Monday, 22 October 2012

Setback for private defence industry. The future of the Future ICV project looks gloomy



MoD might re-tender ambitious Future Infantry Combat Vehicle project, 2 years after calling for and getting bids

By Ajai Shukla
Business Standard, 22nd Oct 12

The private sector’s much tom-tommed opening into defence production, via the Future Infantry Combat Vehicle (FICV), intended to replace the army’s 2,600 BMP-2s at an estimated cost of Rs 50,000 crore, faces an uncertain future. The defence ministry (MoD) is contemplating scrapping the current tender and restarting anew. This comes after sitting for two years on the FICV proposals from three private sector consortia and one public sector entity.

In early 2010, the MoD invited Tata Motors, the Mahindra Group, Larsen & Toubro and the MoD-owned Ordnance Factory Board (OFB) to submit proposals to develop an FICV, a lightly armoured vehicle that carries infantry into battle alongside tank columns. After evaluating the four proposals, the MoD was to short-list two “development partners” who would then compete to develop a prototype each. The better of the two would be selected for the army.

But the MoD’s Acquisitions Wing, which must make the short list, now complains that the tender (called an Expression of Interest, or EoI) did not define the criteria by which the winners would be selected. It wants a fresh EoI to be issued, with the criteria specified.

The wing cites the Defence Procurement Procedure (DPP) of 2008, where Para 22 of the “Make” category, covering the FICV project, says: “The EoI should also lay down the broad parameters of the evaluation process and acceptance criterion for the system under development.”

But the MoD brass realises that cancelling the EoI (drawn up in the ministry) and going back to 2010 would involve a serious loss of credibility. Besides, the “Make” category itself outlines the acceptance criteria, specifying that, “the contribution of the Indian industry in the critical technology areas should be the key criterion in assessment of various proposals.”

The three private sector companies worry that restarting afresh would result in the loss of at least 18 months to two years, as the MoD prepares a new EoI and then goes through a fresh evaluation process. Meanwhile, the project teams the proposed vendors have set up for the project would continue to bleed money.

“We have already spent about Rs 28 crores on the FICV project. Now we will have to evaluate our options to see how this programme is going to roll out. It has already been delayed by two years and we foresee at least another year’s delay,” says Brigadier (Retired) Khutab Hai, who heads the Mahindra Group’s defence business.

The “Make” category of the DPP lays down the procedure for Indian industry to develop “high technology, complex systems”, in order to “ensure Indigenous Research, Design, Development and Production of capabilities sought by the Armed Forces.”

It also mandates that the MoD will fund 80% of the cost of developing each of the two FICV prototypes, while the short-listed vendors will pay 20% each. While the cost of developing and manufacturing 2600 FICVs can only be roughly estimated, senior executives from two of the competing companies estimate that the bill would add up to about Rs 50,000 crores. This makes it India’s biggest-ever indigenous project.

According to the EoI, reviewed by Business Standard, the FICV has been conceived as a multi-role platform that must perform three roles. Firstly, it must be a battle-taxi that provides “mobility in battle for infantry, so that it can keep pace with armour.” Secondly, it must “(p)rovide fire-support to the assaulting/dismounted infantry,” i.e. spray the enemy with machine gun and cannon fire as the dismounted infantrymen charge at them. Thirdly, and most ambitiously, the FICV should hold its own on the mechanised battlefield, even against much more heavily armed tanks. According to the specifications, the FICV should “destroy enemy tanks, infantry or fortifications in conjunction with armour or independently.”

The FICV must also have “adequate amphibious capability for crossing of water obstacles like canals, rivers and stretches of sea”; and be “air portable” (i.e. in a transport aircraft’s cargo hold, or slung under a helicopter with chains). Its firepower must include a “fire-and-forget” third generation missile, a cannon and machine guns, which are operated through a “digital fully integrated fire control system with state of the art sensors and all weather surveillance devices.”

This would allow the FICV to destroy enemy tanks more than 4 kilometres away, well before the tank can engage the FICV with its main gun. The EoI also demands the capability to destroy “attack helicopters and low flying fixed wing aircraft.”

