US State Department wrote to Vijaya Laxmi Pandit, then India’s ambassador to Washington, seeking confirmation that US permission would be obtained before transferring US equipment to a third party, and also “retaining the privilege of diverting items of equipment or of not completing services undertaken if such action is dictated by considerations of United States national interest.”

The State Department letter noted that “A reply to the effect that these understandings are correct will be considered as constituting an agreement between the Government of the United States of America and the Government of India, which shall come into force on the date of the note in reply from the Government of India.”

Nine days later, on 16th March 1951, Vijaya Laxmi Pandit confirmed that India was “in agreement with the terms, conditions and assurances proposed.”

The second EUM Agreement followed a similar process, after a new channel for American military aid, the Mutual Defense Agreement of 1954, superseded the earlier Mutual Defense Assistance Agreement, 1949. On 16th April 1958, America’s officiating ambassador in New Delhi, Winthrop Brown, wrote to Jawaharlal Nehru (who was Foreign Minister as well as PM) proposing that the agreements signed by Vijaya Laxmi Pandit be extended to this pact. On 17th December 1958, Foreign Secretary, S Dutt, wrote to the US ambassador conveying India’s acceptance.

Like both those EUMs, the current agreement too exists only in the form of an exchange of notes between India and the US. But the Indian negotiators of the latest agreement have apparently managed to strike off the earlier draconian provisions.

Senior government officials who were party to the negotiations recount that the biggest hurdle was India’s insistence on “verification” of US equipment, rather than “physical verification”. This would allow India to present photos or videos of the equipment, instead of the equipment itself. Washington, however, refused to accept anything less than “physical verification”, which US law mandated. The deal was struck when the US conceded that physical verification need not take place in forward operational locations, and that the date and time would be mutually settled.

During the negotiations, the US argued forcefully that it would never be asking India for inspections anyway. Indian MoD officials pointed to the intrusive inspections the US regularly carries out in Peshawar of night vision equipment supplied to the Pakistan Army. But the US negotiators responded, “This is not what we do with democracies. We trust democracies”.

The final stumbling block was over the phrase “legitimate self-defence”, which is the only circumstance in which India can use US-supplied weaponry. Indian negotiators were concerned that, if India used US-supplied C-130J aircraft to drop paratroopers into another country, in a Maldives-type operation, would it qualify as “legitimate self-defence”? The US side pointed out that it was using aircraft in Afghanistan and Iraq in what it considers legitimate self-defence.

Indian officials are triumphant at having removed a clause in the draft that would have applied future US legislation to sales made to India. The 1958 agreement, for example, applied to, “the Mutual Security Act of 1954, that Act as amended from time to time, and such other applicable United States laws as may come into effect.” This time around, retrospective applicability will not apply.

Project 17-A: All seven new stealth frigates to be built in India

(Photos: courtesy Ajai Shukla)

The INS Sahyadri, a Project 17 stealth frigate for the Indian Navy, nearing completion at Mazagon Dock Ltd, Mumbai)

By Ajai Shukla

Garden Reach Shipbuilders & Engineers (GRSE), Kolkata

Business Standard, 27th July 09

India’s largest warship builders --- Mazagon Dock Ltd (MDL), Mumbai; and Garden Reach Shipbuilders & Engineers (GRSE), Kolkata --- have prevailed over the Indian Navy’s objections. Business Standard has learned that MDL and GRSE will divide between them the entire order for seven improved stealth frigates, code-named Project 17A.

The navy was insisting that the first two frigates of Project 17A be built abroad so that MDL and GRSE could learn how to build ships using new modular methods that are preferred by European shipyards. This would have raised the price of Project 17A by more than Rs 5000 crores.

MDL and GRSE countered that they possessed the technology and the experience for building cutting-edge warships entirely in India.

Each Shivalik class frigate of Project 17 was priced at Rs 2600 crores, and the navy plans to insist on the same price for Project 17A. Building abroad would cost at least twice as much as building at MDL and GRSE.

But the navy was focusing on early delivery, rather than cost. Chief of Naval Staff, Admiral Sureesh Mehta, insisted on presenting before the Defence Acquisition Council (DAC), the highest decision-making body in the Ministry of Defence (MoD), the advantages of kicking off Project 17A in a foreign shipyard. But Defence Minister AK Antony stepped in to order entirely indigenous production.

At GRSE, a modernisation programme is underway to create the facilities needed for building Project 17A. The Chairman and Managing Director (CMD), Rear Admiral KC Sekhar, says a fully equipped modular yard with a 250-ton Goliath crane will be ready in mid-2011. By then, MoD sanctions will be in place and the navy would have completed the design of Project 17B.

Explaining the time-line, Admiral Sekhar said, “The MoD has informally told us that MDL and GRSE will build Project 17A; we are awaiting [formal sanction]. Once the navy finalises the size and design of the new frigate, we will decide our build strategy and costing. Then, hopefully, by the end of 2009, the MoD will issue a Request for Proposals (RfP); GRSE and MDL will submit separate quotes; and then the MoD will place a formal order on the shipyards. Construction should start by end-2011.”

This is the first time that India’s two major defence shipyards are sharing one project between them. And while MDL and GRSE are bidding separately, they are working in close consultation.

