DAC approves defence procurement worth Rs. 3,500 crore

In the face of kickback allegations in the 12 VVIP and 197 Light Utility helicopters deal, the Defence Acquisition Council (DAC) on Monday gave green signal to defence purchases worth Rs. 3,500 crore including night vision devices for the Army and underwater Special Operations Vessels for the navy.

During the DAC meeting, attended by the newly inducted Minister of State for Defence Jitendra Singh and DG Acquisition SB Agnihotri, Defence Minister AK Antony also sent a strong message to the armed forces to be extra cautious while carrying out the procurement processes. Obliquely hinting at the media reports on two helicopter deals with Italy coming under scanner, Antony said: “The competition is stiff nowadays among the different competitors and we need to be very careful.”

However, the DAC did not take up the issue of 197 helicotpers.

The 1.1 million-strong Indian Army has been suffering from acute “night blindness” in the face of the shortage of night vision devices for its foot soldiers. The DAC’s approval is a small step towards addressing the issue of “night blindness” – the 1.1 million strong Indian Army is suffering from.  

“The DAC has approved purchase of 2500 units of handheld thermal imagers valuing around Rs. 800 crore,” sources said. The Army had been pushing for the deal for a long time now.

Some of foot soldiers of Indian Army have been equipped with hand-held thermal imagers,  long-range reconnaissance and observation systems and battlefield surveillance radars (LORROS), either procured from countries like Israel and France or manufactured indigenously by defence PSU Bharat Electronics Ltd (BEL). ''But many more are needed. We would, for instance, like two LORROS units in every battalion. Most of the night-vision equipment held by us is actually second-generation, not like the third-generation devices deployed by countries like US, Russia, France, UK, China and others,'' said an Army officer.

The acquisition process is so slow and infantrymen are experience operational difficulties in night missions. The night sights on its light machine guns, for example, are so power ineffective that their batteries drain out within two hours. 

Along with this another important clearance has been for the construction of two underwater special operations vessel at Hindustan Shipyard Ltd (HSL) under a project of Rs. 1,700 crore. During the 90 minute meeting, the DAC also approved construction of a cadet training ship at the cost of Rs. 480 crore at ABG Shipyard, sources said.

Antony throws weight behind indigenous artillery programme

Defence Minister AK Antony on Monday announced that the Defence Acquisition Council (DAC) recently gave an approval to the construction of 144 upgraded 155 mm artillery guns by Ordnance Factory Board Jabalpur.

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The Defence Minister has thrown his weight behind the indigenous artillery programme just like the indigenous Main Battle Tank Arjun. Speaking on the sidelines of a DRDO award function, Antony said: "I hope after 30 years it proves to be a success. After MBT Arjun we are working towards making the artillery a success."

The .52 guns will be manufactured on the basis of the design transferred by the Bofors in 1986. The designs have since then been gathering dust owing to the taint on these Swedish gun.

The user trials will take place in December. 

The indigenous artillery programme is crucial for the Indian Army which has not been able to induct a single gun since Bofors scandal. While the artillery wing of the Army is in dire need of modernisation, the repeated blacklisting of foreign gun-makers has only added to force's woes.

IAF to give chance to private players in aircraft manufacturing

 

For the first time going beyond the domestic aerospace major Hindustan Aeronautics Ltd (HAL) and to give impetus to domestic aviation industry, the Defence Ministry on Monday decided to opt for a foreign vendor that can partner with even private players to manufacture 56 transport aircraft.

 

The decision was cleared at the Defence Acquisition Council (DAC) meeting chaired by Defence Minister AK Antony. The decision will help the Indian Air Force (IAF) to explore options beyond the over-burdened public sector undertaking HAL that has long been facing complaints of delays and quality control issues.

According to sources, “A tender for the acquisition of these 56 aircraft will soon be issued. As per the tender provisions it will be mandatory for the foreign vendors to select an Indian partner from public or private sector.” The tender valuing around Rs. 12,000 crore will be issued under ‘Buy and Make India’ category of the Defence Procurement Procedures.

