Indian Defense Industry General News and Updates

Ordnance factories unable to meet army's ammunition demand: CAG

The CAG reports loss of Rs 62.10 crore on replacement of defective ammunition by ordinance factories.

Published: 06th December 2019 06:18 PM
1575703586530.png

For representational purposes (Photo: PTI)

NEW DELHI: The ordnance factories, which supply around 80 per cent of its total production items to Indian Army, are unable to meet significant quantity of army's demand for some principal ammunition thus adversely affecting their operational preparedness, exposes Comptroller And Auditor General (CAG) in its report on (Defence Services) Ordnance Factories presented in the Parliament on Friday.

The reports also point that factories achieved the production targets for only 49 per cent of items. It also highlights that the exports by ordinance factories have decreased by 39 per cent in 2017-18 over 2016-17.

The report clearly states, "A significant quantity of army's demand for some principal ammunition items remained outstanding as on March 31, 2018, thus adversely affecting their operational preparedness."

This report contains the results of audit of financial transactions of Ordnance Factories Organisation, under the Department of Defence Production of the Ministry of Defence.

The Ordnance Factories Board received budgetary grant of Rs 14,793 crore and Rs 804 crore in 2017-18 for its revenue expenditure and capital expenditure, respectively.

In 2017-18, it supplied materials of Rs 14,251 crore to its different indentors.

The reports also points the production capacity for empty and filled fuzes, an essential and critical part of ammunition to provide safe and reliable detonation at the desired time and place, was not adequate to meet army's requirement of ammunition.

Filling factories fill empty fuzes with explosives and assemble it with other components to form complete ammunition.

It also stated that there were mismatches in the availability of empty fuze from in-house production as well as from trade sources and their filling capacity in factories.

"Major shortfalls in production were noticed for eight types of empty fuzes mainly due to material constraints and quality problems. This resulted in slippages in issue of related ammunitions and spare filled fuzes to the users leading to critical deficiency of seven types of ammunition," the CAG stated.

Due to non-availability of spare fuzes, Army had stock of ammunitions worth Rs 403.27 crore lying in unusable condition, the report stated.

It also stated that inadequate quality checks both by the factories and quality assurance agencies in manufacturing led to significant quantum of return and rejection of empty fuzes and filled fuzes.

"A total 18 accidents occurred at the users' end relating to six ammunitions mainly because of fuze related defects and problems," the report stated.

Further the ordinance factories could not fulfil the army's requirement of electronic fuzes due to lack of infrastructure and capability.

Army had to order electronic fuzes Rs A1,511 crore during 2013-14 to 2017-18 from Electronic Corporation of India Ltd (ECIL) and Bharat Electronics Ltd (BEL).

The CAG also finds that functioning of e-procurement system, introduced in September 2011, Rules and Procedures stipulated in Procurement Manual of Ordnance Factories were not followed completely in its e-procurement system.

"Transparent bidding could not be ensured as instances of submission of multiple bids from a single machine and use of same Digital Signature Certificate by multiple users were noticed," it stated.

The report also stated that ordnance factories continued their payments and receipts of government money partially through manual method. This is in contravention to the directives of Controller General of Accounts in 2012 for making e-payment and of Controller General of Defence Accounts in 2016 for depositing government receipts into the government Account through e-challan.

The CAG reports loss of Rs 62.10 crore on replacement of defective ammunition by ordinance factories.

Army reported exudation of explosives from ammunition supplied in March, 2009 and March 2010 by Ordnance Factory Badmal within their shelf life.

This was on account of lower set point melting point on TNT than the specified range. Set point value of TNT was not tested at ordinance factories before filling in shells due to absence of such provision in the specification of Controllerate of Quality Assurance.

This led to a loss of Rs 62.10 crore on account of replacement of defective ammunition by the Ordnance Factory.

Ordnance factories unable to meet army's ammunition demand: CAG
 
Programmes Under ‘Make’ Category

The status of the ‘Make’ programmes taken up by Ministry of Defence for Battlefield Management Systems (BMS), Tactical Communication Systems (TCS), Futuristic Infantry Combat Vehicle (FICV) is as under:-

  1. Battlefield Management Systems (BMS). The project has been foreclosed in November, 2018.
  2. Tactical Communication Systems (TCS).Two Development Agencies (DAs) have been shortlisted for prototype development.
  3. Futuristic Infantry Combat Vehicle (FICV). DAs could not be shortlisted as the financial and technical criteria were found to be subjective in selection process.
Since no ‘Make’ project has been sanctioned, the question of investment by private and public defence industry for development of technology for timely delivery of the above projects does not arise.

