October 23, 2014

Govt to take call on key defence deals worth Rs 70,000 crore

The government is all set to take a call on two critical but long-delayed projects to plug operational military gaps in conventional diesel-electric submarines and anti-tank guided missiles (ATGMs), which together will cost well upwards of Rs 70,000 crore over the next decade or so.

Defence ministry sources said the two projects would be discussed by the defence acquisitions council (DAC) to be chaired by Arun Jaitley on Saturday. "Though there will be other items on the agenda, including the order for another 12 Dornier aircraft, the submarine and ATGM projects are likely to be the big-ticket ones," said a source.

Both the long-term projects will involve indigenous production with foreign collaboration in tune with PM Narendra Modi's "Make in India" policy. All the six new advanced stealth submarines, armed with both land-attack missile capabilities and air-independent propulsion for greater underwater endurance, will now be built in India, as was first reported by TOI last month.

Similarly, the Army project involves a direct acquisition of around 900 launchers and 3,200 missiles of third-generation ATGMs or "tank-killers", followed by transfer of technology (ToT) to defence PSU Bharat Dynamics for large-scale manufacture. In all, at least 1,914 launchers and 37,860 missiles will be required to equip the Army's 382 infantry battalions and 44 mechanised infantry units.

Significantly, MoD sources said the Army has pitched for the Israeli "Spike" ATGM over the American "Javelin" missile in the DAC. The US has been hard-selling the Javelin in recent months, with defence secretary Chuck Hagel in August offering not only to "co-produce" the ATGMs but also "co-develop" its fourth-generation version with India.

But it was the earlier reluctance of the US for full ToT which led India to consider and extensively test the Israeli Spike ATGM. "The Army feels the latest US offer to co-produce and co-develop the Javelin is not very clear and not likely to meet our ToT requirements. The Israeli Spike, in turn, has already undergone our trials. It's also cheaper than the Javelin," said the source.

The global tender for the Navy's project to build the six new-generation stealth submarines, in turn, is yet to be even floated despite getting "acceptance of necessity" way back in November 2007 due to political apathy and bureaucratic bottlenecks.

The original plan was that the first two submarines would be imported to save time, given the country's rapidly-depleting underwater combat arm, with the next three being constructed at Mazagon Docks (Mumbai) and one at Hindustan Shipyard (Visakhapatnam) with ToT from the foreign company eventually selected.

But with the Navy now agreeing that all the six submarines will be built in India, there is hope for the DAC's quick approval to float the tender or Request for Proposal (RFP). It will, after all, take at least three years to select the foreign collaborator, and another seven to eight years thereafter for the first submarine to roll out in the complex project.
- timesofindia

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