Wednesday, 7 October 2015

Samsung-L&T win Rs 12,500 crore artillery contract

Major production contracts likely for L&T facilities in Powai and Pune

By Ajai Shukla
Business Standard, 7th Oct 15

Indian engineering major, Larsen & Toubro (L&T), in partnership with Korea’s Samsung Techwin (STW), has bagged a Rs 4,875 crore ($750 million) order for supplying the Indian Army with 100 self-propelled (SP), tracked howitzers.

Business Standard has learnt the defence ministry has written to L&T and STW informing them that their gun --- called the K-9 Vajra --- has cleared army trials conducted in 2013 and 2014. Simultaneously, the ministry has written to the other vendor in contention, Russia’s arms export agency, Rosoboronexport (RoE), rejecting the gun it offered, the 2S19 MSTA howitzer.

The K-9 Vajra consist of a 155 millimetre, 52-calibre howitzer, mounted on a tracked vehicle. It is highly mobile and can keep up with tank columns in the open desert. The Indian army wants this gun for its mechanized strike corps, which launches rapid thrusts deep into enemy territory.

The strike corps’ T-90S tanks currently outpace their artillery guns, which are towed by wheeled vehicles. This constrains the tank spearheads to fight without artillery support at key moments in the advance. With the K-9 Vajra mounted on a tracked vehicle that keeps up with tanks, the armour spearheads would be assured of heavy fire support.

The contract falls under the “Buy Global” category of procurement, which provides for over-the-counter sales of ready-built defence equipment. Despite that, STW has partnered L&T to ensure that a full 50 per cent of the weapon system is built in India.

L&T plans to build 13 major sub-systems of the K-9 Vajra at its facilities in Pune, Talegaon and Powai. This includes the fire control system, ammunition handling system, muzzle velocity radar, and the nuclear, biological and chemical (NBC) system.

With the acquisition subject to 30 per cent offset liability, the high percentage of domestic manufacture meets that requirement easily.

The exact cost of the deal is still unknown, since the commercial bid submitted by STW and L&T has not yet been opened. However, STW-L&T are the only ones remaining of the four companies that originally bid: Bharat Earth Movers Ltd (BEML), Tata Power, RoE and STW-L&T. The first two didn’t make it to the trial stage, while RoE failed to meet the army’s requirements during trials.

The army requires at least three K-9 Vajra regiments for each of its three armoured divisions, and another regiment for each of the independent armoured brigades in the three strike corps. The eventual requirement, therefore, is of 12 regiments of tracked SP guns, i.e. 252 K-9 Vajra systems.

That suggests supplementary purchases of the K-9 Vajra would take the order up from the initial Rs 5,000 crore for 100 guns, to at least Rs 12,500 crore. The vendors would continue reaping benefits from maintenance, repair, overhaul and upgrade of the gun through its 30-40 year service lifetime.

L&T has pursued its relationship with STW strategically, ever since the two sides struck up a partnership in 2007. Noting that the Samsung gun’s turret fired only a single type of high-explosive ammunition, against India’s requirement of multiple warheads, L&T re-engineered and indigenized the gun control system to conform to the Indian Army’s requirements.

Besides the K-9 Vajra, the army is looking to buy several more gun types to equip its 264 artillery regiments that have not bought new equipment since 1986, when Bofors controversially supplied India 410 FH-77 howitzers.

In the pipeline now are 114 howitzers from the Ordnance Factory Board (OFB), with the order possibly rising to 414 guns if they perform well. The Defence R&D Organisation (DRDO) is partnering Indian private companies in the Advanced Towed Artillery Gun (ATAG) project to develop a new 155-millimetre, 52-calibre gun. A contract could be concluded soon with BAE Systems for 145 ultralight howitzers for mountain formations. In November, the ministry sanctioned the purchase of 814 mounted gun systems (MGS) for an estimated Rs 15,750 crore. Meanwhile separate tenders are out for 180 wheeled (self-propelled) howitzers, and 1580 towed guns.

The defence ministry and L&T declined to comment on this subject.

6 comments:

Tako Nada said...

Great . Need to induct quickly and based on the base design new type of domectic artillery.

Guru said...

Dear Ajay,

Would really like to see an article from you which covers the HAL projects and when they will be inducted, since you have been following them quite regularly in the past. Notably-

- HJT 36 Kiran- Is it dead or alive?
- LUH or LOH (Light Observation Helicopter)- Was supposed to fly in 2012. This is 2015 end.
- LCH Induction- Was supposed to be inducted end 2015 and i hear weapon trials in mid 2016...
- LCA Status - Biggest one. Is the LCA going to get FOC by March 2016 as declared earlier?


sohamn said...

I don't understand what is the need to have a tracked gun and another wheeled gun. We should have commonality and have a bigger number of tracked gun to improve
A) Supply Chain
B) Operational efficiency
C) Uniform training
D) Availability and Spares
E) Efficiency of Scale

There is no use case for two types of self propelled guns.

Anonymous said...

They should mount this gun on ARJUN chassis.

Anonymous said...

How is this K9 Vajra better than Bhim? In terms of both cost and technology Bhim is far superior than K9. Why did we select this gun? The prices you've mentioned it is almost twice that K9 costs normally. WHy are we paying more than double for this imported gun? What happened to Indian Bhim? Why wasn't it part of the trials? Also, when we've OFB and DRDO, why is this project given to L&T? Isn't it needlessly going to raise the overall cost of the gun? How does the Govt justifies the enormous expenditure on DRDO and OFBs if orders and technology are ultimately given to private cos with taxpayers' money?

Krish said...

Ajay,

Your statement about the gun is creating confusion, wherever your article is being quoted. Can you please elaborate? You are saying:

"Army requires at least three K-9 Vajra regiments for each of its three armoured divisions, and another regiment for each of the independent armoured brigades in the three strike corps. The eventual requirement, therefore, is of 12 regiments of tracked SP guns, i.e. 252 K-9 Vajra systems."

So, 3 regiments for 3 armoured divisions ========== 3 regiments
1 regiment for each armoured brigade in 3 strike corps == ?? is it 1 or 3 ??

Where does the 12 regiment number comes from?

Please clarify.Thanks