Defence procurements for the Indian Defence Forces is based on the operational needs and stated requirements to keep the Indian Defence Forces in a state of readiness to meet the entire spectrum of security challenges.

This information was given by Raksha Rajya Mantri Shri Shripad Naik in a written reply to Col. Rajyavardhan Rathore in Lok Sabha today.
 
Last edited:
  • Informative
Reactions: Gautam
Exhibition organized on the sidelines of 33rd Tri-Services Training Commands Conference(TSTCC) :

Do we have a new domestic red dot sight maker ? That would be good news, we are sorely lacking those.
1576259725369.png


Underwater drone :
1576259788172.png
 
Strategic shift: India asks private companies to firm up defence production

Thursday, 12 December 2019
By Ajai Shukla
1576381807745.png

With the defence budget stagnating and the public sector lagging in building weaponry, India needs the private sector to galvanize production.

Since his appointment as defence minister in May, Rajnath Singh and his ministry’s officials have held a flurry of meetings with public and private sector defence companies. In these, the Ministry of Defence (MoD) has urged private firms to “Make in India”, so as to meet the indigenous production targets set out in the Defence Production Policy of 2018 (DPrP 2018). This policy explicitly aims to make India one of the world’s top five defence producers, with an annual turnover of US $26 billion (Rs 185,000 crore; Rs 1.85 trillion), by 2025.

The ambitious targets give India’s aerospace and defence industry just six years to more than double its current annual turnover of Rs 80,000 crore. “For this Indian defence industry needs to grow at the rate of 15 per cent per annum,” Singh told an industry gathering on September 17.

Singh, who expects growth to be driven by the private sector, pointed out that more than half of India’s current annual defence production of Rs 80,000 crore already comes from private manufacturers. Of this, direct orders to private companies account for Rs 16,000 crore. In addition, the public sector outsources about 40 per cent of its production to private firms.

Screenshot (546).png


Theoretically, it should be possible to raise defence production simply by installing more capacity. As the MoD revealed in Parliament on November 27, the order books of the defence ministry’s nine defence public sector undertakings (DPSUs) currently add up to Rs 231,981 crores (Rs 2.32 trillion). Hindustan Aeronautics Ltd (HAL) has production orders in hand for the next three years. Bharat Electronics Ltd (BEL) has orders for four-and-a-half years of production. And Mazagon Dock Ltd, Mumbai (MDL) has orders that will keep it busy for a full decade.

Limited defence budget

However, the problem is not just low production. Given the stagnating defence budget, there is also limited capacity to absorb production. Of this year’s defence allocation of Rs 431,011 crore (Rs 4.31 trillion), half will go on salaries and pensions, leaving only about Rs 180,000 crore (Rs 1.8 trillion) for buying defence equipment. This includes the capital allocation of Rs 108,248 crore (Rs 1.08 trillion) and about Rs 70,000 crore from the revenue allocations. And with over half of this going to overseas vendors for imported weaponry, buying more indigenous equipment requires either an increase in defence allocations, or reduced import dependence – or both.

Screenshot (547).png


But, given the government’s focus on social sector spending, there is little scope for increasing the defence budget. Inclusive of military pensions, this year’s defence allocations account for 15.5 per cent of the government’s expenditure; or 2.04 per cent of the country’s Gross Domestic Product (GDP). In fact, by these parameters, defence spending has steadily fallen over the last three years.

That leaves the defence industry critically dependent on exports for absorbing any rise in production. Recognising this, DPrP 2018 aims to triple defence exports in the next six years, from the current year’s exports of Rs 10,745 crore to $5 billion (Rs 36,000 crore) by 2025. That would sharply increase Indian industry’s share of global defence and aerospace manufacturing from less than 1 per cent currently.

Furthermore, the MoD appears to have reserved “a major share” of defence production for the DPSUs and Ordnance Factories (OFs), leaving the private sector out in the cold. In June, Sanjay Jaju, the ministry’s interface with industry, bluntly warned private firms that they had to either export, or perish. “The capital budget is currently about rupees one lakh crores (Rs 1 trillion). There are certain committed liabilities. Of what remains, a major share goes to the public sector. A small share of the pie goes to the private sector… Not all of you will get orders. We cannot support so many of you”, he said.

