Army’s $2-B Ammunition Program Faces Delays

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Army’s $2-B Ammunition Program Faces Delays
Army’s $2-B Ammunition Program Faces Delays

Defence Ministry yet to issue clarifications on the ‘Request for Proposal’ to leading players

by Nayanima Basu

The much-awaited $2-billion ammunition program of the Indian Army is facing inordinate delays as the Defence Ministry is yet to issue a revised Request for Proposal (RFP) to leading players eyeing the deal.

The Defence Ministry issued multiple RFPs, which is the second stage in the procurement process involving financial evaluation of the bidders, to Indian industry in March. Subsequently, a pre-bid meeting was scheduled in May to answer queries raised by the industry.

“The OEMs and Indian partners have sought a number of legitimate clarifications during the pre-bid meeting because the RFP had a number of flaws in it. As a result, the Defence Ministry was to issue a clarification in a few weeks. However, these clarifications are yet to be issued and delaying the project further,” a top executive of a defence firm told BusinessLine.

Some of the leading Indian defence firms competing for the deal are TATA Power SED, TATA Advance Systems Ltd., Bharat Forge, Reliance Defence, Larsen & Toubro and Mahindra Defence.

“In all probability, this is program is likely to spill over to the next year as the vendors will require at least 60 days for preparing the bid for multiple RFPs. In effect, a simple process of seeking clarifications by the vendors has impacted the procurement process by a delay of nearly one year,” the executive added.

The RFP was issued for the production of a range of ammunition ranging from artillery rockets, tank ammunition, grenades for infantry weapons and charge systems, among other items. The project involves ammunitions that are of critical nature to maintain the operational preparedness of the Land forces.

One of the main reasons why the Defence Ministry sought private sector participation in this program under the ‘Make in India’ scheme is because efforts at indigenisation through the Ordinance Factory Boards, or OFBs, did not take off as expected creating massive deficiencies in the stocking as per the laid down scales of war wastage reserves, sources said.

Deadline Postponed

The last date for submission of the RFP has so far been postponed six times and it is now expected to be done by December 11 as against the original bid submission date of June 2. However, delay in issuing a revised RFP may shift the deadline once again, sources added.

Some of the OEMs that are seeking partnerships with Indian companies for the deal are Yugoimport-SDPR (Serbia), Nexter Group (France), Rheinmetall (Germany), Arsenal (Bulgaria), Rosoboronexport (Russia), Fuchs Electronics (South Africa) and Israeli firms.