Background
The Indian Coast Guard ICG is responsible for the security and safety, including constabulary and humanitarian functions, spanning across an EEZ of 2.2 million sq km(18th largest in the word), protect a coast line of 7516 Kms (15th largest in the world) and assumes regional responsibility for SAR cover to about 1950 Nm South of Kochi.
Since modern maritime challenges are unannounced and threat developments take place with great rapidity, it is vitally important for the ICG to have sizable air assets for effective surveillance, constant monitoring and efficient threat responses such as violations of Indian customs and regulatory laws, Illegal Unregulated and Unreported Fishing, marine pollution, smuggling of drugs, small arms and illegal immigrants, etc. which impact coastal safety and security, result in economic losses, create environmental challenges of marine pollution that is fast encroaching into the protein and salt food chain leading to health concerns and leads to the ever increasing social costs due to ingress of drugs and terrorism breaching through the maritime boundaries of our country.
Modern maritime aircraft can be easily equipped with sensors and mission systems dedicated to fulfilment of the essential surveillance and monitoring missions of any modern Coast Guard to mitigate such challenges and threats. Assuming state-of the-art surveillance equipment are fitted on board modern aircraft, flexible overviews of survey areas for marine pollution and sea traffic, quick assessments of oil spill sites, and deterrence of potential polluters, drug traffickers and smugglers can be undertaken expeditiously and at a very low cost. The ICG has no better option than to use modern aircraft for these missions.
However, ICG aviation assets only comprise 38 Dornier coastal surveillance aircraft, four twin-engine Dhruv advanced light helicopters and 20 Chetak single-engine helicopters Assuming even a serviceability rate of 75% these assets are grossly inadequate to protect our assets, resources and the lives and livelihoods of 18% of India’s population living in nine coastal states, four union territories and 77 districts. Further, Hon’ble Prime Minister, Shri Narendra Modi, has said that the IOR region views India as the net security provider. This makes the requirement for surveillance and response to a variety of maritime challenges very complex, necessitating a higher force level of aircraft assets.
Further, these aircraft are all sourced from HAL which also must produce the same aircraft for the Indian Navy and the Indian Air Force with an average production capacity of less than 6 Do-228 aircraft per year and back log of orders. Given these circumstances, and the fact that the ICG would require 120+ aircraft by 2030, it would not be possible for the ICG to achieve the vitally required force levels of its aviation fleet in the given time frame through exclusively relying on induction of ‘new buys’ from HAL.
Efforts at obtaining aircraft from the ‘market’ have yet to bear fruit. The ICG had earlier issued a RFI to examine feasibility of a larger (6+3+10) Multi Mission Maritime Aircraft (MMMA) which would be integrated by the Center for Airborne Systems (CABS) with various sensors and mission equipment for a variety of missions but most notably pollution surveillance. The Defence Acquisition Council in its meeting of 23 December 2016 had accorded AON for procurement of 6 MMMA at a cost of about INR 5500 Crs. Therefore, it is evident that the MoD have recognised that MMMA are necessary for maritime surveillance interdiction, air ambulance and pollution surveillance and control. The sensors for these aircraft were to be integrated by CABS>. One possibility was to consider additional CASA 295 aircraft already under negotiation as the AVRO Replacement Program of the IAF. It is possible that the case for MMMA has thus been combined with the IAF AVRO replacement program being undertaken in India as a TATA-Airbus consortia endeavour. This project which commenced in 2011 is still to see contract conclusion and the first induction would begin 36 months from contract conclusion and payment of mobilisation advance. Deliveries for the IAF may only be completed not before 6-7 years since there is a substantial Make component in the program. Only then, would the ICG get its aircraft for integration of the various mission specific equipment. In any event, the earliest integration, given that CABS would be undertaking this exercise on a new platform, could take another two years to achieve the relevant air worthiness requirements. Hence, in the best case scenario, the ICG would have only acquire this capability not earlier than 2030.
As reported in the media the ICG has also not met with success in its quest for the Medium Range Maritime Reconnaissance (MRMR). The Request for Proposal (RFP), it had issued to acquire six MRMR aircraft, was cancelled earlier this year when both the shortlisted Be-200 and the Bombardier Q-400 apparently did not meet the required performance parameters. A fresh RFP with revised Staff Requirements is possibly being contemplated. This fresh case, given the historical record of acquisitions, would take at least until 2027 before the MRMR is deployed by the ICG.