23 comments:

Sanjay Sangwan said...

Since the DPP procedure has not changed since the EoI going back for an evaluation criterion not only smacks of inefficiency but possible mal-intent too.

Ravin KUMAR said...

The basic problem is due to large number of lacunae and flwas in th e 'Make' procedure promulgated by the MoD. The procedure was hastily drafted and as the first two major programs under it progress a large number of issues have come up. the most critical one being it is silent on the number of Development agencies that can be shortlisted and a well defined process for shortlisting. How do you eleiminate a potential DA if he otherwise is Technically qualified is not provided for in the procedure. Second is the aspect of funding of the prototype...how does the MoD bring both the DAs on a common platform specially if their solutions involve differing technologies and subsystems.

Parth Aggarwal said...

MoD and Indian Government has proven itself to be unfit to carry out any kind of administration, be it civilian or military.

In the midst of this situation, investors only risk investing in sectors of ASSURED returns and minimum government regulation. This leaves critical sectors of the economy like defense, housing, manufacturing and healthcare in tatters as they will either be woefully under regulated or remain without investment.

There isn't one industry in India where investment has yielded results along with the important regulation that protects the consumer's interests, environment, labour rights etc. It's either

A. 'take all'-style unregulated capitalism in total absence of any governance. All types of shady practices are predominant. (This obviously can't happen in defence.)

or

B. No industry participation at all. (Presently happening in defence industry)

I have found most Indians agree with me, especially those with global exposure and having seen how governments in certain developed democracies work. But India's political leaders have another demographic of the huge impoverished and uneducated population that keeps them in office. This is why India will not be a developed country anytime soon.

Anonymous said...

Can't they issue an Ammendment/Addendum to the Tender. That is what is the normal practice.

Anonymous said...

The FICV no matter how tom-tomed was just going to be license production of a foreign ICV by the Indian private sector. in terms of R&D, there was not going to be much of a contribution. to really hit the target, Indian private sector has to become proactive and launch products in the market that would evoke some interest - not wait for an opportunity from the govt. and then start scouting for a partner whose product they can re-badge and market as their own. What needs to happen, is that all these private companies need to invest in a product and bring it to standards which will compel the govt./defence forces to look at them. The Indian Private sector is wanting a pie of things without actually showing their ability. Ability needs to be displayed before you actually can hope for something. Can the Indian Private companies today make a vehicle that competes with the hummer - none of them have been able to come up with the ideas even and we do not have a viable small vehicle since the days of the Jonga. Same goes for the ICV - they can atleast showcase something that they have made and not just display re-badged products.

Anonymous said...

Many advanced nations have gone through a painful process of failed programs,botched acquisitions,faulty planning and the lot.

They have improved,only with a will to improve coupled with the right political and policy support.

If our ministry's aim is only to procrastinate and be bureaucratic then god help us.

Only if we actually learn lessons and have the will to implement lessons can we hope to improve.

Anonymous said...

Some one must pay for this bungling - Guess Babus from MOD must be kept out and the Army must get into procurement.


Vinodh Ninan

Anonymous said...

Incompetence to the extent of being anti national. :(

What's in a Name? said...

Most of the things are gloomy boss. Our politicians are busy fighting scam scam among themselves. Nothing can happen

Unknown said...

There was a reason US Army got its Stryker APC to India to show off its capabilities. Just wait and see.

We are now paying back the US for its generosity during the Bush era.

FDI in retail, Opening up the insurance sector, C130, C5, Apache Longbow... the list shall continue!

Anonymous said...

1 example regarding telecom sector in India. before privatisation, we were used to stay in queue to get a single landline connection & the situation was like getting a lottery. But now with more players it takes hardly 5 minutes to activate a mobile connection. So the same policy could have started in defence sector much before. Not saying that private players should be allowed to make nuclear weapons but projects like ICV,trainers,tanks,jets,submarines can be easily given to private companies. But rules & policies have ruined our country. We have rules, but still cannot stop corruption,rape or any other crime, so whats the use of so called rules & guidelines. Now if again China attacks us,even a toddler can predict the same result like that of 1962.

