Indian Vehicle Program Hits Hurdle Over Company Selections

NEW DELHI — India's Make (India) defence programme - $11 billion Future Infantry Combat Vehicle (FICV) program faces hurdles could go into a limbo after objections by resulting in delays as private sector domestic companies objected to the Defence Ministry's are opposing early January decision of the Ministry of Defence (MoD) to nomination of state-owned Ordnance Factory Board (OFB) as one of the program's Development Agencies (DA). (DA).

The other DA's will be selected from among more than half a dozen competing private sector defense companies, competing for the project and the MoD has extended the date of filing their bids to Feb. 16. 2016.

Under the Make India category, two DA's would are proposed to be selected and the government would will fund up to 80 percent of in the prototypes. of the product. After trials, one of the DA's would be will be selected and asked to produce the FICV.

When asked if the private sector companies endorse the nomination of recent decision of MoD to nominate state owned OFB, Rajinder Bhatia, Chief Executive Officer (CEO ) of Bharat Forge, one of the competitors, which is in the competition said, "No comment. We hope this one-time exception and nomination would be discontinued as promised by the MoD."

However, an executive of another competitor openly disapproved of was forthright in disapproving MoD's decision to nominate state-owned companies.

"The new players would contest that this short-listing of one vendor (OFB) was announced after the expression of interest [EOI] (EOI was published, which did not have this qualification criteria. This constitutes a change, more like an after-thought. This ground is sufficient for retraction of the EOI," said an executive of Tata Group. without being named.

Another senior executive of a domestic private sector company, also which is in the race, said there is confusion whether OFB will be a third DA in addition to the two more DA's to be selected from the competing private sector defense companies.

Bhatia said the impression being given to the industry and EOI recipients is that OFB will be the third DA.

In addition, selection of OFB by Besides, the move to select OFB on nomination basis goes against the purpose of the Make India policy, which proposes to give a boost to the domestic defense company.

The EOIs for FICV were issued to private sector domestic private major Mahindra; Bharat Forge; Larsen & Toubro; Punj Lloyd; Tata Power; Tata Motors; Pipavav Defence; Rolta India; and Titagarh Wagons. ; and OFB. The second DA will now have to be selected from these private sector companies.

The FICV has failed to kick start and the project has struggled remained on the files since it was conceived nearly seven years ago and it is likely that the project may not ever take off in the Make India category, said an Indian Army official.

The Indian Army requires the FICV to which will have a n expected life span of 32 years. The vehicle should be tracked and Some of the essential parameters warrant that the FICV should be Tracked vehicle, have amphibious capability with full combat load. It The FICV will ultimately replace the existing Russian-made BMP-2 infantry combat vehicles. with the Indian Army.

The commercial strength of the private sector defense company is given tops the priority over technical ability, according to the criteria formulated by the MoD. to select a DA.

"Repeating the same criteria for final selection is a faulty method and only places emphasis on size of the company and the defense contracts executed earlier, even if such contracts have little in common with the FICV." says Khutub Hai , retired Indian Army Brigadier and managing director of Firmbase Consulting 

Since commercial and technical criteria account for more than 60 percent of the assessment, weight age has been given to commercial and technical criteria, Hai said, "only two or three large companies will qualify all the time."

Meantime, the Indian Army has pressed to upgrade already pressed the upgrade of the existing BMP-2 infantry combat vehicles, ensuring against the delayed FICV project. The Indian Army wants to upgrade these vehicles so they can remain in operation post-that their deployment can be made post 2017.

The Indian Army wants to upgrade these vehicles so they can remain in operation post that their deployment can be made post 2017.so that it remains in operation.