Admiral Sekhar points out that both shipyards have a common aim: to construct this largest-ever order of seven frigates without any delays. He explains, “We will have a common design for all seven ships of Project 17A. MDL can be the lead shipyard since they have more experience in building bigger ships. They can start work on the first frigate; after six months, we will start work on the second one.”

While MDL takes the lead in construction, GRSE will lead the design effort. A month ago, three companies --- GRSE; French shipbuilder, DCNS; and Kolkata-based IT engineering company, Vision Comptech --- formed a joint venture (JV) to design marine products, including warships, for customers globally. This JV is expected to work with the navy’s Directorate General of Naval Design (DGND) on the design for Project 17A.

If all goes well, say the shipyards, the first Project 17A frigates should be delivered to the Indian Navy by 2016-17.

Securing the Seas: India’s rise as a naval power

(Photos: courtesy Ajai Shukla)

A rare photo of an Indian Navy submarine with the aircraft carrier, INS Viraat in the background

by Ajai Shukla

Business Standard Weekend Supplement

25th July 09

One hallmark of some of the world’s path-breaking projects has been the choice of impressively lofty names. The first atomic bomb was built under Project Manhattan. Project Apollo put the first man on the moon. But for some reason, perhaps simply native modesty, one of India’s most challenging technological developments --- its first nuclear-powered submarine --- has been cloaked in blandness.

When on Sunday morning, Prime Minister Manmohan Singh’s wife, Gursharan Kaur, breaks a coconut on the hull of what is referred to as the ATV or the Advanced Technology Vessel, to christen it INS Arihant, it will launch a new era for the navy.

With the christening, water will be let into the Vishakhapatnam dock called The Shipbuilding Centre, from where INS Arihant will begin its underwater journey. Once submerged, it will undergo two years of extensive trials, first in harbour and then at sea, before formally joining the Indian Navy.

Nuclear-powered submarines are of two types. Ballistic missile submarines, termed SSBNs in the US Navy (colloquial term: “boomers” or “bombers”) carry nuclear-tipped ballistic missiles. These form the third leg of a country’s nuclear triad: airborne, surface, and underwater-based launch platforms. INS Arihant is a ballistic missile submarine, armed with twelve K-15 missiles, each capable of carrying a 500-kg nuclear warhead to a target 750-kilometers away. It will be deployed almost continuously off the coast of a potential enemy, a virtually undetectable and indestructible missile launcher.

The Arihant will not be alone. Two more SSBNs are under construction at L&T’s Hazira plant. These will probably be followed by several more, equipped with longer-range nuclear-tipped missiles.

The second type of nuclear-powered submarine is the SSN, or attack submarine, armed with torpedoes and cruise missiles. These operate as a part of the navy, performing the task of “sea denial”, or preventing enemy ships --- both naval and commercial --- from using large expanses of the ocean. An SSN’s nuclear plant eliminates the need to surface, allowing it to remain underwater for months. India will shortly be leasing an advanced “Akula II class” attack submarine --- named INS Chakra --- from Russia, followed by another after a yearlong interval.

In addition to a new fleet of nuclear submarines, a growing stable of major surface warships are catapulting the Indian Navy into the league of serious maritime powers. Cochin Shipyard is building the 40,000-ton Indigenous Aircraft Carrier (IAC), which is likely to be commissioned into the Indian Navy in 2014, followed by a successor vessel in 2017. The controversial INS Vikramaditya, as the Gorshkov will be named, could also be commissioned by 2012.

For the Indian Navy these are times of change. After decades as a near-invisible subaltern service, the growth in the Indian Navy’s force structure, visibility and budget are being warily observed by every other power in the Indian Ocean Region (IOR) and the Asia-Pacific. The Chief of Naval Staff (CNS), Admiral Sureesh Mehta, has publicly articulated the navy’s plan to boost warship numbers to 165-170, up from 140 vessels today. And because building in India cost less than half of building abroad, India’s three defence shipyards --- Mazagon Dock Limited, Mumbai (MDL); Garden Reach Shipbuilders and Engineers, Kolkata (GRSE) and the smaller Goa Shipyard Limited (GSL) --- have more warship orders than current capacities can handle.

The latest order placed on MDL and GRSE, reported in today’s Business Standard: seven new-generation stealth frigates under Project 17A, 5600-ton warships, each capable of dominating vast stretches of ocean. India’s growing skill in integrating disparate sensors and weapons on indigenous warships gives them heavier punches than most other warships of the same weight class.

Senior naval planners explain the logic behind India’s rapid naval expansion. Other than the great naval powers --- US, Russia and, now arguably, China --- most major navies operate in alliance with one of the big players. Since the Cold War, for example, Britain’s Royal Navy has functioned in alliance with the US Navy, specialising in anti-submarine warfare, and relying on US cover for crucial aspects like anti-air defence.

In contrast, India has always rejected military alliances. As a serving naval admiral elaborates, “India is different. We can operate for a short while as a partnership navy, but definitely not as part of a military alliance. We, therefore, need a balanced navy with all-round capability, which can operate alone for as long as it takes.”

But even while rejecting formal alliances, Indian Navy admirals realise that a navy that is visible is a navy that is taken seriously. That has spawned a series of annual exercises with foreign navies, including the Malabar series with the US Navy; the Varuna series with the French navy; the Konkan series with Britain’s Royal Navy; and the Indra series with the Russian navy. Early this year, India even sent three warships to China for the 60th anniversary celebrations of the People’s Liberation Army Navy (PLAN).

