Spl purpose vehicle may fuel HAL civilian aircraft plans

With Hindustan Aeronautics Limited (HAL)—the country’s sole manufacturer of military aircraft — deciding to take a plunge into the lucrative civil aviation market, the Centre may create a special purpose vehicle to allow HAL and National Aerospace Laboratories to jointly design and develop a 90-seater turbo-prop carrier.

The new aircraft may be used to connect metros to  smaller cities in the country.
The Cabinet Secretary is likely to chair a meeting next week in Delhi to firm up a plan on how the two Bangalore-based agencies and the ministry of civil aviation can be brought together on a common platform to realise the plane by 2020, sources told Deccan Herald.

The new aircraft has been proposed in anticipation of a boom in the civil aviation market within a decade, notwithstanding the current dip in air traffic due to an economic downturn.

An official estimate suggests India has the capacity to absorb over $ 100 billion worth of civilian aircraft in the next 20 years.

“By 2020, India will be world's third largest civil aviation market,” HAL chairman R K Tyagi said at a seminar here on the eve of the 9th edition of Aero India that will have a sizeable participation from the civil aviation industry.

As the bulk of growth is expected in emerging business hubs rather than metros, HAL may take a lead role in the national civil aircraft development project, which seeks to design and develop the aircraft in the next six-seven years.

But the government’s business rules are coming in the way of cash flow to the Rs 7,500-crore project because of the involvement of HAL, NAL and the ministry of civil aviation. The formation of a special purpose vehicle is one of the models being looked at to bypass  bureaucratic hassles, sources said.

The Tejas light combat aircraft was created by forming a separate empowered unit, Aeronautical Development Agency, to cut down on procedural delays. But problems are more complicated for civilian aircraft.

Out of the total estimated project cost, Rs 4,325 crore will be used for design while the remaining Rs 3,175 crore is earmarked for production.

HAL will also offer its services for civilian aircraft whose numbers are expected to double in the next decade from the existing 430 planes operated by commercial airlines as well as other government and non-government users.

“In the next two days, the director-general of civil aviation will provide HAL with a licence to use the Ojhar base in Nasik for civilian aircraft,” Tyagi said.  HAL has one airport in Bangalore and an airstrip in Kanpur for servicing civilian aircraft.