Sitharaman's weapons procurement committee mired in delays

Ministry officials object to including private consultants in committee

By Ajai Shukla

Business Standard, 4th April 18

Two months ago, Defence Minister Nirmala Sitharaman set up a 13-member committee to review critical weapons procurements and identify why they were facing delays. Today, that committee itself is mired in delay.

The ministry’s February 7 announcement constituting the Raksha Mantri’s Advisory Committee on Ministry of Defence Capital Projects (RMCOMP) charged it with presenting an “initial status report” to Sitharaman by March 31. But the convening letter for the committee is still to be signed.

The delay is caused by objections from officials at the inclusion of two private sector consultants – one from EY and the other from KPMG – in the committee. The officials object to private consultants learning procurement details of secret defence equipment.

Officials further object to what they call a “conflict of interest” in allowing private sector consultancies access to procurement information, since the consultancies also offer services to defence firms involved in many of the delayed projects.

The officials demand that R Anand from EY, and Amber Dubey from KPMG, should be removed from the committee. The other 11 members are all serving or former government employees.

The RMCOMP announcement stated that Vinay Sheel Oberoi, the recently retired secretary for higher education would chair it. Other prominent members include former Hindustan Aeronautics chief, RK Tyagi; defence accounts secretary, Sanhita Kar, Rear Admiral (Retired) Sudhir Pillai and representatives from the army, navy and air force.

Sources familiar with these developments express surprise that Sitharaman has allowed herself to get into such a position, associating her person and office with a high-profile announcement that has now been blocked by her own officials.

“It did not take much foresight to see that the RMCOMP would unearth numerous cases of technological incompetence and flawed project management. There are numerous vested interests within the establishment that would like to block such a committee”, said a top defence industry executive.

The source points out that the RMCOMP is an externally-staffed body that will probe defence ministry procurement actions. From the perspective of defence ministry officials, this underlines Sitharaman’s lack of confidence in them.

Another insider also blames Sitharaman’s “penchant for publicity”, which led to a “premature announcement” that is now being walked away from.

Contacted for confirmation and comments, the defence ministry has not responded.

The RMCOMP’s formal mandate is to: “Undertake independent review and status check of identified ongoing critical capital projects above Rs 500 crore (Rs 5 billion).”

These include procurements in multiple categories of the Defence Procurement Procedure, including “Mission Mode” projects, “Make” and “Buy (Indian)” projects, and the new premier category of “Indian Designed, Developed and Manufactured (IDDM)” projects. 

Projects that the RMCOMP would examine would include the Tejas light fighter, Arjun tank, Future Infantry Combat Vehicle (FICV), Advanced Towed Artillery Gun System (ATAGS), Pinaka rocket launcher and numerous others.

The RMCOMP is required to: “Assess the physical and financial progress of these schemes/projects… Identify specific bottlenecks and concerns that are responsible for delays, wherever applicable, and suggest the way forward.”

It is required to “Suggest modern management concepts that can be leveraged to reduce delays… [and] actionable measures to improve the capital acquisition process/procedures.”

The committee has a tenure till end-August 2018, and was required to submit an initial status report to Sitharaman by March 31. Based on “the decisions on the status report”, the RMCOMP is required to submit “two follow-up corrective Action Taken Reports” by April 30 and July 31 respectively.

All these timelines are likely to be reworked, say defence ministry sources.