“It’s important to strut your stuff”, says a naval planner, “you visit a foreign port and invite your counterparts to a cocktail party on board. While sipping their drinks on the warship’s deck, they are taking note of the weaponry you’re carrying. You’re sending a clear message.”

The desire for a more powerful and visible navy is also rooted in growing concern over India’s 7516 kilometers of coastline, the vulnerability of which stood starkly exposed during the 26/11 terrorist strikes. Protection is also needed for an Exclusive Economic Zone (EEZ) of 2 million square kilometres, which could go up to 2.5 million square kilometres once India’s continental shelf is delineated and placed before the International Seabed Authority. Naval officers point out that India’s entire land mass is just 3.28 million square kilometres.

A related argument marshalled by strong-navy enthusiasts is the protection of trade: 90% of India’s trade by volume and 77% by value is transported by sea. Especially vulnerable is India’s oil dependency; according to Hydrocarbon Vision 2025, India’s current oil import level of 74% of consumption will rise to 88% of consumption by mid-century. The navy is also expected to protect busy international trade routes that pass close by Indian shores (100,000 freight vessels annually; one billion tons of oil).

Naval planners point to the historic link between trade and military power. An officer explained, “In the colonial period it was said that ‘trade follows the flag’. Today, we see, like with China in Africa, the flag follows trade. But in no case can trade be divorced from the flag.”

An indicator of the navy’s shift into the mainstream of Indian strategic planning --- even more so than the growing number of capital warships --- is the growth in its command and administrative infrastructure. The deep-water Karwar naval base, located 34 nautical miles (62 km) south of Goa, is already functioning. Aimed at decongesting Mumbai, Karwar will be base for more than 40 ships including the aircraft carrier, Vikramaditya, when it is commissioned.

Also nearing completion is INS Kadamba, an administrative support base, which was commissioned in 2005. Another important addition to the navy’s capabilities is the new Naval Academy at Ezhimala, 280 kilometers north of Kochi, which will soon churn out 750 cadets a year. You will need professionals to man the Indian Navy’s growing fleet.

CREWING A SUBMARINE: LIFE UNDER THE SEA

Sailors who man the 18 boomers of the US navy describe their role thus: while the surface fleet exploits the peace --- exporting security and building alliances through port visits, and exercises with other navies --- the boomer fleet keeps the peace, deterring aggression by its very existence, a force of fully deployed missiles poised to strike.

Submariners, all of the double volunteers, justifiably consider themselves an elite. They must first volunteer to join the navy, undergoing a full year of basic naval training, and again for submarine duty, going through psychological profiling and high-stress physical tests to see if they can cope with the rigours of undersea life. Even so, there is no shortage of volunteers. Says an Indian Navy lieutenant commander, serving on board a submarine, “The extra danger adds a keen edge to life… there’s a huge thrill in wearing the gold badge of a submariner.”

But the admiration that submariners draw comes at a price, especially for the super-elite who serve on a nuclear submarine. They spend long tenures underwater, often measured in months, keeping the missile deterrent deployed for as long as possible. At the end of a deployment, the boomer races into port, the crew changes around (all SSBNs have two full crews), supplies are replenished, and the boomer heads back on station.

“After a while, you just run out of things to do on board”, explains an officer who served on the INS Chakra, a nuclear attack submarine that India leased from the Soviet Union from 1988 to 1991. “You become irritable, you start noticing things about your cabin-mate that you had never noticed before. The way he always leaves the door open… that pimple on his face. Even the lighting on board starts giving you headaches.”

The long stays underwater are enabled by the nuclear reactor. Conventional diesel-electric submarines are propelled underwater by a battery-powered electric motor, which drives a propeller. But batteries discharge quickly and conventional submarines must surface regularly to recharge them through a diesel generator. A surfaced submarine is highly vulnerable to detection, as well as to attack.

Nuclear submarines, in contrast, have no compulsion to surface, since the nuclear reactor needs no air to generate power. A boomer lies silently below the surface some way off the enemy’s coastline and, as long as on-board noise is minimised, remains virtually undetectable. 

Noise is a submarine’s greatest vulnerability. The enemy’s anti-submarine warfare units --- which include other submarines, surface ships as well as maritime patrol aircraft --- are constantly searching with sonar (SOund NAvigation and Ranging) systems for submarine sounds, whether from the engine-room, the propellers, a dropped spanner, even an irate officer speaking loudly to a sailor.

So sensitive are today’s active sonars, and so skilled the sonar operators, that they can differentiate biological signals (whales, fish, even shrimp feeding) from the sounds coming from a submarine. They can make out the number of propellers in a ship, whether they have encountered it before, and the direction and speed that the target is headed.

EXCLUSIVE on BROADSWORD:Back from Garden Reach Shipbuilders in Kolkata. Stay tuned for a series of report... on Project 28, Fast Attack Craft, etc....

(Photo: courtesy Ajai Shukla)

A Fast Interceptor Boat (FIB), built by GRSE for state coastal police forces, being lowered int o the Hooghly River

10 years after Kargil, Bofors upgrade hangs fire

Left: The Bofors 155mm FH-77B, clad in the colours of an Indian Army medium artillery regiment.

