Monday, July 11, 2011

Auto cos, L&T vie for Army’s $10-bn combat vehicle order

Ashok Leyland (ALL), Larsen & Toubro (L&T), Bharat Forge, Tata Motors and Mahindra & Mahindra (M&M) are among those who have bid for a $10-billion (R44,000 core) defence ministry contract to supply combat vehicles for the Indian Army. The size of the tender is comparable to the one for combat aircraft being finalised by the ministry.

The ministry will shortlist two vendors for Futuristic Infantry Combat Vehicles (FICVs) by July end, based on technical and commercial criteria under the ‘buy & make’ category. Under this category, only Indian companies with technical and financial capabilities are asked to submit bids.

Infantry combat vehicles are armoured vehicles carrying soldiers and supporting main battle tanks with firepower in war. Their armour is lighter than main tanks’ but heavier than armoured personnel carriers’.

While ALL and L&T have bid as a team, state-owned Ordnance Factory Board (OFB) is also believed to be in the fray. The defence ministry was yet to respond to an email query sent to it several days ago on the subject.

The Army would require 2,610 FICVs to replace the existing, Soviet-vintage ‘Sarath’ BMP-II combat vehicles built by OFB. Sarath has been in service for around 31 years, and will be phased out from 2017. Confirming ALL’s involvement, V Sumantran, executive vice-chairman, Hinduja Automotive UK, said: “We are working on the FICV project with L&T.”

Subodh Tandale, Bharat Forge executive director, also confirmed the firm’s interest in the contract, saying, “We are working on the FICV project and will not just be a component supplier but participate on a bigger scale.” A Tata Motors official confirmed participation in the project but was unwilling to go on record. Kutub Hai, head, Mahindra Defence Systems, said: “We are one of the shortlisted companies and are now waiting for the final shortlist which should be out by end of July or early August.”

In the early stages of selecting a new combat vehicle, the Army headquarters outlines its existing capabilities and future requirements, indicating its long-term requirement in terms of numbers, time schedule, fund availability and technologies. This is scrutinised by a committee before listing it as a ‘buy & make (Indian)’ project.

Indian firms reputed to have requisite technical and financial capabilities to undertake such projects are invited to bid and shortlisted. The winner will be expected to build 70% of the vehicle.

As per India’s defence procurement rules framed in 2008, the FICVs will be built in an integrated manner involving the Army, the defence ministry and the industry in aspects of research, design, development and production of systems. Detailed specifications for FICVs are still being outlined. According to sources, the FICV is expected to be half-tracked and half-wheeled, and a combat vehicle ready for inland warfare.

The ministry had invited expressions of interest for the project last year. The companies, which submitted their responses by the end of last year, made proposals on developing FICVs, key project milestones, estimated capital expenditure, chosen technology — and how it will be developed or purchased – and the minimum order they would need to set up a financially viable production line. These responses are being evaluated by the ministry, with a team visiting the vendors’ facilities to evaluate their and partners’ capabilities. Ganesh Raj, leader, aerospace and defence, Ernst & Young said: “The FICV is envisaged to be in service between 2017 and 2057 and is being developed as a replacement for BMP-II. FICV is one of the first programmes under ‘Make’ category as per India’s defence procurement policy.”

“The FICV project was taken up by the defence ministry only for Indian companies, who can opt for technology tie-ups with foreign companies if they wish,” said Nidhi Goyal, director, Deloitte India. Goyal added that the vehicle was expected to be developed over three to four years after which the concept vehicles would be evaluated by the defence ministry.

No comments:

Post a Comment