Jaju explained that the government was actively promoting defence exports by obtaining entry into three of the four international export control regimes: the Missile Technology Control Regime, Wassenaar Arrangement and the Australia Group. India was also lobbying actively for entry into the fourth: the Nuclear Suppliers Group. He said this global recognition of India as a responsible arms exporter would reduce barriers into foreign markets. Jaju also pointed out that exports create economy of scale, bringing down prices of defence products and making them competitive in the global market.

Indian weapons for the world ?

If Indian weapons platforms have not found global acceptance, at least part of the blame rests on the military’s reluctance to induct indigenous weaponry into its arsenal. The long-delayed induction of the Tejas light fighter into the Indian Air Force (IAF) has triggered international interest in the fighter – Malaysia and at least one other country are evaluating the Tejas. However, the small numbers the IAF has ordered and the piecemeal placement of orders has ensured the Tejas’ price remains high. In contrast, the Pakistan Air Force’s ready acceptance of the Sino-Pakistani JF-17 Thunder fighter and its placement of large production orders have driving down costs, making it attractive to foreign buyers.

Similarly, the Indian military’s delay in ordering the Akash air defence missile and the small numbers ordered, limit its chances in the export market.

The same is true for helicopters, the HTT-40 trainer aircraft and the Pinaka rocket launcher. The navy has failed to order even a single warship from L&T’s state-of-the-art Katupalli Shipyard, into which the company has sunk over Rs 5,000 crore. There are proposals for the foreign ministry to provide lines of credit for buying Indian warships to smaller maritime neighbours, such as Maldives, Seychelles, Mauritius, Myanmar and Sri Lanka. But slow decision-making and slothful execution make India’s defence industry unattractive.

Private sector trajectory

India’s private sector was formally allowed into defence production only in 2001, subject to licensing and a foreign direct investment (FDI) cap of 26 per cent. Over the years, the MoD has eased the process of granting licences and also pared and rationalised the list of products that require defence licences. Yet, defence firms continue to navigate a complex industrial licensing regime, governed by the Industries (Development & Regulation) Act, 1951, the Arms Act, 1959 and Arms Rules, 2016. Licensing applications undergo security vetting by the defence and home ministries before the Department for Promotion of Industry and Internal Trade (DPIIT) clears them.

Given the private sector’s recent entry, DRDO has been practically alone in developing full-fledged weapons platforms – that is multi-system, multi-technology systems such as aircraft, helicopters submarines, tanks, etc. DRDO systems worth, Rs 275,000 crore (Rs 2.75 trillion)have been inducted into service, or are on order. This expertise has taken decades to accumulate, at significant government expense. Figures tabled in Parliament on November 27 indicate the DRDO was allocated Rs 13,501 crore in 2016-17, Rs 15,399 crore in 2017-18, Rs 17,122 crore in 2018-19 and Rs 19,021 crore in the current year. The private sector must develop its capabilities on its own dime.

With the DRDO developing weapons platforms, the private sector has been confined to an ancillary role, supplying systems, sub-systems and components. The DPSU and OF vendor bases count more than 8,000 Micro, Small and Medium Enterprises (MSMEs).

Only now are big private sector firms entering the fray in developing complex weapons platforms. The successful development of the Pinaka multi-barrelled rocket launcher, in which the private sector played the leading role, even if under the DRDO umbrella, is being followed by the development of the Advanced Towed Artillery Gun System (ATAGS), led by the Kalyani and Tata groups. In manufacture, L&T is partnering a Korean group to manufacture the K-9 Vajra self-propelled howitzer in India.

For years, private sector entry into defence production was regulated by “Industrial Licensing” norms. After 2001, numerous private firms, naively anticipating lucrative opportunities in defence production, applied for multiple licenses, even in technology domains where they had no expertise. Anil Ambani’s Reliance Defence Ltd claims to have 35 defence licences “for manufacture of various platforms and products, highest for any Indian company.”

By March this year, the government issued 439 defence licences, covering 264 companies, the MoD told Parliament. But those initial licences have resulted in little production. On February 5, 2018, the MoD told Parliament that only 69 licensed companies had reported commencement of production.