Above: The Bofors in action during the Kargil conflict in 1999.

by Ajai Shukla

Business Standard, 19th July 09

On the 10th anniversary of the Kargil conflict, the gun that did so much to facilitate that victory --- the 155 mm Bofors FH-77B --- could be staring at a major setback. With India’s artillery modernisation programme already stalled, the plan to refurbish and upgrade India’s old 155 mm FH-77B Bofors guns also seems headed for failure.

The reason: the Indian Army, long accused of framing its equipment requirements unrealistically, apparently wants the upgraded Bofors gun to deliver better performance than new guns in the market today.

The company that made the guns --- Sweden’s Bofors AB, now owned by British multinational BAE Systems --- has examined the army’s technical demands and decided not to bid, since the demands are unrealistic. Industry sources close to the tender describe it as “a high-tech wish list” that fails to recognise the limitations in upgrading a 20-year-old gun.

According to this source, “Some of the requirements in the upgrade for these 20-year-old guns are more extreme than the requirements for new builds of the FH-77B.”

The tender for modernising the Bofors FH-77B, involves overhauling the gun, fitting a state-of-the-art sighting system, and upgrading the barrels from 39 calibre to 52 calibre. The barrel upgrade will allow the guns to fire heavier ammunition, inflicting heavier damage on targets.

Brigadier Khutab Hai, Chief Executive of Mahindra Defence Systems (MDS), which partners BAE Systems in India, confirms, “It is true that we didn’t respond. We have given the MoD (Ministry of Defence) our reasons. I would not like to comment on why we are not participating, other than to say that some of the specifications asked for by the army cannot be met technically.”

BAE Systems India declined to comment.

Undeterred by Bofors’ withdrawal, the MoD-owned Ordnance Factories Board (OFB) and the Tata group have stepped forward and bid for the Bofors upgrade programme. Neither has ever developed an artillery gun earlier. The OFB, however, has the technical drawings of the Bofors FH-77B gun, which were handed over by Bofors when India signed the contract in the mid-1980s.

In an interview in September 2007, then OFB Chairman Sudipta Ghosh --- currently in CBI custody in a corruption investigation --- had told this correspondent, “The Bofors gun has not been productionised (sic) here, but [Gun Carriage Factory, Jabalpur] has all the drawings…. and based on those, we have indigenized [some parts of the Bofors gun].

Allegations of kickbacks in the 1986 Bofors deal had made it politically difficult to manufacture the guns in India. Eventually, the US $1.4 billion contract ended with the purchase of 410 “made-in-Sweden” guns. The part that was really advantageous for India --- the indigenous manufacture of another 1170 guns under transfer of technology (ToT) --- never took place.

Attempts to fill the resulting shortfall of artillery guns have been stymied over the last decade by erratic procurement practices and unrealistic technical demands. Since 2003, through several rounds of trials, the guns offered by three of the world’s leading artillery manufacturers --- Bofors of Sweden, Denel of South Africa and Soltam Systems of Israel --- have repeatedly failed to meet Indian Army expectations.

For BAE Systems, the decision not to bid was a difficult one. It had set up a JV with MDS --- with BAE Systems holding a 26% stake, the maximum permissible --- primarily to build artillery systems in India. Last year the JV had written to the MoD offering a sweetener: if it won artillery deals like the Bofors upgrade, it would give the influential Indian defence production establishment a share of the work.

The OFB would be given the work of manufacturing the gun barrels; public sector Bharat Electronics Limited (BEL) could make the sighting systems; while the gun trails and gun carriages (on which the guns rest, fire and move) would be built in the new BAE-MDS factory in Faridabad.

Despite all this, BAE Systems has not bid. Industry sources say BAE is confident that the OFB and the Tatas will prove technically unable to upgrade the Bofors guns. Their bids have been resting in the MoD since early 2009.

Army Chief to Antony: don’t block gun trials

(A series on defence procurement bottlenecks)

(Photo: A 155 mm M777 ultralight howitzer, manufactured by BAE Systems, firing in support of coalition forces in Afghanistan)

by Ajai Shukla

Business Standard, 18th July 09

A worried army chief, General Deepak Kapoor, has protested to Defence Minister AK Antony about the derailing of vital defence purchases by allegations of corruption. On 10th June 09, General Kapoor complained about the cancellation of army trials on the Pegasus ultra-light howitzer, after the manufacturer, Singapore Technologies Kinetics (STK) was suspended on suspicion of links with a discredited MoD official.

The trials of the 155 mm Pegasus were to commence on 22nd June at the Pokhran Ranges in Rajasthan. Any delay, General Kapoor warned Mr Antony, would push back the hot-weather trials by a year.

The next day, the deputy chief, Lt Gen MS Dadwal, fired off a letter to the Defence Secretary, Mr Vijay Singh (Letter No 00048/Proc/DCOAS (P&S)/Sectt) reiterating that the Pegasus trials must continue, even while the Central Bureau of Investigation probes whether STK was connected in any way with Sudipta Ghosh --- the former chairman of the Ordnance Factories Board (OFB) --- who was arrested for corruption on 19th May 09. If STK was found guilty, the purchase could always be cancelled.

The army chief, an artilleryman himself, has emphasised on the crucial need for modern artillery; the last important purchase was more than 20 years ago: the 155mm Bofors FH-77B gun in the mid-1980s. Even that was restricted, by allegations of kickbacks, to the direct purchase of 400 guns. The chance to manufacture thousands more in India, through transfer of technology (ToT) was thrown away, even though India paid for the technology. In 2005, amidst a push to buy towed and self-propelled artillery, South African gun manufacturer, Denel, was banned. Soon afterwards, Israeli artillery firm, Soltam Systems, found itself under the scanner.

