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Participate in defence production, Pranab urges private sector

New Delhi, Oct 24 (IANS) In yet another enunciation of India's new arms purchase policy, Defence Minister Pranab Mukherjee Tuesday said the Integrated Defence Staff Headquarters (HQIDS) would draw up plans for the three services and urged the private sector to participate in the production process.

Tuesday, October 24, 2006 | 5:02:35 PM IST (+05:30 GMT)
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New Delhi, Oct 24 (IANS) In yet another enunciation of India's new arms purchase policy, Defence Minister Pranab Mukherjee Tuesday said the Integrated Defence Staff Headquarters (HQIDS) would draw up plans for the three services and urged the private sector to participate in the production process.

'The plan formulated by HQIDS would cover the span of 15 years envisaged under the Defence Capability Plan. Thereafter, the Long Term Integrated Perspective Plan (LTIPP) would be drawn up taking into account the inputs from the three services,' Mukherjee said while inaugurating a conference on 'DPP (Defence Procurement Policy)-2006 and Make Procedure: Creating Public Private Partnerships in Defence Procurements'.

According to Mukherjee, HQIDS would carry out the feasibility of the projects categoried as 'Make' (manufacture under license or through transfer of technology) under the Defence Capability Plan and undertake feasibility studies for each project. It would then go through several steps, including the preparation of a Project Definition Document by the Integrated Project Management Teams (IPMTs) constituted for the purpose.

He said at the next stage, the IPMTs would invite expressions of interests from all the domestic private and public industries with proven capability to participate in the programme.

'As a matter of rule, at least two production agencies would be short-listed for the development of a system and the final selection would be done by the Defence Production Board. DRDO would also provide the necessary assistance to the industry by providing back-to-back arrangements for conducting research, design or development,' the minister added.

In a departure from the past and to encourage defence private industry under the 'Make' category, the minister announced: 'The government would also make available funds for the project up to 80 percent of the development cost.

'The IPMTs would identify important milestones during the development of prototypes. Funds would be released by the defence ministry to the industry on the recommendations of this body. After the prototype has been developed, IPMTs would carry out the user trials readiness of the prototype before offering it for user trials,' he stated.

'We have also taken care to ensure that we do not penalize a domestic firm that comes forward to meet the challenge of producing state-of-the-art defence equipment. In case the project does not proceed according to the pre-determined milestones and is suffering from time and cost overruns, the project may be foreclosed as per the exit criteria given in the DPR,' Mukherjee pointed out.

Another incentive, he said, was the policy regarding the placement of a minimum order for the equipment being developed. This would ensure that it would be worth the while of the private industry to undertake development and manufacturing of defence equipment for the three services.

Defence Secretary Shekar Dutt said the new procurement policy seeks to put systems in place by which the country is able to obtain reliability of support.

The DRDO, he said, was evolving strategies to involve the private sector in R&D, adding that consortiums were essential between the private and public sector and academic institutions to make production competitive.

Saroj Kumar Poddar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), suggested the adoption of a consortium approach for Strategic,

Copyright : Indo-Asian News Service
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