In the context of the onerous responsibilities and role of the ICG, there is a huge capability gap which is highly unlikely to be bridged before 2030 by when only the ICG may receive its first operational integrated MMMA on the C-295 platform or get the first MRMR by 2027. Therefore, whilst the urgent necessity for the induction of the MMMA and MRMR has been recognised since 2016 the realisation of its required force levels will not be earlier than 2032. But, is such a capability gap acceptable in the present and predicted security environment, the necessity for adhering to the sustainable development goals and also to meet the COP 21 objectives – which requires very efficient and effective pollution surveillance and response?
The ICG could consider the induction of commercially available retrofitted aircraft for medium range surveillance and pollution control on lease as the nation cannot afford to be exposed to this vulnerability until the MMMA or the MRMR are inducted into service a decade or so from now.
Leasing under DAP 2020
The Defence Acquisition Procedure 2020 has several firsts to its credit. It has introduced Buy Global (Make in India) category, expanded the methodologies for acquisitions of ships under nomination and competition route and introduced two fresh chapters on methods of acquisition for ICT equipment and acquisition through leasing. This article is more focused on the possibilities that the lease option offers for rapid force modernization and force level maintenance for the armed forces using the ‘Acquisition through Lease’ category particularly for aircraft for which there is substantial experience amongst potential leasors.
Lease of assets for force modernisation and maintenance, to meet urgent operational requirements or for stop gap periods pending acquisition of the selected platform has been a practice followed by several countries for several decades. Lease of Excess Defence Articles by the United States Government to friendly countries began soon after World war II. in the past. Since then the concept has gained salience. Several navies have leased OPVs, Fleet Tankers, Yard craft etc. Air Forces have also benefitted from Leasing. The Royal Air Force leased P-8s, the Philippines leased the TC90 from Japan, Italian Air Force leased 34 F-16s Fighters from the USAF to fill a gap during the transition from the F-104 and the Eurofighter. Norway and Denmark are using long term wet leased aircraft and helicopters for Maritime Patrol and oil pollution detection at sea. As reported in Defencenews “The Czech Ministry of Defence and Armed Forces and the Swiss Department of Defence, Civil Protection and Sports are considering a joint lease of 13 Airbus A400M transport aircraft from the German Bundeswehr.” The German Air Force has been operating Leased HERON UAVs for military operations in Afghanistan and Mali. SaaB had leased its Gripen Fighters to the Czech Republic and Hungary in the not so distant past. In effect there is considerable confidence in the lease of aircraft by the armed forces.
There is precedence for leasing in India s well. India has also previously leased nuclear submarines from Russia. More recently the Indian Navy has issued a RFP for ‘hiring’ (which is another word for ‘lease’) of a ‘multi purpose support vessel, including crew, for providing technical, logistics and communication support to Indian Navy for coastal security, including towing of naval ships, yard craft, auxiliary vessels, pontoon, fenders etc’. The RFP conditions included ‘carrying Indian Navy Operations personnel on board the hired vessel when required’. During Op Pawan, Op Swan and Op TASHA, the Indian Navy had ‘wet-leased’ various types of vessels and crafts for surveillance of the Palk Strait and other notified areas to prevent infiltration by the LTTE.
Lease of helicopters is a regular practice with many state governments. In 2020 alone the Government of Kerala, Government of Tripura and the Government of Arunachal Pradesh have leased or sought to lease specific helicopters for their requirements.
The above examples establish that the Lease option has definitive merits and is adopted by several countries. Leasing offers many advantages for cost constrained and limited duration stop gap requirements by way of Faster induction, Enables concentration on core competence, Removes technological complexity and lowers manpower costs for operations, maintenance and training and Lowers cost and time of acquisition and yet meets immediate operational objectives. It is the Vendor’s responsibility to ensure the requisite force levels and guarantee Service delivery on a pay by use model. From a structuring perspective there is flexibility in availing one of several types of lease, wet, dry, financial or operational lease.