General Kapoor’s request to Mr Antony has counted for little; the CBI and the CVC suggested to the MoD that the ban on STK continues. The MoD wrote back to Army HQ (Letter No 1(5)/2007/D(Proc) dated 7th July 09) saying that the trials stood cancelled until further orders.

Ironically, the army could benefit from this delay, which creates conditions for bringing another gun into contention: the combat-proven BAE Systems M777 ultra-light howitzer, which is currently doing battle in Afghanistan and Iraq. So far, Pegasus was the only gun in contention --- a monopoly situation explicitly discouraged in the MoD’s Defence Procurement Policy of 2008 (DPP–2008). BAE Systems could not bid because the MoD refused to grant it several months for clearing Indian ammunition to be fired from M777 howitzers.

Major General AJS Sandhu, an Indian artillery expert, explains that --- since British Army M777 crews would fire Indian ammunition during the trials --- British regulations demanded that the ammunition first be “classified”, or cleared by safety experts, before the trials. And since India insisted on firing several types of ammunition during trials, classifying every one of them would take several months.

Asked to confirm, BAE Systems India President, Julian Scopes told Business Standard by email, "In the tender for ultra-light howitzers, there were requirements in the [tender] that made it difficult for us respond in the time available. But we remain hopeful that M777 can be considered and continue to point out to the MoD that the BAE Systems M777 is the lightest 155mm howitzer in the world, in service with the US Army, US Marine Corp and Canadian Army, and the only one that is combat proven."

Defence experts are unanimous that India’s artillery has deteriorated worryingly from poor procurement. In a hurry to acquire ultra-light howitzers, the MoD opted for a single vendor (STK), which offered a gun that has never seen battle. Now, with STK blacklisted, a yearlong delay seems inevitable; but that period, says General Sandhu, could allow the MoD to bring in BAE Systems, generating wider choice and competitive bidding.

The MoD has tendered for three types of guns: self-propelled guns for the mechanised forces; towed guns for divisions deployed in the plains; and ultra-light howitzers for mountainous areas. Two new mountain divisions, being raised for offensive operations on the China border, will be equipped with these guns. Constructed largely from titanium, their low weight provides tactical mobility, or the ability to quickly move around the battlefield on mountain roads and dirt tracks where heavier guns would get bogged down. Ultra-light guns can even be airlifted into inaccessible firing positions by helicopter.

(Part II: Upgrading the Bofors: A tale of two follies)

France's Dassault to ask for Lockheed Martin to be blacklisted in India's medium fighter tender

DUEL OVER DELHI: Two of the six fighters competing for the Indian US $11 billion Medium Multi-Role Combat Aircraft (MMRCA) contract

Above:  A Lockheed Martin F-16 from the Vermont National Guard;

Left: A Dassault Rafale fighter flying over desert scrubland

by Ajai Shukla

Business Standard, 16th July 09

The gloves are off in the competition to sell India 126 Medium Multi-Role Combat Aircraft (MMRCA) for an estimated Rs 50,000 crore. Two days after Business Standard reported on the sudden replacement of Lockheed Martin India’s CEO, Lockheed’s French rival, Dassault Aviation — whose Rafale fighter is pitched against Lockheed Martin’s F-16 IN in the MMRCA tender — is contemplating asking the Indian Ministry of Defence (MoD) to disqualify Lockheed Martin from the tender. The reason: sources in Dassault allege that Lockheed Martin has illegally obtained access to classified documents relating to the competition.

Approached for details of Dassault’s decision, the company’s Indian representative, Pusina Rao, told Business Standard over the telephone from Paris, “Dassault executives are in discussions and will soon reach a final decision on what action it will initiate against Lockheed Martin. In any case, the French government will have the final word, since there are political repercussions involved.”

Rao declined to comment on how long it would take for Paris to approach the Indian MoD for action against Lockheed Martin.

Sources close to the MMRCA contract point out that tension has been growing between Dassault and Lockheed Martin since the end of 2008, when the Indian media reported that Dassault had been eliminated from the MMRCA contract because it had not fulfilled some of the technical requirements spelt out in the Indian tender. Weeks after the report — and apparently after French President Nikolas Sarkozy spoke to Prime Minister Manmohan Singh over the phone — it was announced that Dassault was very much in contention.

But Dassault believed that Lockheed Martin was responsible for those reports. Now, Dassault is determined to get back at Lockheed Martin, citing charges of corruption in clear violation of the guidelines in India’s Defence Procurement Policy-2008 (DPP-2008).

On Tuesday, reporting on Lockheed’s India CEO, Ambassador Douglas A Hartwick’s sudden recall to the US without the appointment of a replacement, Business Standard had quoted Lockheed Martin’s Asia Chief, Rick Kirkland, as saying that while Lockheed Martin had never possessed classified Indian procurement documents, the company’s US headquarters had written to the MoD in New Delhi seeking clarification over two “unclassified files” that had found their way into Lockheed’s possession.

The MMRCA competition is growing increasingly heated, with all six competitors — Lockheed Martin; Boeing; Dassault; Grippen; MiG; and Eurofighter — scheduled to produce their aircraft for flight testing by the Indian Air Force, turn by turn, starting this month.