Now, however, licensing norms have been eased. “The Defence Products List… has been revised and most of the components, parts, sub-systems, testing equipment and production equipment have been removed from the list, so as to reduce the entry barriers for the [private] industry, particularly small and medium segment. The initial validity of the industrial licence granted under the IDR Act has been increased from three years to 15 years with a provision to further extend it by three years on a case-to-case basis,” the MoD told Parliament on July 3.

Policy incentives

The MoD faces numerous Parliamentary questions about encouraging indigenous defence manufacture and it has a boilerplate answer. It lists out policy initiatives that include: Giving top-priority in procurement to equipment categorised as “Indigenously Designed, Developed and Manufactured”; increasing to 49 per cent the foreign direct investment (FDI) cap in defence; simplifying the “Make” procedure, which lets industry propose and develop products for the military; launch of a “Technology Development Fund”, and an innovation ecosystem titled Innovations for Defence Excellence (iDEX) that was launched in April 2018.

iDEX aims to engage MSMEs, start-ups, individuals and academia and provide R&D funding for futuristic technologies that could serve Indian defence needs. “Under iDEX, innovative solutions have been successfully identified for 14 problem areas pertaining to national defence requirements. More than 600 start-ups have been engaged in the process and 44 different solutions have been identified,” the MoD told Parliament on July 3, 2019.

The MoD has recognised the need to synergise this plethora of initiatives. On September 5, defence procurement chief Apurva Chandra informed an industry gathering in Delhi that anempowered committee was integrating into a unified, common procedure the disparate acquisition processes such as Make-1, Make-2, iDEX and procurements from the Technology Development Fund.

Private industry also hopes to benefit from simplification of the current Defence Procurement Procedure (DPP 2016), which governs capital procurement; and the current Defence Procurement Manual (DPM 2009), which governs revenue procurement. Chandra revealed that revised versions of both documents would be released by March 2020.

The MoD has also pushed the establishment of two defence industrial corridors, where it will set up defence manufacturing and testing infrastructure and provide incentives to defence industry that sets up production there. One corridor in Tamil Nadu covers the “nodes” of Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli. Another spans Aligarh, Agra, Jhansi, Kanpur, Chitrakoot and Lucknow in Uttar Pradesh.

Finally, there are expectations from the long-delayed Strategic Partner (SP) procurement model that is intended to build manufacturing capabilities in the private sector. In this model, SP companies enter into technology partnerships with overseas vendors to build complex weapons platforms in India. Two SP model procurements – to build naval helicopters and submarines – are making progress. The private sector is watching to see how these play out.

Broadsword: Strategic shift: India asks private companies to firm up defence production
 
  • Like
Reactions: Ashwin
Gautam said:
Strategic shift: India asks private companies to firm up defence production

Thursday, 12 December 2019
By Ajai Shukla
View attachment 11976
With the defence budget stagnating and the public sector lagging in building weaponry, India needs the private sector to galvanize production.

Since his appointment as defence minister in May, Rajnath Singh and his ministry’s officials have held a flurry of meetings with public and private sector defence companies. In these, the Ministry of Defence (MoD) has urged private firms to “Make in India”, so as to meet the indigenous production targets set out in the Defence Production Policy of 2018 (DPrP 2018). This policy explicitly aims to make India one of the world’s top five defence producers, with an annual turnover of US $26 billion (Rs 185,000 crore; Rs 1.85 trillion), by 2025.

The ambitious targets give India’s aerospace and defence industry just six years to more than double its current annual turnover of Rs 80,000 crore. “For this Indian defence industry needs to grow at the rate of 15 per cent per annum,” Singh told an industry gathering on September 17.

Singh, who expects growth to be driven by the private sector, pointed out that more than half of India’s current annual defence production of Rs 80,000 crore already comes from private manufacturers. Of this, direct orders to private companies account for Rs 16,000 crore. In addition, the public sector outsources about 40 per cent of its production to private firms.

View attachment 11975

Theoretically, it should be possible to raise defence production simply by installing more capacity. As the MoD revealed in Parliament on November 27, the order books of the defence ministry’s nine defence public sector undertakings (DPSUs) currently add up to Rs 231,981 crores (Rs 2.32 trillion). Hindustan Aeronautics Ltd (HAL) has production orders in hand for the next three years. Bharat Electronics Ltd (BEL) has orders for four-and-a-half years of production. And Mazagon Dock Ltd, Mumbai (MDL) has orders that will keep it busy for a full decade.

