New Delhi: It was about to break the monopoly of the state -run Hindustan Aeronautics Limited (HAL) and open the Indian aerospace sector for private companies. However, before the meeting of the Pre-E-Relations of Interest to be conducted by the Aeronautical Development Agency (ADA), private companies allege that the entire process is heavy in favor of HAL.
Edd 18 was June Taking a big step By inviting the expression of interest (EOI) for its prototype development, the advanced medium Combat Aircraft (AMCA), the direction of developing fifth generation fifteen -generation fighter jets.
This marked a historical change in defense procurement and industrial participation policy because it meant that HAL would have to bid with private companies to bag the contract.
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Under normal circumstances, HAL AMCA would have a natural production partner for the project, such as in the case of Tejas or license production of MiG and SU -30 MKI fighters in India.
“The execution model approach provides equal opportunities to both private and public sectors on a competitive basis. They can either bid either independently or as joint enterprises or as consortia,” Ministry of Defense statement Release 27 May said.
However, with EOI now formally issued to interested parties, industry sources stated that HAL will tie with one or two companies and will win the contract. They say that no Indian private company can win this AMCA contract on its own due to “stringent qualification criteria”.
Sources said that the EOI states that an Indian company (single or JV/Consortium) needs to be owned and controlled by Indian citizens residents for both lead antigens and JV Partners.
“This means that private companies, who do not have a full fighter manufacturing experience, cannot enter a joint venture with a foreign original equipment manufacturer (OEM). Still Indian companies are doing so with the help of construction parts and components foreign OEM,” said one of the sources.
Another source said that the EOI states that all major managerial posts, but CEOs, CFOs, COOs and the entire board of directors are not limited by individuals who are residents of Indian citizens. This means, the source said that no private company can actually hire a foreign talent at the top to lead an enterprise.
Sources also said that the annual turn-over of the single/lead company will have a minimum of Rs 2,000 crore in the last three financial years (FYS). In addition, the minimum annual turnover for the last three FIS in non-Lead partner should be Rs 200 crore.
The only company that fits this criterion is HAL, he said.
In the case of JV/Consortium, the maximum share of the lead company should not exceed 50 percent and the total number of permissible partners is three. The EOI also states that the positive net worth in single/lead institutions as well as a non-Leid partner in the last three FYS.
Sources also alleged that scoring marks for each criteria are also bent in favor of HAL whether as a single unit or a joint venture with one or two private firms.
“Before mentioning EOI, the original plan was Hail, HAL will be the lead integrator and outsource a lot of production for three-four private firms. It includes wings, torso and other parts with HALs that are becoming the lead integrators. It is actually going to be now. No private company will be winning this contract as a lead agency.
(Edited by Tony Rai)
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