Was Lockheed Martin’s India CEO sacked?

(Photos: courtesy Ajai Shukla)

A Lockheed Martin F-16 IN Super Viper on display at the Aero India 2009 show in Bangalore in Feb 09

By Ajai Shukla

Business Standard, 13th July 09

With several major defence procurements blocked after the arrest, on 19th May 09, of former Ordnance Factory Board (OFB) Chairman, Sudipta Ghosh, alarmed defence contractors posted in New Delhi are now riveted by another drama.

This fortnight, Ambassador Douglas A Hartwick, CEO, Lockheed Martin India, who was spearheading the world’s largest defence manufacturer’s campaign to sell India the F-16 IN medium fighter aircraft, was withdrawn from India in an unusual hurry. Sources describe Hartwick as “having barely enough time to pack” before catching his flight out of Delhi.

Indian Ministry of Defence (MoD) sources tell Business Standard that Hartwick was removed as CEO after Lockheed Martin was found in possession of two folders containing classified information relating to defence purchases. According to this account, these folders found their way to the corporate headquarters of Lockheed Martin, in Bethesda, Maryland, USA. There, in January 2009, they were mistakenly placed on the desk of an officer unfamiliar with the Lockheed Martin’s operations in India. Reading the “Government of India, Ministry of Defence” heading on the file, the Lockheed Martin official referred the folders back to the Indian MoD in New Delhi.

Since then, a furious MoD had been trying to ascertain how Lockheed Martin obtained those folders and whether ethical standards had been flouted. Since January, through the Aero India 2009 air show in February, where Lockheed Martin displayed its products including the F-16 IN fighter, the MoD has trodden cautiously with Lockheed Martin, without actually taking action against the company. The general elections placed the controversy on the back burner; now, however, comes Hartwick’s departure.

Lockheed Martin strenuously denies possessing any India-related documents that were not already in the public domain. But in a telephone interview with Business Standard, Richard Kirkland, President of Lockheed Martin’s South Asia operations, admitted that, in early 2009, the company did write back to “the appropriate ministry” about issues that “we did not sense as understood well enough… or came through a channel that we would expect.”

Mr Kirkland explained, “We had a couple of issues that we did not understand how they would be treated in terms of (the Defence Procurement Policy – 2008) procedures. We have had occasion to ask various agencies of the Government of India for clarification about information that was contained within a larger context or larger report…”

Mr Kirkland declined to provide details of the two reports referred back to India’s MoD, but emphasised that neither related to the Indian tender for 126 Medium Multi-Role Combat Aircraft (MMRCA), worth an estimated $11 billion.

Lockheed Martin also denies that the Government of India asked, either formally or informally, for their India CEO to be replaced. Richard Kirkland insists that this is a routine turnover as Lockheed Martin moves into an “execution phase”. He said, “I have had discussions with Ambassador Hartwick as early as Aero India in Bangalore last February, about the transition of office…”

Despite Lockheed Martin’s insistence that this move was envisioned since February, Ambassador Hartwick’s successor has not yet been decided. Lockheed Martin’s spokesperson, Jeffrey Adams said, “Richard Kirkland will look after India operations until the company finds a replacement for Ambassador Hartwick.”

Douglas Hartwick is an old New Delhi hand, having served two tenures in India as a diplomat; the second of them was as the Economic and Scientific Affairs Counsellor in the US embassy from 1994-1997. He went on to serve as US ambassador to Laos before he retired, thereby obtaining the honorific of “Ambassador”. He joined Lockheed Martin in 2007.

Headquartered in Bethesda, Maryland, Lockheed Martin is the world’s largest defence corporation with annual sales in excess of $40 billion (Rs 200,000 crores). It employs 140,000 people worldwide, the bulk of them in the United States.

Lockheed Martin is pushing a range of military systems in India including the F-16 IN fighter; the F-35 Lightening II Joint Strike Fighter (JSF) as the IAF’s next generation fighter; and the Aegis Combat System for the Indian Navy’s warships. Last year India signed a contract, under the US government Foreign Military Sales (FMS) programme, to buy six Lockheed Martin C-130J Super Hercules transport aircraft, worth over a billion dollars. India is likely to exercise its option for another six C-130J aircraft.

An interesting article on the F-22 Raptor

This article is from today's Washington Post... a well-rounded study of all the issues and problems surrounding the development of a new fighter aircraft. I'm sure fans of the LCA will have lessons to draw from this. See below:

Premier U.S. Fighter Jet Has Major Shortcomings
F-22's Maintenance Demands Growing

The United States' top fighter jet, the Lockheed Martin F-22, has recently required more than 30 hours of maintenance for every hour in the skies, pushing its hourly cost of flying to more than $44,000, a far higher figure than for the warplane it replaces, confidential Pentagon test results show.

The aircraft's radar-absorbing metallic skin is the principal cause of its maintenance troubles, with unexpected shortcomings -- such as vulnerability to rain and other abrasion -- challenging Air Force and contractor technicians since the mid-1990s, according to Pentagon officials, internal documents and a former engineer.

While most aircraft fleets become easier and less costly to repair as they mature, key maintenance trends for the F-22 have been negative in recent years, and on average from October last year to this May, just 55 percent of the deployed F-22 fleet has been available to fulfill missions guarding U.S. airspace, the Defense Department acknowledged this week. The F-22 has never been flown over Iraq or Afghanistan.

