August 28, 2015

DAC meet: 5 major defence procurement deals likely to be cleared by Manohar Parrikar

A major defence procurement meeting is on at South Block today. Defence Minster Manohar Parrikar and top officials are expected to discuss a variety of projects, including policy issues on blacklisting and procurement.  Some of the major projects that may get a procurement go ahead today include:

 1. Naval Utility Helicopters: A firm proposal has been moved by the Navy to the ministry of defence that specifies that it requires 110 naval utility helicopters, out of which 94 are  to be made in India in colaboration with a foreign partner.  The valuation of the contract makes it the largest 'Make in India' chopper deal to date, exceeding the Army light utility chopper deal that was given to Russia's Kamov in May and will cost over Rs 5,000 crore. As reported, 11 Indian companies, including Mahindra, Tata, L&T and Reliance, have responded to an initial request for information that was issued by the Navy earlier this year. All offered helicopters to be made in India in partnership with a foreign firm.  Mahindra and Airbus have even announced discussions on the formation of a joint venture. The companies aim to form a joint venture company in the coming months for Make in India chopper contracts in what is speculated to be an exclusive contract for Airbus. 

2. Seven new Akash squadrons for the IAF : The defence ministry is set to clear a Rs 5,000 crore procurement of 'Made in India' Akash missile systems for the air force in a contract that will involve significant private sector participation, with companies like Tata Power SED and Larsen & Toubro likely to get major work portions. An air force plan to induct seven squadrons of the Akash anti-air missile systems has been cleared at several levels and is likely to get a final approval from the high-powered defence acquisition committee shortly, sources told ET some time back. Fourteen firing units of the missile will be bought for the seven squadrons      While state-run Bharat Electronics LtdBSE 1.66 % will be given the main contract under a 'repeat order' - the air force has already contracted for eight squadrons of the missile systems out of which two have been inducted - the major system providers include Electronics Corporation of India, Hindustan Aeronautics, Tata Power SED and L&T, defence ministry officials had told ET.  Induction of the system, which has an indigenous content of 96 per cent will also benefit a number of small and medium scale industries that have been participating in the programme. The Akash programme, which was approved for procurement first in 2010, is a major Make in India initiative with the air force cleared to progressively induct 45 firing units over the next few years.

 3. 6 new Pinaka regiments for the Army: The army is set to get an artillery boost with a proposal being moved to raise six new regiments of the indigenous Pinaka Multi-Launcher Rocket System (MLRS), a formidable system designed to annihilate enemy targets with a blanket of precisely guided rockets. Impressed by the capabilities of the MLRS — the system is capable of flattening a 3.9 sq km area at a range of 40 km in less than a minute — the defence ministry is also moving ahead to increase the capacity of the Ordnance Factory Board to produce the rockets in India. 

4. 48 new Mi 17 choppers for the air force: The Indian Air Force has moved a proposal to spend $1.1 billion (Rs 6,980 crore) to acquire more mediumlift choppers from Russia in a move that would go against the grain of the 'Make in India' concept but offer a vital addition to its transport fleet.  The hardy Mi 17 V5, it seems, will continue to rule the Indian skies as 48 of the choppers are likely to be procured under a repeat order. The new choppers, which will serve in terrains ranging from the desert to high-altitude locations along the China and Pakistan border, will be added to the IAF fleet of 139 Mi 17 V5s that form the backbone of the IAF transport operations.  Sources said the Air Force recently moved the plan that includes maintenance facilities for the choppers as well as an offset obligation of 30 per cent. The operationally proven choppers are much-needed replacements for the older Mi 8 transporters that have reached the end of their service life.  

5. Go ahead for P 75I submarine tenders that will cost Rs 1 lakh crores: The shipbuilding industry is set for mega business with the government deciding to procure diesel electric submarines will be the last order to go to foreign firms and that all future projects will be designed and made in India.  Leading international players, which have for long eyed India as one of the largest importer of submarines in the world, are currently in contention for the P75 I project to manufacture six new stealthy submarines in India.  A top Navy officer had told ET that the government has cleared the project on the condition that all future acquisitions of conventional submarines will be based on an indigenous design and produced at Indian shipyards. 


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