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HAL-Turbomeca sign JV in Paris for ~200-crore MRO facility for helicopter engines

Business Standard:  June 18, 2015

New Delhi: In Paris on Wednesday, Hindustan Aeronautics Ltd (HAL) signed an agreement with French engine manufacturer, Turbomeca, to support the redoubtable Shakti helicopter engine, which would power a fleet of 1,000 Indian military choppers during the coming decade.

HAL's joint venture (JV) with Turbomeca, long in the making, would support the Bengaluru-headquartered aerospace company's ambitious vision of becoming a helicopter production giant. India's military has already committed to buying three different types of HAL helicopters, all powered by the Shakti engine that Turbomeca custom-designed for HAL. Optimised to fly at extreme altitudes of up to 6,000 metres (almost 20,000 feet), the Shakti engine supports Indian army troops deployed on the Himalayan watershed.

An HAL release announced that the new JV would provide maintenance, repair and overhaul (MRO) support for the Shakti engine, as well as for the Turbomeca TM333 engine that was initially fitted on the Dhruv ALH while the Shakti was being developed.

While not announced, Business Standard learns that HAL and Turbomeca would have equal shares in the JV, which is slated to come up in Bengaluru for an estimated Rs 200 crore. Meanwhile Defence Minister Manohar Parrikar's home state, Goa, is believed to be pitching for the facility to be established there.

"This JV will boost the 'Make-in-India' drive, considering the forecast that around 1,000 Shakti engines will be flying in India over the coming years," announced an HAL press release from the Paris Air Show on Wednesday.

These helicopters include the Dhruv Advanced Light Helicopter (ALH), which is already in service in large numbers. With 159 Dhruvs already sanctioned for the military, an order for another 73 is currently being processed.

A second chopper, the Light Combat Helicopter (LCH), is at an advanced stage of prototype testing. The Indian Air Force (IAF) has committed to buying 65 LCH, while the army wants 114, adding up to an initial commitment of 179 LCHs.

Two Shakti engines power each Dhruv ALH and LCH. The overall requirement of 411 of these two helicopters would need almost 850 Shakti engines, including some spare engines.

Then there is the Light Utility Helicopter (LUH), which HAL is developing, and expects to fly later this year. The defence ministry has committed to buying 187 LUHs. Each of these light, three-tonne helicopters has a single Shakti engine.

Simultaneously, the defence ministry has cleared a global tender for another 197 reconnaissance and observation helicopters (ROH), to be built in India in partnership with a foreign aerospace vendor. With HAL at an advanced stage of developing the LUH, which has similar specifications to the ROH, top company sources suggest HAL would offer the LUH in this competitive tender.

"Given how much we have indigenised the LUH, and its low cost, it would be hard for a foreign company to bid lower than us in the ROH tender. Remember, foreign vendors would be liable for offsets and would be required to indigenise up to 50 per cent," says an HAL executive.

HAL plans to build these light helicopters at a new facility on 610 acres that it has bought in Gubbi Taluk, Tumkur District, about 125 km from Bangalore. Additionally, there could be export orders for several of these helicopters. The Dhruv ALH is already in service in Ecuador and Nepal, and interest has been reported from Malaysia and Indonesia.

Priced at about Rs 44 crore, the Dhruv undercuts rival western helicopters. Increased Shakti production and the new MRO would lower acquisition and operating costs further.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.