By Ajai Shukla
Business Standard, 13th March 18
In the government’s first high-level
interaction with private firms on the plan to tender Rs 17,000 crore worth of
ammunition with the private sector, Defence Minister Nirmala Sitharaman was
careful to placate the defence ministry-owned Ordnance Factory Board (OFB) and
defence public sector undertakings (DPSUs), which have traditionally
monopolised ammunition manufacture.
Addressing a Ficci-organised seminar in
Delhi on Monday, Sitharaman pointedly said that OFs and DPSUs have “immense opportunities
and immense assets”, with which they can meet most of the military’s
requirements.
“However, they need revitalising, they need
re-energising, they need to be dynamic”, she added.
Private sector firms looking at winning a
piece of this lucrative order – there are 37 private companies with defence
production licences – are eagerly awaiting a final corrigendum to the tender
(called Request for Proposals, or RFP) that the ministry floated a year ago.
The tender relates to 21 different types of
ammunition in eight broad categories including small arms, Pinaka rockets and
tank and artillery ammunition.
Seven corrigenda have already been issued
in December-January. A final one would be issued “within a month”, said
Lieutenant General Giri Raj Singh, the army’s top ammunition stockholder. A
month after that, tenders are likely to be opened.
Sitharaman pointed out that the ministry
had given the go-ahead for commencing the procurement of 8.6 lakh small arms
for the infantry. That category includes assault rifles, carbines and light
machine guns.
“This entire quantity has been earmarked
for Indian industry, excluding OFB”, she said.
The ammunition order is linked directly with
the small arms acquisition, for which the army will need a large amount of 7.62
millimetre bullets, not just to use but to build up the mandated stocks needed
for a 40-day intense war.
For three decades, the army has been using
smaller 5.56 millimetre bullets, fired from the OFB-built INSAS rifle. But, as
Major General Ajay Ohri of the infantry directorate explained to industrialists,
the smaller bullet had proven insufficient to stop militants in Kashmir, even
after they had been shot twice or thrice.
That is why the army is returning to the
larger 7.62 millimetre assault rifle, especially for frontline infantry
soldiers.
However, private firms worry that the OFB
will enjoy an advantage in bidding against them for the small arms ammunition
order. 25 per cent of that order is “nominated” to the OFB, which is also
permitted to bid competitively for the remaining 75 per cent.
Private firm executives complain, off the
record, that the financial buffer obtained from an assured 25 per cent of the
order would allow the OFB to underbid for the remaining 75 per cent.
Long criticised for inefficiency and costly
production, the OFB is exiting production in 275 “non-core” areas, which
include clothing, boots and webbing equipment. However, the defence ministry,
which owns the 41 ordnance factories, is bound by procurement regulations to
first buy the OFB’s entire production in “core areas” like ammunition and
weaponry before turning to the private sector, or to import.
Shifting to 5.56 mm calibre based on NATO think tank policy recommendations that small calibre injures prompting deployment of additional manpower to evacuate the injured, was daft and silly in the extreme, NATO countries have money and the need to keep and fund some quantity of idiotic day dreamers who were probably imagining a 20th century western front on the lines of world war 1. The problem starts when this type of kite flying finds foothold among our perspective planning personnel who are there for a short time, are expected to produce quality papers based on International inputs and being high flyers move on to greener pastures and the institution suffers for decades
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