Par panel flags 'alarmingly low' order books of defence PSUs, raises doubt over sustainability

Amid a political furore over the order books of state-run aerospace major HAL, a parliamentary panel Monday highlighted the "alarmingly low level" of orders to defence PSUs and raised doubts over the sustainability of these firms beyond 2020-21.

The panel said the current orders "do not sustain" the public sector undertakings (PSUs) such as HAL, Mazgoan Docks Ltd. and Goa Shipping Ltd. beyond 2020-21, adding that they are not being able to use full production capacity due to lack of orders.

"The committee referring to the alarmingly low level of order books of defence PSUs such as Hindustan Aeronautics Ltd. (HAL), Bharat Dynamics Ltd. (BDL), Mazagon Docks Ltd. (MDL), Garden Reach Ship Building and Engineers (GRSE), Goa Shipyard Ltd. (GSL), whose current order books do not sustain them beyond 2020-21, and are not able to use full production capacity due to lack of orders, had sought to know the factors that led to such an alarming situation which resulted in idling capacity of these PSUs," the panel headed by senior BJP lawmaker Kalraj Mishra said.

In an Action Taken Report submitted to the panel, the Ministry of Defence said with regards to Hindustan Aeronautics Limited, the major existing orders for supply of aircraft and helicopters are expected to be liquidated by 2020-21.

This does not include the 41 Advanced Light Helicopter for the Army, 32 for the Navy and Coast Guard and eight Chetak for the Navy for which contracts have been signed during last year.

On completion of the Su-30MKI programme, it said the original plan was to utilise HAL's Nashik facilities for manufacture of Fifth Generation Fighter Aircraft (FGFA).

"However, the programme is awaiting R&D contract finalisation to proceed further. Similarly, the MMRCA programme, with HAL as the Lead Production Agency, the MTA ( Multi-role Transport Aircraft programme) and IJT (Intermediate Jet Trainer) development didn't materialise as planned," the ministry said.

It added, "This has led to lack of fresh orders at Aircraft Division Bangalore and Transport Aircraft Division Kanpur."