Limited defence budget

However, the problem is not just low production. Given the stagnating defence budget, there is also limited capacity to absorb production. Of this year’s defence allocation of Rs 431,011 crore (Rs 4.31 trillion), half will go on salaries and pensions, leaving only about Rs 180,000 crore (Rs 1.8 trillion) for buying defence equipment. This includes the capital allocation of Rs 108,248 crore (Rs 1.08 trillion) and about Rs 70,000 crore from the revenue allocations. And with over half of this going to overseas vendors for imported weaponry, buying more indigenous equipment requires either an increase in defence allocations, or reduced import dependence – or both.

View attachment 11974

But, given the government’s focus on social sector spending, there is little scope for increasing the defence budget. Inclusive of military pensions, this year’s defence allocations account for 15.5 per cent of the government’s expenditure; or 2.04 per cent of the country’s Gross Domestic Product (GDP). In fact, by these parameters, defence spending has steadily fallen over the last three years.

That leaves the defence industry critically dependent on exports for absorbing any rise in production. Recognising this, DPrP 2018 aims to triple defence exports in the next six years, from the current year’s exports of Rs 10,745 crore to $5 billion (Rs 36,000 crore) by 2025. That would sharply increase Indian industry’s share of global defence and aerospace manufacturing from less than 1 per cent currently.

Furthermore, the MoD appears to have reserved “a major share” of defence production for the DPSUs and Ordnance Factories (OFs), leaving the private sector out in the cold. In June, Sanjay Jaju, the ministry’s interface with industry, bluntly warned private firms that they had to either export, or perish. “The capital budget is currently about rupees one lakh crores (Rs 1 trillion). There are certain committed liabilities. Of what remains, a major share goes to the public sector. A small share of the pie goes to the private sector… Not all of you will get orders. We cannot support so many of you”, he said.

Jaju explained that the government was actively promoting defence exports by obtaining entry into three of the four international export control regimes: the Missile Technology Control Regime, Wassenaar Arrangement and the Australia Group. India was also lobbying actively for entry into the fourth: the Nuclear Suppliers Group. He said this global recognition of India as a responsible arms exporter would reduce barriers into foreign markets. Jaju also pointed out that exports create economy of scale, bringing down prices of defence products and making them competitive in the global market.

Indian weapons for the world ?

If Indian weapons platforms have not found global acceptance, at least part of the blame rests on the military’s reluctance to induct indigenous weaponry into its arsenal. The long-delayed induction of the Tejas light fighter into the Indian Air Force (IAF) has triggered international interest in the fighter – Malaysia and at least one other country are evaluating the Tejas. However, the small numbers the IAF has ordered and the piecemeal placement of orders has ensured the Tejas’ price remains high. In contrast, the Pakistan Air Force’s ready acceptance of the Sino-Pakistani JF-17 Thunder fighter and its placement of large production orders have driving down costs, making it attractive to foreign buyers.

Similarly, the Indian military’s delay in ordering the Akash air defence missile and the small numbers ordered, limit its chances in the export market.

The same is true for helicopters, the HTT-40 trainer aircraft and the Pinaka rocket launcher. The navy has failed to order even a single warship from L&T’s state-of-the-art Katupalli Shipyard, into which the company has sunk over Rs 5,000 crore. There are proposals for the foreign ministry to provide lines of credit for buying Indian warships to smaller maritime neighbours, such as Maldives, Seychelles, Mauritius, Myanmar and Sri Lanka. But slow decision-making and slothful execution make India’s defence industry unattractive.

Private sector trajectory

India’s private sector was formally allowed into defence production only in 2001, subject to licensing and a foreign direct investment (FDI) cap of 26 per cent. Over the years, the MoD has eased the process of granting licences and also pared and rationalised the list of products that require defence licences. Yet, defence firms continue to navigate a complex industrial licensing regime, governed by the Industries (Development & Regulation) Act, 1951, the Arms Act, 1959 and Arms Rules, 2016. Licensing applications undergo security vetting by the defence and home ministries before the Department for Promotion of Industry and Internal Trade (DPIIT) clears them.

