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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 as 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 ‘multipurpose 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. More recently, the Indian Navy became the first service to benefit from the Lease category with induction of two General Atomics Sea Guardian, under the emergency procurement in November 2020.

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, be it wet, dry, damp, 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. For example, the Beechcraft King Air 350 has an endurance of about 12 hours, can do speeds of more than 260 knots and has a RoA of nearly 2,300 NM. Sophisticated bespoke maritime sensor suites can be integrated and operated by upto 4 specialised observers. This is a marked improvement in capability. It is also worth noting that pre-owned KingAir350 or the Twin Otter are available, and they can be converted to a MPA version.

So far as helicopters are concerned the options include refurbished preowned ‘commercial’ AS 365 N3, AW 109, SH 70 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 by the Indian Armed Forces.

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 400500 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 any further 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.

Similarly, for the Indian Navy leasing of Utility Helicopters, suitable reconfigured for ISR and SAR roles, could be a useful stop gap arrangement until the NUH under the strategic partnership model commences deliveries. These ‘lease’ assets could be embarked on the soon to be inducted Vikrant, since blade folding may be a challenge for operations from small decks.

Leasing of Fighters for the IAF and the IN, primarily to build the training and consolidation skills could be an option until the SP for Fighters is operationalised. Of course, the MRTT under lease is already under discussion but it may well be possible to lease SPARTAN27J, as part of the EDA in the USG, to meet stop gap requirements until the C-295 flies in Indian skies.

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 national security – a dire need of the nation in the current and forecast security situation.

The author is a Policy Professional working on Aerospace and Defence sector and Export Controls issues at the Federation of Indian Chamber of Commerce and Industries. All views expressed are personal.