Sensitive information about troubles with the nation's foremost air-defense fighter is emerging in the midst of a fight between the Obama administration and the Democrat-controlled Congress over whether the program should be halted next year at 187 planes, far short of what the Air Force and the F-22's contractors around the country had anticipated.

"It is a disgrace that you can fly a plane [an average of] only 1.7 hours before it gets a critical failure" that jeopardizes success of the aircraft's mission, said a Defense Department critic of the plane who is not authorized to speak on the record. Other skeptics inside the Pentagon note that the planes, designed 30 years ago to combat a Cold War adversary, have cost an average of $350 million apiece and say they are not a priority in the age of small wars and terrorist threats.

But other defense officials -- reflecting sharp divisions inside the Pentagon about the wisdom of ending one of the largest arms programs in U.S. history -- emphasize the plane's unsurpassed flying abilities, express renewed optimism that the troubles will abate and say the plane is worth the unexpected costs.

Votes by the House and Senate armed services committees last month to spend $369 million to $1.75 billion more to keep the F-22 production line open were propelled by mixed messages from the Air Force -- including a quiet campaign for the plane that includes snazzy new Lockheed videos for key lawmakers -- and intense political support from states where the F-22's components are made. The full House ratified the vote on June 25, and the Senate is scheduled to begin consideration of F-22 spending Monday.

After deciding to cancel the program, Defense Secretary Robert M. Gates called the $65 billion fleet a "niche silver-bullet solution" to a major aerial war threat that remains distant. He described the House's decision as "a big problem" and has promised to urge President Obama to veto the military spending bill if the full Senate retains F-22 funding.

The administration's position is supported by military reform groups that have long criticized what they consider to be poor procurement practices surrounding the F-22, and by former senior Pentagon officials such as Thomas Christie, the top weapons testing expert from 2001 to 2005. Christie says that because of the plane's huge costs, the Air Force lacks money to modernize its other forces adequately and has "embarked on what we used to call unilateral disarmament."

David G. Ahern, a senior Pentagon procurement official who helps oversee the F-22 program, said in an interview that "I think we've executed very well," and attributed its troubles mostly to the challenge of meeting ambitious goals with unstable funding.

A spokeswoman for Lockheed added that the F-22 has "unmatched capabilities, sustainability and affordability" and that any problems are being resolved in close coordination with the Air Force.

'Cancellation-Proof'

Designed during the early 1980s to ensure long-term American military dominance of the skies, the F-22 was conceived to win dogfights with advanced Soviet fighters that Russia is still trying to develop.

Lt. Gen. Harry M. Wyatt III, director of the Air National Guard, said in a letter this week to Sen. Saxby Chambliss (R-Ga.) that he likes the F-22 because its speed and electronics enable it to handle "a full spectrum of threats" that current defensive aircraft "are not capable of addressing."

"There is really no comparison to the F-22," said Air Force Maj. David Skalicky, a 32-year-old former F-15 pilot who now shows off the F-22's impressive maneuverability at air shows. Citing the critical help provided by its computers in flying radical angles of attack and tight turns, he said "it is one of the easiest planes to fly, from the pilot's perspective."

Its troubles have been detailed in dozens of Government Accountability Office reports and Pentagon audits. But Pierre Sprey, a key designer in the 1970s and 1980s of the F-16 and A-10 warplanes, said that from the beginning, the Air Force designed it to be "too big to fail, that is, to be cancellation-proof."

Lockheed farmed out more than 1,000 subcontracts to vendors in more than 40 states, and Sprey -- now a prominent critic of the plane -- said that by the time skeptics "could point out the failed tests, the combat flaws, and the exploding costs, most congressmen were already defending their subcontractors' " revenues.

John Hamre, the Pentagon's comptroller from 1993 to 1997, says the department approved the plane with a budget it knew was too low because projecting the real costs would have been politically unpalatable on Capitol Hill.

"We knew that the F-22 was going to cost more than the Air Force thought it was going to cost and we budgeted the lower number, and I was there," Hamre told the Senate Armed Services Committee in April. "I'm not proud of it," Hamre added in a recent interview.

When limited production began in 2001, the plane was "substantially behind its plan to achieve reliability goals," the GAO said in a report the following year. Structural problems that turned up in subsequent testing forced retrofits to the frame and changes in the fuel flow. Computer flaws, combined with defective software diagnostics, forced the frequent retesting of millions of lines of code, said two Defense officials with access to internal reports.

Skin problems -- often requiring re-gluing small surfaces that can take more than a day to dry -- helped force more frequent and time-consuming repairs, according to the confidential data drawn from tests conducted by the Pentagon's independent Office of Operational Test and Evaluation between 2004 and 2008.

Over the four-year period, the F-22's average maintenance time per hour of flight grew from 20 hours to 34, with skin repairs accounting for more than half of that time -- and more than half the hourly flying costs -- last year, according to the test and evaluation office.

The Air Force says the F-22 cost $44,259 per flying hour in 2008; the Office of the Secretary of Defense said the figure was $49,808. The F-15, the F-22's predecessor, has a fleet average cost of $30,818.

'Compromises'

Darrol Olsen, a specialist in stealth coatings who worked at Lockheed's testing laboratory in Marietta, Ga., from 1995 to 1999, said the current troubles are unsurprising. In a lawsuit filed under seal in 2007, he charged the company with violating the False Claims Act for ordering and using coatings that it knew were defective while hiding the failings from the Air Force.