Given the private sector’s recent entry, DRDO has been practically alone in developing full-fledged weapons platforms – that is multi-system, multi-technology systems such as aircraft, helicopters submarines, tanks, etc. DRDO systems worth, Rs 275,000 crore (Rs 2.75 trillion)have been inducted into service, or are on order. This expertise has taken decades to accumulate, at significant government expense. Figures tabled in Parliament on November 27 indicate the DRDO was allocated Rs 13,501 crore in 2016-17, Rs 15,399 crore in 2017-18, Rs 17,122 crore in 2018-19 and Rs 19,021 crore in the current year. The private sector must develop its capabilities on its own dime.

With the DRDO developing weapons platforms, the private sector has been confined to an ancillary role, supplying systems, sub-systems and components. The DPSU and OF vendor bases count more than 8,000 Micro, Small and Medium Enterprises (MSMEs).

Only now are big private sector firms entering the fray in developing complex weapons platforms. The successful development of the Pinaka multi-barrelled rocket launcher, in which the private sector played the leading role, even if under the DRDO umbrella, is being followed by the development of the Advanced Towed Artillery Gun System (ATAGS), led by the Kalyani and Tata groups. In manufacture, L&T is partnering a Korean group to manufacture the K-9 Vajra self-propelled howitzer in India.

For years, private sector entry into defence production was regulated by “Industrial Licensing” norms. After 2001, numerous private firms, naively anticipating lucrative opportunities in defence production, applied for multiple licenses, even in technology domains where they had no expertise. Anil Ambani’s Reliance Defence Ltd claims to have 35 defence licences “for manufacture of various platforms and products, highest for any Indian company.”

By March this year, the government issued 439 defence licences, covering 264 companies, the MoD told Parliament. But those initial licences have resulted in little production. On February 5, 2018, the MoD told Parliament that only 69 licensed companies had reported commencement of production.

Now, however, licensing norms have been eased. “The Defence Products List… has been revised and most of the components, parts, sub-systems, testing equipment and production equipment have been removed from the list, so as to reduce the entry barriers for the [private] industry, particularly small and medium segment. The initial validity of the industrial licence granted under the IDR Act has been increased from three years to 15 years with a provision to further extend it by three years on a case-to-case basis,” the MoD told Parliament on July 3.

Policy incentives

The MoD faces numerous Parliamentary questions about encouraging indigenous defence manufacture and it has a boilerplate answer. It lists out policy initiatives that include: Giving top-priority in procurement to equipment categorised as “Indigenously Designed, Developed and Manufactured”; increasing to 49 per cent the foreign direct investment (FDI) cap in defence; simplifying the “Make” procedure, which lets industry propose and develop products for the military; launch of a “Technology Development Fund”, and an innovation ecosystem titled Innovations for Defence Excellence (iDEX) that was launched in April 2018.

iDEX aims to engage MSMEs, start-ups, individuals and academia and provide R&D funding for futuristic technologies that could serve Indian defence needs. “Under iDEX, innovative solutions have been successfully identified for 14 problem areas pertaining to national defence requirements. More than 600 start-ups have been engaged in the process and 44 different solutions have been identified,” the MoD told Parliament on July 3, 2019.

The MoD has recognised the need to synergise this plethora of initiatives. On September 5, defence procurement chief Apurva Chandra informed an industry gathering in Delhi that anempowered committee was integrating into a unified, common procedure the disparate acquisition processes such as Make-1, Make-2, iDEX and procurements from the Technology Development Fund.

Private industry also hopes to benefit from simplification of the current Defence Procurement Procedure (DPP 2016), which governs capital procurement; and the current Defence Procurement Manual (DPM 2009), which governs revenue procurement. Chandra revealed that revised versions of both documents would be released by March 2020.

The MoD has also pushed the establishment of two defence industrial corridors, where it will set up defence manufacturing and testing infrastructure and provide incentives to defence industry that sets up production there. One corridor in Tamil Nadu covers the “nodes” of Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli. Another spans Aligarh, Agra, Jhansi, Kanpur, Chitrakoot and Lucknow in Uttar Pradesh.

Finally, there are expectations from the long-delayed Strategic Partner (SP) procurement model that is intended to build manufacturing capabilities in the private sector. In this model, SP companies enter into technology partnerships with overseas vendors to build complex weapons platforms in India. Two SP model procurements – to build naval helicopters and submarines – are making progress. The private sector is watching to see how these play out.

