L&T, Mahindra may bid to partner govt in developing passenger aircraft

Mumbai/Bangalore: India’s largest engineering company Larsen and Toubro Ltd (L&T) and atomotive firm Mahindra and Mahindra Ltd (M&M) say they will bid to become partners of the government in developing India’s most ambitious passenger aircraft programme.

The National Aerospace Laboratories (NAL) will lead the Rs2,500 crore project to design and produce 90-110-seat planes, called regional transport aircraft (RTA), to connect smaller cities to metros. A similar amount will be invested in manufacturing and building a service network for the plane.

Last week, a government panel approved a one-year feasibility study for the project. It also mandated V. Sumantran, vice-chairman of Hinduja Automotive Ltd, and Arun Firodia, chairman of Kinetic Engineering Ltd, to bring in Indian private partners for the project.

NAL, the aerospace lab of the Council of Scientific and Industrial Research or CSIR, India’s largest public-funded research agency, aims to begin commercial production of RTA in six years.

The RTA is expected to be at least 30% more fuel-efficient and have half the running cost of currently used 70-100 seat passenger aircraft. “The aircraft has to be fuel-efficient, light, (have) high-tech electronics, short-runway, short-haul (capability), minimum carbon footprint and no noise and (be) comfortable,” CSIR director general Samir Brahmachari said on Thursday. He added that a tender inviting private participation will be floated in 10 days.

M&M and L&T are among the few private Indian firms that have developed aerospace manufacturing capability.

“We are more than qualified,” said Hemant Luthra, a member of the group management board at M&M. “If it (the government) floats the tender for participation, obviously we will be interested. However, we will have to see what is the government looking at from us.”

M.V. Kotwal, director and head of aerospace and defence business at L&T, said his company will also bid. “If we are invited, we will be interested in this...(but) the bids should be competitive.”

In 2008, L&T, M&M and Godrej Industries Ltd had bid to be the production partner for Saras, a 14-seat multi-role aircraft developed by NAL, to gain expertise in aircraft making. But they lost out to state-run military plane maker Hindustan Aeronautics Ltd (HAL).

But the government now wants to bring in private partners at the outset. It has learnt from the experience of Embraer of Brazil, which started as a public-funded programme and emerged as the world’s third largest passenger aircraft maker when it was privatized.

India also sees the growing economy and the boom in civil aviation as an opportunity to build its own aircraft and generate employment. In the late 1990s, HAL had planned to make turboprop planes in India with Italian-French plane maker ATR. The project did not take off due to limited market opportunity. But the expertise it provided helped the Defence Research and Development Organisation and HAL make helicopters, trainer and fighter planes for the Indian military. The experience also aided NAL’s attempts to build the Saras and Hansa, a two-seat plane for flying clubs.

The RTA is also a move to hold on to talent. “The whole population of people who are trained in integration (of these aircraft), if we don’t have a follow-on programme for them in the country, they will all disappear. They will be taken by so many multinationals (setting up centres in India),” said Sumantran.

Acquisition of aerospace capabilities has been slow in the private sector. In December, M&M acquired the capability to build passenger planes when it bought two Australian aerospace firms, Aerostaff Australia and Gippsland Aeronautics. It is also running a five-seat plane development project with NAL.

L&T, which has built ships and submarines for the Navy, makes components and subsystems for overseas plane makers such as Boeing Co. and Airbus SAS.

raghu.k@livemint.com