The state-run Hindustan Aeronautics Ltd. (HAL) was not meeting the expectations of the Indian Air Force (IAF) as it was not completing orders in time, Minister of State for Defence MM Pallam Raju said on Friday.
“HAL has done a commendable job in absorbing technologies from Russia, France, Britain and Germany. But it is not meeting the expectations of the IAF, as it is not producing in time. It is a question of project management as it is handling too many programmes at a time,” Raju told reporters on the margins of a defence expo here.
In this context, Raju said the ministry was waiting for the recommendations of the B.K. Chaturvedi Committee on restructuring HAL to streamline its operations and focus on priorities.
“The committee is looking into the company’s capacity constraints in executing orders in time. Its competence or facilities is not the issue. We do not want it produce minor components like nuts and bolts, which it has been doing,” Raju said.
“It should be more efficient in executing projects and deliver more in time,” the minister said at the inaugural session of the second edition of the micro, small and medium enterprises (MSME) Defence Expo 2012.
The defence ministry had set up the seven-member committee headed by Chaturvedi, a former cabinet secretary and Planning Commission member, to restructure and strengthen HAL for preventing cost and time over-runs.
The Rs.13,000-crore HAL has been facing capacity constraints and has been behind schedule in executing projects despite a huge order book till 2020.
On divestment of the state-owned defence enterprise, Raju said the government had the will (to divest) but the process was going through various procedures.
Raju’s observations came on a day when R.K. Tyagi took over as the chairman of HAL, which remained officially headless for six months after Ashok Nayak retired on superannuation in August 2011.
The company’s MiG complex managing director P.V. Deshmukh was acting chairman after Nayak retired.
Tyagi was chairman and managing director of state-run Pawan Hans Helicopter Ltd. from May 2007 to February 2012.
Incidentally, Defence Minister A.K. Antony Wednesday told HAL to realign its business processes for strategic alliances and joint ventures and step up research and development efforts to remain globally competitive.
“HAL should partner with design laboratories such as DRDO (Defence Research and Development Organisaiton) and CSIR (Council of Scientific & Industrial Research) for the development of indigenous aircraft, engines and systems,” Antony said at a meeting of the parliamentary consultative committee in New Delhi.
“It should adopt best practices followed by global leaders in the field of project management, quality control systems, vendor deployment and supply chain management,” he added.
The Chaturvedi panel has been asked to suggest how best the spin offs from HAL order book can be earnest to ensure greater involvement of the private industry in the defense sector.
-via The Economic Times.