Hawk aircraft assembly line could play bigger role in Saudi Arabia

BAE Systems reported rising sales and profits in the first half of 2017 as it hopes for further orders for its Typhoon fighter jet to Gulf countries. (Reuters)
Updated 03 August 2017
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Hawk aircraft assembly line could play bigger role in Saudi Arabia

LONDON: A Hawk aircraft assembly line established by British defense giant BAE Systems could be used to bring more aircraft manufacturing to Saudi Arabia.
It comes as defense contractors seeking orders in the Kingdom come under increased pressure to contribute to Vision 2030, the economic diversification strategy being driven by Crown Prince Mohammed bin Salman, deputy premier and interior minister.
The world’s third-largest defense company is supplying its latest batch of 22 Hawk training jets to the Kingdom, under a deal agreed two years ago following an earlier order for 18 of the aircraft.
The final assembly of the planes, which are used to train fighter pilots, will be done in Saudi Arabia, with the first deliveries expected in the third quarter of the year.
“As part of the Hawk batch-two contract, we agreed to establish a final assembly line for Hawk in Saudi Arabia,” said BAE Systems’ international managing director, Guy Griffiths.
“I think it would be self-evident that having established that facility and built 22 Hawk aircraft through it, it would be a great shame if it wasn’t then used for final assembly of other aircraft.”
Saudi Arabia is investing heavily in developing its domestic defense industry as the ongoing war in Yemen drives military spending.
At the same time, the Kingdom aims to create skilled jobs in areas such as aeronautical manufacturing.
“This is all driven by Vision 2030,” said Griffiths. “In every negotiation that’s conducted, whether with us or other defense suppliers, a key component beyond the price and specifications of the product is what is the industrial, training, development and technology transfer contribution that goes with this order? It’s probably the most preeminent part of every negotiation.”
BAE Systems this year delivered the final four aircraft of the 72 planes under its Salam Typhoon program in Saudi Arabia.
It also has a Typhoon support program, and agreed an additional 20,000 flying hours under a contract amendment signed in April.
The company said it had also delivered the first two of 12 Typhoons on order to Oman. The remaining deliveries to Oman are scheduled for the second half of 2017 and 2018.
BAE Systems reported an 11 percent rise in first-half earnings of £945 million ($1.25 billion) on Wednesday, beating analyst estimates.
The earnings were the first to be presented by new Chief Executive Charles Woodburn, who took over from Ian King in July.
The former oil industry executive, who worked for Schlumberger for 15 years, served as chief operating officer at BAE Systems for more than a year before taking up his new role.
He said his leadership will be marked by “evolution, not revolution,” adding: “It’s clear we have the right strategy that harnesses our strengths, so we’ll continue to stay the course.”


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.