The Light Utility Helicopter, which Hindustan Aeronautics Ltd is designing for the Indian military, has encountered turbulence even before leaving the drawing board. French engine-maker Turbomeca, whose vaunted Shakti engine was to power the LuH, is demanding what Ministry of Defence sources term 'extortionist prices' for integrating the Shakti with the LuH.
HAL had paid Turbomeca to develop the Shakti engine for the Dhruv Advanced Light Helicopter; and the Shakti also powers the Light Combat Helicopter that HAL is developing. Because the Shakti is custom-designed for the high altitudes -- between 15,000 and 20,000 feet -- that characterise much of India's border, and because HAL and Turbomeca will jointly manufacture the engine in India, the Shakti was selected to also power the LuH.
But the Dhruv and the LCH are twin-engine helicopters, while the lighter LuH will fly with a single Shakti engine. That requires Turbomeca to design a new transmission for the LuH. Additionally, the European Aviation Safety Agency (EASA) will have to certify the Shakti for single-engine operation. To HAL's dismay, Turbomeca has demanded Rs 190 crore for these jobs, more than half the LuH's entire budget of Rs 376 crore.
In formulating the LuH development budget, HAL had assumed that Turbomeca would design the new transmission system cheaply, to benefit from additional orders of hundreds of Shakti engines over the service life of the LuH.
An outraged HAL board, having decided against paying so much to Turbomeca, has approached other engine-makers -- including General Electric, Honeywell, Rolls-Royce, and Pratt & Whitney -- for an engine for the LuH.
Reliable MoD sources tell Business Standard that Turbomeca is now negotiating with HAL to compromise on a price for the Shakti. The French company has offered to reduce the cost by Rs 90 crore, provided that the amount is adjusted against its offset liability. But HAL rejected that offer last week, telling Turbomeca that even Rs 100 crore is too high a price. Turbomeca is now preparing a fresh proposal.
Senior HAL sources complain that Turbomeca is taking advantage of the rigid timelines that the defence ministry has imposed on HAL in the LuH project. The MoD has split its order for 384 LuHs between a global tender for 197 ready-built LuHs; and an order for HAL to develop and build 187 LuHs by 2017.
The MoD has specified a target date for each of the LuH's development milestones: building of a mock-up; the design freeze; the first flight; Initial Operational Clearance, and so on. Each time HAL misses a milestone, its order reduces from 187.
Turbomeca apparently believes that these time obligations reduce HAL's bargaining leverage. HAL, however, has decided early not to put all its eggs in the Turbomeca basket.
HAL Chairman Ashok Nayak -- responding to a question from Business Standard whether a new engine for the LuH made sense when the Shakti would allow the standardisation of a common engine across many more helicopters -- replied, "We are using the Shakti engine for the Dhruv and for the LCH. It is not necessary to also use it on the LuH. How many helicopter manufacturers use a common engine on three entirely different helicopters? One should not overdo the standardisation aspect".
So far, HAL is comfortably beating the MoD clock and plans to beat the 2017 deadline by a full two years. It has built a mock-up within the timeline; plans to freeze the LuH design by the end of this year; fly the LuH for the first time by 2012; certify it by 2014, and begin delivery by 2015.