Broadsword: Strategic shift: India asks private companies to firm up defence production
Click to expand...
A Military Industrial Complex(MIC) would do wonders for the defence industry.
 
The Mahindra Armored Light Specialist Vehicle :


The video says it has completed 18 months of testing with the Army. Which army ? ours ?
I remember this photo of the vehicle being tested at high altitudes. Was the IA involved with the testing ?
1576759714206.png


Some more photos ;

1576759900358.png

1576759923900.png

1576759942655.png

1576759956312.png

1576759976684.png

1576759994733.png

1576760015402.png

1576760036828.png

1576760059803.png


continued.......
 
Last edited:
Something I've been saying for long :

Decide tenders on merit, not cost: Defence manufacturers

By Abhinandan Mishra
Published : December 21, 2019, 6:42 pm

New Delhi: Industry leaders, especially from the defence segment, say that the L1 tendering system, also called Least Cost Selection Method, under which the lowest bidder is given a contract, has become the bane of innovation and the government should replace it with the T1 system. This implies that the manufacturer of a product with the best technology should be given the contract.

The Sunday Guardian spoke to manufacturers of defence equipment who stated that despite having the best of technology and products, they were not getting government contracts because their products did not qualify under the L1 system.

“We produce some of the best border fencing and infiltration detecting systems, but the government does not use them because these are not cheap. If your product is using the best technology, how can it be cheap? If you want the cheapest product, obviously, it will not be the best. Policymakers need to realise this. Some of the fencing that is being currently used at the borders is cheap, but they need to be replaced very frequently as their quality is inferior. In the end the government ends up spending more money in frequently buying inferior goods rather than spending on a comparatively expensive, but maybe a 100 times better product,” a senior executive of a company engaged in manufacturing border fencing products said.

According to industry experts, L1 tendering system is proving to be the bane of research and development. “Very few Indian companies invest in research and development as they have to keep the prices of their products low. If keeping the price of the product cheap is the objective, obviously you will not focus on how to improve your products as that requires investing on sharp minds and better facilities,” added a CEO of a company engaged in manufacturing communication systems related to defence.

The recently held two-day seminar on border management, which was organised by FICCI, experts, industry players and government officials, also focused on the L1 tendering system and how it was not giving the required results and discouraging companies with superior products. “Following the principle of sasta-sundar-tikau (cheap and durable) is not helping anyone,” as a CEO of a defence equipment manufacturing quipped.

Earlier in October, the Chief Vigilance Commission (CVC), while preparing a concept note, which was shared with the government, had stated that the L1 system was holding back India’s development and the time had come to replace it.

According to official sources, the CVC stated that the L1 system should be limited to routine work while it could not be used where the procurement was related to superior systems that were procured once a while.

The concept note said that the bidder with the best technology rarely got the contract as the price offered by it was higher since his products were far superior.

In the note, the CVC has recommended alternative tendering policies such as Quality-cum-Cost Based Selection (QCBS), Quality-Based Selection, Quality-cum-Least Cost Based Selection (QLCBS), Procurement Based on Life Cycle Cost (LCC) and Swiss Challenge (SC) for future procurement.

In the QCBS, more weight, 70:30, is given to the technical credentials of a bidder.

The Quality-Based Method simply focuses on quality and then the price is mutually decided.

Under QLCSB, the bidder is shortlisted on quality and then the price bids of top three or more bidders are opened and the lowest bidder gets the contract.

Under the Life Cycle Cost system, a superior quality product, which requires less maintenance and has higher productivity, is given priority.

Under Swiss Challenge, the private sector proposal initiator submits a suo motu proposal to the government agency for a project. After studying the proposal, the government puts it up for competitive bidding for counter-proposals. If the initiator fails to match the counter-proposal, then it goes to the latter.

Decide tenders on merit, not cost: Defence manufacturers - The Sunday Guardian Live
 
  • Like
  • Agree
Reactions: randomradio and Ashwin
Air Marshal R K S Shera, AVSM, VSM, ADC, Air Officer Commanding in Chief, Maintenance Command, at the Bangalore Complex of BEL. Takes a look at what appears to be the BEL developed MAWS for fighters.

EKlekl-U4AALMVG.jpg
 
  • Informative
Reactions: Ashwin
You must log in or register to reply here.
Top Bottom