As per the proposal approved by the DAC, 16 of these aircraft will be purchased in fly-away condition from the foreign vendor, the next 16 will have 30 percent indigenous components and the last 24 will be 60 percent indigenized. The first of the 56 aircraft set to replace the Avro transport aircraft in the IAF will be delivered four years after the signing of the contract.

The decision has opened doors for private sector players like Tata, Mahindra and Reliance, which can form a consortium with the foreign vendors. The IAF has been keen on giving a chance to the private players to develop an alternative to the HAL.

In the recent times, the government has also taken cognizance of the IAF’s complaints regarding the delayed delivery of equipment by the HAL.  There have been delays in some projects like the Advanced Jet Trainers (AJT) Hawk; delay in establishing the facilities for complex engine components and radar software in respect of SU-30 MKI fighter jets, delay in certification of Shakti engine by the Original Equipment Manufacturer in respect of Advanced Light Helicopter (ALH), changes in Standard of Preparation (SOP) in respect of indigenous Light Combat Aircraft (LCA) and delay in development of engine for Intermediate Jet Trainer.

India to float RFP for 56 transporters to replace Avros

To give a boost to manufacturing of transport aircraft in the country, the Defence Acquisition Council today gave a green signal for acquisition of 56 transport aircraft to replace Avro aircraft. RfP will be issued under 'Buy and Make' Indian to foreign vendors. The RfP will make it mandatory for them to select an Indian partner from public or private sector. Sixteen of these will be obtained in flyway condition. The next 16 will have 30 percent indigenous components and last 24 will have 60 percent indigenisation. 

The first of the aircraft will be delivered four years after signing of the deal.

Tatra fall out: PSU loses status of Most Favoured Suppliers

In an important fallout of the public sector undertaking Bharat Earth Movers Ltd  (BEML) selling "over-priced" Tatra trucks to the Indian Army, Defence Minister AK Antony has instructed the three service Chiefs that PSU's shall not be the preferred in awarding defence contracts.

Antony had told this to Admiral Nirmal Verma, Air Chief Marshal NAK Browne and General Bikram Singh during the Defence Acquisition Council (DAC) meeting at South Block on Friday.

According to sources while underlining the importance of "indigenisation", the Defence Minister said: "awarding contracts on nomination basis to the PSU's will be discouraged. Greater competition will be infused gradually."

Reiterating his commitment to "transparency" in the defence procurement, Antony told the DAC which decides what needs to be purchased and in what quantity for the armed forces said that the open tenders should be the norm in defence procurement unless situation demands urgency.

"Unless it (procurement) is operationally very important nomination should be discouraged," sources added.

This is a big news for the private players in the defence sector who have been demanding a level playing field in comparison to the Public Sector defence majors who have the advantage of sustained funding and captive buyers. In Antony's words, "The private players will be given level-playing field gradually. So that they do not complain in future," sources added.

Procurement worth Rs. 20,000 crore cleared by DAC

In a major boost to the aging Air Defence of the Indian Army, the Defence Acquisition Council (DAC) on Thursday cleared the procurement of three regiments of Quick Reaction Surface to Air Missiles (QRSAMs). The Indian Army will be floating tenders to replace its obsolete Russian Kvadrat missile systems. (The three units will be inducted in the 12th five year plan, while the rest five units will be inducted in the next five year plan).

The focus on the obsolete air defence came following the leak of the confidential letter written by former Indian Army Chief General VK Singh in March. The letter pointed out that 97 percent of the Air Defence of the force has become obsolete. 

Various other procurements were considered during the 2 hour-long marathon meeting attended by the three Defence Minister, Minister of State for Defence, Service Chiefs and Defence Secretary. Other projects cleared include-

1. Procurement of 14 Dornier aircraft of the Indian Air Force from public sector undertaking Hindustan Aeronautics Ltd (HAL) valuing around Rs. 1,000 crore

2. After the success of the pilot project of the Air Force Network (AFNET), plans to implement it across the country was also approved at the cost of Rs 7000 crore

3. Proposals of the Navy and the Coast Guard to procure 116 30 mm surface guns for their warships were also approved.