The FICV : Private sector awaits MoD decision on Rs 50,000 crore contract

[IND151]

Last week, the MoD flagged off India’s first competitive development of a major military system, the high tech Tactical Communications System. Now all eyes are on the second, with the MoD finalizing the two winners in the four-cornered contest to develop a Future Infantry Combat Vehicle (FICV) for the army. While figures are tentative, this is by far India’s biggest-ever land systems contract, the Rs 50-60,000 crore production of 2600 FICVs to replace the army’s venerable Russian BMP-2.

Of the four contestants that submitted proposals to the MoD in Oct 2010 --- Tata Motors; the Mahindra Group; L&T; and the MoD-owned Ordnance Factory Board (OFB) --- the MoD will select two as “Development Agencies,” or DAs, who will each design and build a prototype of the futuristic vehicle. The better one will be selected as the final FICV design, which will go into production.



The MoD is pursuing this project under the “Make” procedure of the Defence Procurement Procedure of 2008 (DPP-2008), under which Indian vendors develop major defence platforms. The MoD funds 80% of the cost of developing a prototype that must be at least 30% indigenous; the Indian DAs pays the remaining 20%.

The FICV will be a tracked, lightly armoured, off-road vehicle that can zoom over sand dunes or across a river. Operated by a three-man crew --- a commander, a driver and a gunner --- it will also carry seven fully equipped infantrymen into battle protecting them while they are aboard from bullets and shrapnel. The FICV’s strike power --- an anti-tank missile; a rapid-fire cannon; a 7.62 mm machine gun; and a grenade launcher --- will enable it to destroy enemy tanks, ICVs, missile carriers, attack helicopters and infantry.[/SIZE]

“The FICV will be a 22-24 tonne vehicle with the strike power of a 45 tonne main battle tank (MBT),” predicts Brigadier (Retd) Khutab Hai, who heads the defence business of the Mahindra Group.

The army’s insistence on an amphibious FICV constitutes a key design challenge. The generals believe an ability to quickly swim across rivers would be a battle-winning ability in the riverine Punjab plains. The BMP-2, its current ICV, is fully amphibious. But not since the Soviet Union days has any army inducted a fully amphibious ICV.

Since Oct 09, when the MoD approved the FICV project, private sector aspirants like the Mahindras, Tata Motors and L&T have put in place the designers and technical facilities needed for developing the complex FICV in the MoD’s tight timeframes. Now there is concern that, 20 months after submitting their project proposals to the MoD in Oct 2010, the winning proposals have not yet been announced. According to the MoD’s own timelines, this evaluation should have been completed in 8 months.

“The Mahindra Group has invested Rs 30 crore in putting together our FICV team. For two years, we have trained our people, working with our technology partners, BAE Systems, in Sweden; and Rafael in Israel. We are looking for an early decision from the MoD. Keeping this team idle costs us money,” says Brig Hai.

Business Standard visited the Mahindra Group’s facility in Palwal, Haryana, where its joint venture company, Defence Land Systems India (Mahindra, 74%: BAE Systems 26%), has set up a high-tech Systems Integration Laboratory that will spearhead the FICV design process.

L&T, too, hopes for an early decision. It has set up a design facility at Talegaon, and tied up with technology partners like CMI of Belgium. Interestingly, L&T is looking to Indian company, Ashok Leyland, to play a role in the automotive aspects of the FICV. “L&T’s design strengths are well known. Many hours of skilled engineering have gone into the innovative design that we have presented to the MoD,” says MV Kotwal, L&T’s heavy engineering chief.

Meanwhile, uncertainty clouds the Tata’s proposal, which has German giant, Rheinmetall, as a technology partner. MoD sources say that at least one of Tata’s rivals has objected, pointing out that the CBI is investigating Rheinmetall Air Defence for allegedly bribing former Ordnance Factory Board chairman, Sudipta Ghosh. It is unclear whether the MoD’s delay in finalising the DAs for the FICV is related to this.

The MoD has not responded to an emailed query from Business Standard on this question?

The MoD says that programmes like the FICV, under the “Make” category of the DPP, will be key to developing India’s private defence industry. Vivek Rae, the MoD’s procurement chief, stated during the Defexpo 2012 international defence exhibition in New Delhi in March, that the MoD would soon announce many more “Make” projects.

“There will be a list of 150-180 ‘Make’ projects that (the MoD) will put on the web. With Indian companies tying up with one another and competing, I think we could energise the industrial base of the country. The sheer act of design and development, sharing of risks and sharing of costs (in an 80:20 ratio) will be a very significant move forward,” said Rae.

http://ajaishukla.blogspot.in/2012/06/future-infantry-combat-vehicle-ficv.html

 

[keerthan]

MOD should not keep pvt firms waitiong for so much long time becoz they will be suffering huge losses due to delay in finalizing the project two "Development Agencies".
it will help in pvt firms taking more major part in our indigenious efforts of armed forces

 

[IND151]

^^ you hit nail

 

[xataxsata]

US$ 10 billion of project for Indian companies

MoD should raised the number of FICV to be around 4000.

 

[GR!FF!N]

what kind of "Rapid fire Canon" army wants??do they want 125mm canon or smaller 105 mm one???or much smaller than that???it looks like it is going to be similar type of FICV just like BMP-3.

 

[Rajaraja Chola]

US$ 10 billion of project for Indian companies

MoD should raised the number of FICV to be around 4000.