He has cited a July 1998 report that said test results "yield the same problems as documented previously" in the skin's quality and durability, and another in December that year saying, "Baseline coatings failed." A Lockheed briefing that September assured the Air Force that the effort was "meeting requirements with optimized products."

"When I got into this thing . . . I could not believe the compromises" made by Lockheed to meet the Air Force's request for quick results, said Olsen, who had a top-secret clearance. "I suggested we go to the Air Force and tell them we had some difficulties . . . and they would not do that. I was squashed. I knew from the get-go that this material was bad, that this correcting it in the field was never going to work."

Olsen, who said Lockheed fired him over a medical leave, heard from colleagues as recently as 2005 that problems persisted with coatings and radar absorbing materials in the plane's skin, including what one described as vulnerability to rain. Invited to join his lawsuit, the Justice Department filed a court notice last month saying it was not doing so "at this time" -- a term that means it is still investigating the matter, according to a department spokesman. 

Ahern said the Pentagon could not comment on the allegations. Lockheed spokeswoman Mary Jo Polidore said that "the issues raised in the complaint are at least 10 years old," and that the plane meets or exceeds requirements established by the Air Force. "We deny Mr. Olsen's allegations and will vigorously defend this matter."

There have been other legal complications. In late 2005, Boeing learned of defects in titanium booms connecting the wings to the plane, which the company, in a subsequent lawsuit against its supplier, said posed the risk of "catastrophic loss of the aircraft." But rather than shut down the production line -- an act that would have incurred large Air Force penalties -- Boeing reached an accord with the Air Force to resolve the problem through increased inspections over the life of the fleet, with expenses to be mostly paid by the Air Force.

Sprey said engineers who worked on it told him that because of Lockheed's use of hundreds of subcontractors, quality control was so poor that workers had to create a "shim line" at the Georgia plant where they retooled badly designed or poorly manufactured components. "Each plane wound up with all these hand-fitted parts that caused huge fits in maintenance," he said. "They were not interchangeable."

Polidore confirmed that some early parts required modifications but denied that such a shim line existed and said "our supplier base is the best in the industry."

The plane's million-dollar radar-absorbing canopy has also caused problems, with a stuck hatch imprisoning a pilot for hours in 2006 and engineers unable to extend the canopy's lifespan beyond about 18 months of flying time. It delaminates, "loses its strength and finish," said an official privy to Air Force data.

In the interview, Ahern and Air Force Gen. C.D. Moore confirmed that canopy visibility has been declining more rapidly than expected, with brown spots and peeling forcing $120,000 refurbishments at 331 hours of flying time, on average, instead of the stipulated 800 hours.

There has been some gradual progress. At the plane's first operational flight test in September 2004, it fully met two of 22 key requirements and had a total of 351 deficiencies; in 2006, it fully met five; in 2008, when squadrons were deployed at six U.S. bases, it fully met seven.

"It flunked on suitability measures -- availability, reliability, and maintenance," said Christie about the first of those tests. "There was no consequence. It did not faze anybody who was in the decision loop" for approving the plane's full production. This outcome was hardly unique, Christie adds. During his tenure in the job from 2001 to 2005, "16 or 17 major weapons systems flunked" during initial operational tests, and "not one was stopped as a result."

"I don't accept that this is still early in the program," Christie said, explaining that he does not recall a plane with such a low capability to fulfill its mission due to maintenance problems at this point in its tenure as the F-22. The Pentagon said 64 percent of the fleet is currently "mission capable." After four years of rigorous testing and operations, "the trends are not good," he added.

Pentagon officials respond that measuring hourly flying costs for aircraft fleets that have not reached 100,000 flying hours is problematic, because sorties become more frequent after that point; Ahern also said some improvements have been made since the 2008 testing, and added: "We're going to get better." He said the F-22s are on track to meet all of what the Air Force calls its KPP -- key performance parameters -- by next year.

But last Nov. 20, John J. Young Jr., who was then undersecretary of defense and Ahern's boss, said that officials continue to struggle with the F-22's skin. "There's clearly work that needs to be done there to make that airplane both capable and affordable to operate," he said.

When Gates decided this spring to spend $785 million on four more planes and then end production of the F-22, he also kept alive an $8 billion improvement effort. It will, among other things, give F-22 pilots the ability to communicate with other types of warplanes; it currently is the only such warplane to lack that capability.

The cancellation decision got public support from the Air Force's top two civilian and military leaders, who said the F-22 was not a top priority in a constrained budget. But the leaders' message was muddied in a June 9 letter from Air Combat Cmdr. John D.W. Corley to Chambliss that said halting production would put "execution of our current national military strategy at high risk in the near to mid-term." The right size for the fleet, he said, is 381.

Fatal Test Flight

One of the last four planes Gates supported buying is meant to replace an F-22 that crashed during a test flight north of Los Angeles on March 25, during his review of the program. The Air Force has declined to discuss the cause, but a classified internal accident report completed the following month states that the plane flew into the ground after poorly executing a high-speed run with its weapons-bay doors open, according to three government officials familiar with its contents. The Lockheed test pilot died.

Several sources said the flight was part of a bid to make the F-22 relevant to current conflicts by giving it a capability to conduct precision bombing raids, not just aerial dogfights. The Air Force is still probing who should be held accountable for the accident.