Thursday, September 23, 2010

BAE Systems offers Carriers to India

BAE Systems, the world’s third-richest arms corporation, called media person for a four-day media tour to the UK. What surprised them was not the invitation. The rate at which India is buying up foreign weaponry, global arms merchants, eager for publicity, would happily pay for our small defence journalist community to globetrot through the year. What was remarkable in the BAE invitation was the company’s proposal to fly us to Glasgow for the launch of a new Royal Navy destroyer and a tour of other warships. They wondered, why was British shipbuilding being showcased to India in the absence of a plan to buy a warship from the UK?

A cash-strapped UK defence ministry, unable to pay for the two aircraft carriers on order with BAE Systems, had offered one of them to New Delhi. In the circumstances, a few news reports in India on “high-quality British shipbuilding” could only be useful.

Given that the Indian Navy already has four aircraft carriers in the pipeline — the lame but functional INS Viraat; the infamous Gorshkov (renamed INS Vikramaditya), being constructed in Russia; a third (so far unnamed) carrier being built in Cochin Shipyard; and another to follow that — Britain’s offer of yet another carrier might be considered wildly optimistic. But desperate times demand desperate measures and the UK is conducting its greatest strategic downsizing since the 1968 retreat from the Suez. David Cameron’s new government has initiated a strategic defence and security review (SDSR), which involves defence spending cuts of 20-30 per cent to bring down military expenditure to below 2 per cent of GDP.

Amongst the several multi-billion pound programmes that seem certain to be pared is the Carrier Vessels Future (CVF) programme: the £5 billion ($8 billion) construction, mainly in British shipyards, of two 65,000-tonne aircraft carriers called the HMS Queen Elizabeth and the HMS Prince of Wales. These were ordered before the global economic downturn; the Labour government thought they were essential for the Royal Navy to retain its centuries-old capability to project power across the globe. Even amidst today’s cost-cutting, current defence secretary Liam Fox had hoped to build both carriers, operating only one with the other kept in reserve. But just days ago, BAE boss Ian King revealed that the government had asked BAE Systems to evaluate the cost of cancelling the CVF programme entirely.

With £1.2 billion ($1.8 billion) already spent on the CVF, and 4,000 skilled workers busy fabricating the Queen Elizabeth, London knows that an outright cancellation would ruin Britain’s shipbuilding industry. And so, one of the aircraft carriers hopes to wash up on India’s shores.

The government of India must quickly decline the British offer. London could be forgiven for concluding from the fact that four Indian warships are on order from Russian shipyards, and the Indian Navy wants to build more abroad, that Indian shipyards cannot meet the country’s maritime security needs. The truth, however, is that India looks abroad for warships because of the MoD’s inability to streamline planning, sanctions and procedures, and to bring together the skills of the multiple agencies that contribute towards developing and building a warship.

Consider our production facilities. The MoD owns and controls four defence shipyards: Mazagon Dock Ltd, Mumbai (MDL); Garden Reach Shipbuilders and Engineers, Kolkata (GRSE); Goa Shipyard Ltd (GSL); and the recently (and misguidedly) acquired Hindustan Shipyard Ltd, Visakhapatnam (HSL). Then there is Cochin Shipyard Ltd (CSL), a central PSU, which is building an aircraft carrier for the MoD since none of the MoD shipyards has facilities large enough for this. And, very recently, there is the emergence of state-of-the-art private sector shipyards — L&T, Pipavav and ABG Shipyards — with global-quality facilities.

Also in the production loop is the Directorate General of Naval Design (DGND), which has achieved notable success in the conceptual design of the Indian Navy’s recent warships. Each shipyard, too, has its own design department, which translates the DGND’s conceptual design into engineering drawings of the thousands of components that make up a ship. Then there are Defence Research and Development Organisation (DRDO) laboratories, which produce high-technology systems like sonars, radars, torpedoes etc., many of which money cannot buy. The existence of these technology labs is a key attribute of a warship-building country.

Finally, there are the educational institutions that feed into, and off, these agencies: the departments of naval architecture in IITs and universities; research departments in colleges and universities that feed into DRDO laboratories and assist them by taking on research projects.

India has, in varying degrees, every component of this ecosystem. The MoD must bring them together, compensating for one component’s weaknesses by harnessing another’s strengths. Instead, South Block’s proclivity to view each entity individually creates the impression of a shortfall of capacity.

Consider how the MoD is processing India’s second submarine line, allowing two of the six submarines to be built abroad although massive capacities will lie unutilised in L&T and Pipavav (Business Standard has carried a four-article series on this from August 30 to September 2). Here is the MoD’s logic: Pipavav has the facilities but not the experience; L&T has the experience, but not the facilities; MDL has both, but it doesn’t have the capacity!

Astonishingly, South Block considers it preferable to buy submarines from a foreign shipyard, rather than bringing together Indian capabilities that could produce them far cheaper, create jobs and build capacities. The MoD must be stopped from building abroad. India needs a significant navy but it can only afford to build up quickly if the MoD brings together the warship-building eco-system. Indian money must build Indian capabilities, not pay for British shipbuilding industry to survive.

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