HAL's angst: it gets largely repair jobs, when it needs big orders

Rafale would have been the ideal contract to lift HAL out of financial issues: HAL officials

By K.M. Rakesh in Bangalore
  • Published 9.01.19, 2:52 AM
  • Updated 9.01.19, 9:14 AM
  • 2 mins read
  •  
A company that employs close to 30,000 people, more than 9,000 of them highly qualified engineers and designers, would ideally need an order book of Rs 2 lakh crore, a HAL official said. (Shutterstock)

The main worry of senior officials of Hindustan Aeronautics Ltd (HAL) is the depleting order book as a military aviation company its size will require at least three times of what it has now.

“What the defence minister tweeted on Sunday is correct but that is not enough,” a senior HAL official told The Telegraph.

“HAL has signed contracts worth Rs 26570.8 Cr (Between 2014 and 2018) and contracts worth Rs 73000 Cr are in the pipeline,” the defence minister’s official Twitter handle had posted on Sunday after Rahul Gandhi had accused minister Nirmala Sitharaman of lying in Parliament.

“The tweet itself shows that the orders ‘signed’ by the IAF, the army, the navy and the Coast Guard are worth Rs 26,570 crore. And that is part of the Rs 60,000-crore order books we have now,” said the official.

In order to run a company that employs close to 30,000 people, more than 9,000 of them highly qualified engineers and designers, it would ideally need an order book of Rs 2 lakh crore, said the official.

“A huge chunk of the Rs 60,000-crore order book relates to the overhaul of Sukhoi combat jets. A military aviation company the size of HAL cannot run for very long with just the income from MRO (maintenance repair and overhaul),” he said.

“Our orders are already fast depleting and we would be in a much deeper crisis if we do not get more orders within a few months,” he said.

On Sunday night, the HAL headquarters tweeted that it had taken an overdraft of Rs 962 crore.

“In view of the various media reports on HAL, following is clarified. HAL has taken overdraft of Rs 962 crores. With anticipated collection up to March, the cash position is expected to improve. Orders for LCA MK 1A (83) and LCH (15) are in advanced stages,” the tweet said.

The tweet suggests the state-run company is desperately waiting for the orders of 83 Light Combat Aircraft MK 1A and 15 Light Combat Helicopter.

“Without the two orders, we will be in deep trouble. Only such big orders will help us maintain the cash flow and help bail us out from this situation,” said the official.

While HAL is no more a contender for the Rafale fighters, the order for 83 next-generation LCA MK 1A is at the technical evaluation stage.

HAL has been nursing another grouse for quite a while now. “Our defence minister has not made a single visit to any of the HAL facilities till date,” said the official.

“She often uses our airport while travelling to Bangalore. Yet she didn’t find time to drive just a short distance within the HAL complex to visit the LCA hangar,” lamented an official.

While Arun Jaitley had visited the Bangalore complex twice when he held additional charge of the ministry, Manohar Parrikar had visited several times when he was defence minister, he said.

A senior official attached to the company’s headquarters said the time-consuming design and manufacturing process also needed to be kept in mind by the government.

“Rafale would have been the ideal contract to lift HAL out of the financial issues. But since that’s a forgotten story now, at least we require the LCA orders as quickly as possible,” said the official.

He said the Rs 26,570 crore the defence minister’s official handle tweeted about would hardly be of much help. “Yes, it’s quite good in terms of keeping certain sections running. But we need the LCA order to stay alive,” he said.

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