Govt gives ordnance factories free pass in combat vehicle project

[Water Car Engineer]

In an undisguised favour to the Ordnance Factory Board (OFB), the defence ministry announced on Thursday that, while nine private sector companies would compete to develop the future infantry combat vehicle (FICV), the OFB would be nominated without competing as a third development agency. The FICV project is worth an estimated Rs 50,000 crore.

The ministry’s Expression of Interest (EoI), which invited ten companies on July 16, 2015 to submit proposals to develop the FICV under the “Make” procedure, specified that two development agencies would be chosen. Now, even as that competitive selection continues, the OFB has been given a free pass.

Ministry insiders say this last-minute decision was taken because it was evident the OFB would not be selected in a fair competitive process. To ensure the OFB participates, the rules of the game have been unprecedentedly changed in the middle of the game.

Private company executives who have priced their FICV bids say each company will spend about Rs 1,000 crore in developing the prototype FICV, of which 80 per cent will be reimbursed to them according to the “Make” procedure. By nominating the OFB as a third development agency, the defence ministry is increasing the cost of the project by about Rs 800 crore.

This step is likely to evoke strong objections from the nine private companies in the race --- Larsen & Toubro; Tata Power (Strategic Engineering Division); Tata Motors; Mahindra & Mahindra; Bharat Forge; Pipavav Defence; Rolta India; Punj Lloyd and Titagarh Wagons.

Defence Minister Manohar Parrikar has repeatedly promised, most recently in an interview on November 25, that the private and public defence sectors would compete on a level playing field. Private sector executives point to decisions like this to underline the hollowness of this promise.

Broadsword: Govt gives ordnance factories free pass in combat vehicle project


I have no idea why they cant compete fairly with private firms, oh I know why, cause they'll lose in a fair competition. After getting every god damn contract since independence for armor, small arms, etc, being the only assembler for such armor, etc., they still dont want to fight a fair one, and this government let it happen.

 

[PARIKRAMA]

Solid development...
i think it has 2 implications

1. The pvt sector is being given a very solid chance to come out and perform. This deal could essentially break the tradition and boost confidence of GOI on pvt sector capabilities
2. OFBs would be busy i guess partially with some BMP2 upgrades along with a pvt company. For OFBs upgrading itself will be time and resource consuming,,,