Mate first ask them to announce the winners and we can approve the project...
We can even build 10000 FICV... But it has to be announced soon.......

 

[sancho]

The army’s insistence on an amphibious FICV constitutes a key design challenge. The generals believe an ability to quickly swim across rivers would be a battle-winning ability in the riverine Punjab plains. The BMP-2, its current ICV, is fully amphibious. But not since the Soviet Union days has any army inducted a fully amphibious ICV.

Very interesting point, which could be a crucial factor since no all vehicles will have this capability and although it's an Ajay Shulka report, his IA related infos are more reliable than IAFs.

 

[Bhai Zakir]

Very good development

 

[karan21]

l&t and tata can definitely do it, not sure about mahindra. they build kk cars but have never built much for defence force or are not into heavy engineering.

 

[Perpendicular]

Tata group is banking on winning the Rs 60,000-crore project to design and build a Fighting Infantry Combat Vehicle (FICV) under Make in India in Defence to bring more than a dozen group companies together. Tata Motors is one of the ten contenders — L&T, Tata Power (SED), Tata Motors, Mahindra & Mahindra, Bharat Forge, Pipavav Defence, Rolta India, Punj Lloyd, Titagarh Wagons, and the Ordnance Factory Board (OFB) — for the FICV programme, who have been issued an expression of interest (EOI) by the defence ministry.

These firms have been asked to submit proposals by January 15, 2016 to build the FICV, a tracked, armoured battle-taxi, which will be operated by three crewmembers and carry eight combat soldiers into battle. As per the EoI, the FICV must be air-portable by IL-76 and C-17 aircraft, and fire anti-tank guided missiles up to 4,000 metres.

From the bidders, two firms will be selected to design and develop separate FICVs, which will be reimbursed 80 per cent of their costs by the defence ministry. Out of the two FICVs developed, one will be selected for mass-production to replace the army’s fleet of obsolete 2,610 Russian BMP-2 carriers.

According to Dr Mukund Rajan, Tata brand custodian and group spokesperson, the group has identified defence and aerospace as one of the four clusters under which Tata companies will work collaboratively and tap synergies. Tata Motors has a clear mandate from the Tata Group to be the lead bidder and integrator on the FICV programme.

“Our large presence in the defence and aerospace sector is an outcome of the legacy bequeathed by Ratan N Tata. The relationships he encouraged the group to strike with global majors, and the capabilities he inspired the group to create, are now being leveraged further by bringing the various Tata companies together,” Rajan said.

While Tata Motors will be the lead systems integrator and mobility systems provider, Tata Advanced Systems Limited will work on mission electronics and high technology absorption of electronics, Tata Power SED on systems and weapon integration, Tata Advanced Material Limited on armour manufacturing and integration, TAL Manufacturing Limited on heavy fabrication and hull manufacturing, Titan on precision engineering, and other companies like Tata Technologies and Tata Consultancy services will bring on board their expertise in engineering and programme management.

The EOI lays down four parameters for evaluation of the bidding companies – financial, technical capability, critical technology and technical Specification. The EOI also lays clear rejection criteria, which are solely related to product competence. After vetting the parameters, industry sources assess that L&T, Tatas, Mahindras and OFB are the only serious contenders for the bid.

Tata Motors believes that having successfully demonstrated its capability on Armoured Mobility platforms through the Wheeled Infantry Combat Vehicle, the Tata Motors WhAP-Kestrel, it will be a front-runner for the FICV programme. The Wheeled Amphibious Platform (WhAP) was developed as a public-private partnership project by the DRDO, Indian army and Tata Motors, and has undergone all required mobility, flotation and firing trials at DRDO. Defence Minister Manohar Parrikar was also given a demonstration of the capabilities of WhAP during his visit to ARDE, Pune last month.

“That FICV is mobility oriented is established by the fact that 3 of the 5 core technologies and 19 of 34 critical technologies are mobility related, such as engine, transmission and running gear which are core to Tata Motors. We are today the only player with demonstrated experience of integrating key technologies needed in Armoured mobility segment. With around 14 Tata companies engaged in providing cutting edge solutions in the defence and aerospace sector, the group has the capability and ability to deliver on the FICV programme,” Tata Group told The Indian Express.

In October, defence ministry had issued a note to the ten FICV contenders stating that domestic operation alone would count whilst evaluating a company’s commercial eligibility and strength — a key determinant for who will win the FICV project. This had raised questions about profits from Tata’s UK-based subsidiary Jaguar Land Rover (JLR), which underpin Tata Motors’ consolidated turnover of Rs 2,63,695 crore and a net profit of Rs 13,986 crore last year. Tata Motors’ domestic operations had shown a turnover of

just Rs 38,176 crore and a net loss of Rs 4,739 crore last year.

However Tata Motors says that “the defence ministry’s Integrated Project Management Team has clarified that the wholly owned subsidiaries of the EOI holder having manufacturing presence in India can be included in the financials. With JLR being a manufacturing entity in India and a wholly owned subsidiary, Tata Motors is doubly confident of its position as the front runner for the selection as a Development Agency for FICV”.

Tata group is also buoyed by the statement of former DRDO chief and Niti Aayog member, Dr VK Saraswat who said on September 25, that as Tata Motors had already developed an Infantry Combat Vehicle, there should not be any requirements for it to competitively bid again to continue to progress in that family of platforms.