Mr. RA said...

I think the technical expectations from the FICV are to increase so much that only a Merkava type of tank can just fulfill them. So if justified, in the best techno-commercial interests the FMBT project shall be merged with the FICV project.

Anonymous said...

My reading of defence news emanating from India provides subtle pointers to our strategic thinking.

1. Missiles will solve all issues - The thrust of Indian defence R&D is geared towards missile development.

2. Current administration is engaged in defining who represents "Aam Aadmee" - So that "free" welfare can be distributed to such "Aam aadmee".

3. Prioritize defence spending towards acquiring new technology items, such as 5th-gen fighters - Thus avoiding waste on secondary priorities.

4. Avoid wars at all costs - Focus being on "Aam aadmee" freebies for future vote banks.

These pointers clearly point to the consensus of thinking/mindset of our grass-root politicians. Such sundry politicians, care more about internal vote-banks for future elections, that they are willing to neglect national security at front-line states. They are afraid to take risks and make bold decisions. Unfortunately they don't understand that boldness is what identifies a leader from an ordinary man. The amount of energy that most of our politicians expend in verbal duelling, mud-slinging and defending their corrupt acts against investigations is astonishing. When we have such naive people acting as leaders, it only speaks volumes about the mental capability of our voters. No wonder some budding politician made a comment about "Cattle Class". If this is case, I don't think our "Aam Aadmee" deserves high-tech defence items. Non-violence will suffice to defeat all enemies, as our founding-father has exemplified. Fortunately it worked with the British for they saw their god "Jesus's" avataar in him. Whether this will work with Islam and Chinese is a matter of debate. Unfortunately, memory of our strategic thinkers is only short term of about 65-70 years. They self-erased our 2000+ years history of conflict with foreign adversaries and the tactics employed. Gandhi is just a fraction of that history. Big-story short, Don't be zombie voters, study the history of invasions over 2000+ years till present. Understand the consequences of our neglect. Prepare ourselves for the impending onslaught of evil mid-eastern foreigners. Broaden our understanding of Geo-politics and its implications on domestic events.

Anonymous said...

looks like they want FICV to be a bigger arjun along with seats for jawans...

Anonymous said...

better late... than never...
end tied and secure... better than... untied and loose ends... which facilitates... all kind of infiltrations... like rishis...

Anonymous said...

it's more or less impossible to have all this armament, a reasonable number of soldiers (6-8) and still be able to float or be carried by a helicopter.

unless you have paper armour.

Anonymous said...

(i also doubt you could have c-130 compatibility for that matter).
stryker tried it and failed miserably. and it only has an OWS, not a full-blown war package (cannon, missiles, harsh language)

pbdalvi@gmail.com said...

FICV's GSQR is like our MBT -80 which is yet to see the day light, ARJUN not with standing. The laid down QR is so intricate that it will take yrs for it to fructify and ultimate kapoot ??? of the project. Best is to buy of the shelf from international markets. Having operated with the ICV for years whats wrong with BMP-3 ???

Anonymous said...

According to a chaiwaala who serves tea to the babus in MoD mantralaya , The problem with FICV is that it can not go to MARS and come back!!!!!

Anonymous said...

If the darn thing is going to have such awesome situational awareness and remotely operated weapons stations, then why waste real estate and take on weight penalties by creating useless space for carrying soldiers?

If we are so intellectually advanced as to think of all these criteria, then why not take the next step and make the darn thing autonomous, what can be safer for soldiers than not being there when the assault is actually taking place. They can move in later after the MBTs and the "Terminator" machines have cleaned up the battlefield.

My frustration with the path our nation is taking with respect to self reliance in war fighting resources, is so high that im not sure if the things I have written above are a desperate cry for sanity in procurement or just sarcasm born of frustration.

Anonymous said...

Delay is the deadliest form of Denial.It prevents you from thinking of alternates whilst you travel in "hope" which will always be dashed after it is too late.

Ajay said...

Those that worship cows will behave like cows.

Prodyut said...

Delay is the deadliest form of denial...C.Northkote Parkinson