So, it is not a completely new approach for rapid force augmentation and therefore the ICG can seriously explore the option for lease of medium range MRMR aircraft, specifically configured with maritime surveillance and monitoring functions, airborne anti-pollution suites and secure communications for bridging the capability gap until the MMMA and the MRMR aircraft are inducted. It is also possible for the ICG to explore the leasing of helicopters until its ‘regular’ helicopters are contracted. Several companies are offering ISR surveillance on diverse customer specified platforms. These could include the large single aisle Boeing 737-600 and Airbus 320(ceo) platforms on the one hand or to medium size Q-400, EMB 145 or Gulfstream platforms or the smaller aircraft and highly versatile aircraft such as King Air 350 ER, Pilatus PC 12 or the Twin Otter Series 400 etc. These aircraft typically have an endurance of about 9 hours and assuming a transit flight to the search area of about 2 hours would still provide a Time on Task of about 4 hours. This translates to a surveillance area of about 60kmsx150kmphx4hours = 36000 sq km per aircraft per day.
So far as helicopters are concerned the options include refurbished pre-owned ‘commercial’ AS 365 N3, AW 109 etc. to marine specifications and requirements of the customer.
The ‘lease’ business model could be that the lessor positions the required number of aircraft at customer specified designated locations with the flight and maintenance crew included but the operational crew (Observers) being ICG personnel. The remuneration model could be a fixed price element combined with a variable ‘power by the hour’ contract with assured minimum offtake of services per month, a guaranteed service contract period of 5-7 years (extendable as mutually agreed) and broadly along the lines as mentioned at Chapter IX of the DAP 2020. Incidentally after decades of experience IATA have published “Guidance Material and Best Practices for Aircraft Leases (2017)” which can serve as the template for induction of leased aircraft.
From a cost perspective a wet lease option of a pre-owned platform such as the King Air 350 ER with state of the art specifications of Maritime Mission Management systems bundled performance based maintenance with mixed crew of Pilots (by leasor) and Observers (by lessee) would be about INR 25-30 Crs per year per aircraft with assured 1500 hours of mission flying per year per aircraft. So, for a fleet of 12 such retrofitted refurbished aircraft operating at 100 % levels of assured availability the total annual cost would be only about INR 300 crs. The leasor would have to keep additional aircraft as replacement to meet the 100% serviceability criteria which would ensure the daily availability of 12 aircraft under all circumstances. Such aircraft could be made operationally available in batches of 2-3 aircraft with first delivery within 6 months after contracting and achieve the required force level within 15-18 months.
Compare these metrics with the fully configured ‘new build’ MMMA with an acquisition price tag of about INR 400-500 Crs per aircraft and the associated Maintenance, Training, spares costs extra. The annual recurring expenditure to meet the same Annual Flying Task would be about INR 60 Crs per aircraft per year. Further this capability may only be available by 2027-2032. In addition, pilot and maintenance crew training and retention would be other contributions to the total cost of ownership. For the MRMR the price tag for ‘new builds’ retrofitted to contemporary Mission Management requirements could be about Rs 250-270 crores each and the first aircraft available only by 2027.
Conclusion
Coastal surveillance cannot be held hostage to such a delay and a fast track solution must be sought to bridge the capability gap. Hiring or lease of aircraft is a common best practice worldwide and ICG is well placed to leverage the leasing option provided in the DAP 2020 to meet its urgent operational responsibilities in the region. Acquisition of state-of the-art surveillance equipment fitted ‘leased’ pre-owned aircraft would provide an effective, efficient and economic option until the MMMA/MRMR assets are inducted into service.
The Defence Acquisition Procedure 2020’s introduction of Lease as a category for defence acquisitions is a transformational procedural change that facilitates a seamless transition from one capability to another through the intermediate mechanism of leasing. Most importantly, such a case can also be steered under the Fast Track Procedure of DAP 2020 and hence rapidly build national capability for more effective coastal surveillance and security – a dire need of the nation in the current and forecast security situation.
By Chiraag Samaddar
(The author is a Policy Professional working on Aerospace and Defence, Export Controls issues at the Federation of Indian Chamber of Commerce and Industries. All views expressed are personal.)