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OFB, MoD Companies Discussion Thread

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 27 Sep 2016 04:51

KaranM,
Should we have thread only on OFB to note what are its factories and what are its deficiencies? In many threads we read ammo shortage is an issue to administer resounding slaps to Pakistan.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Aditya_V » 27 Sep 2016 13:26

ramana wrote:KaranM,
Should we have thread only on OFB to note what are its factories and what are its deficiencies? In many threads we read ammo shortage is an issue to administer resounding slaps to Pakistan.


Blame is not only OFB, but Govt and Wheeler Dealers since independence who have conspired with Foreign Governments and NGO's to make sure we dont have an Independant MIC to even manufacture Ammo. The same cotierie keeps asking for imported guns, got the Vidvanshak and Denel banned since thier Anti Material rifles caused too many Paki casualties in Operation Parakram and imported Baretta sub machine guns for BSF(made me sick seeign the wateful import), delayed domestic 155mm ammo production by 9 years claiming it was in George Fernandes's constituency.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 05 Oct 2016 10:10

Some responsibility has to be borne by top military brass also. Do they go to political bosses and say, defer K-9 and spike purchases as NVDs, BPJs, Shields, 106mm RCL are more important in the war that is being currently fought or any possible war that is envisaged. Everybody loves arming for full scale all out air and mechanised warfare as it requires lots of costly toys which will never be used compared to equipment for light infantry.

Look at the statements of Raha, regarding imports, does one ever hear such statements in favour of routine indigenous equipment. Does Raha say, that even his Garuda and Base forces are short of NVDs, BPJs, Shields, undergrowth clearing equipment, reinforced hangers, spare parts, simulators etc. NO! He will ONLY talk about GRIPEN and another line of imports or more Rafales.

How is he able to say that Rafale is super aircraft? Without even one Indian specific aircraft reaching India or even being manufactured?

What is the focus of IAF chief as per his own statements? GRIPEN, RAFALE, PAKFA, costly imported upgrades. But no mention of :-

Spare parts, maintenance
Simulators
BPJs, Helmets, Shields, NVDs
Protected pens for aircraft and ammo storage
Base Security
HTT-40, IJT, Saras, Rustom, LCH, LUH
LCA MK-2, AMCA, AURORA

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 18 Oct 2016 10:09

ramana wrote:Can DRDO or OFB produce a reloadable RPO Shmel or a thermobaric round for the CG 84?
Doesn't have to be exact match but close enough spec.

---
Looks like SAAB/Bofors makes such a round for CG 84.


If we can produce Milan, Konkurs then RPG is equivalent to a simplified ATGM. But RPGs have been a playground of arms dealers. We have import of RPGs, RCLs from Spain, Israel, South Africa, Sweden, Russia etc. Did I miss any? :oops: :evil: And even our Carl Gastaf & its ammo being manufactured under ToT from SAAB Sweden since 2005 has 75% imported components. Hence same story from RCL to Brahmos to Barak.Hence we hardly manufacture anything except perhaps handle of Carl Guastaf and packaging of ammo. Therefore thermobaric rounds may be far cry.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 18 Oct 2016 10:15

Aditya_V wrote:
ramana wrote:KaranM,
Should we have thread only on OFB to note what are its factories and what are its deficiencies? In many threads we read ammo shortage is an issue to administer resounding slaps to Pakistan.


Blame is not only OFB, but Govt and Wheeler Dealers since independence who have conspired with Foreign Governments and NGO's to make sure we dont have an Independant MIC to even manufacture Ammo. The same cotierie keeps asking for imported guns, got the Vidvanshak and Denel banned since thier Anti Material rifles caused too many Paki casualties in Operation Parakram and imported Baretta sub machine guns for BSF(made me sick seeign the wateful import), delayed domestic 155mm ammo production by 9 years claiming it was in George Fernandes's constituency.


+1. Army could have purchased "heavy vidhwanask" till the process of light anti Material rifle import was complete. But no anti material rifle since last 17 years till favourite imports are not permitted. Almost 2000 crores worth of useless 9mm SMGs at four times the cost of INSAS is considered urgent necessity.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 30 Oct 2016 05:12

Can we discuss the new shopping list that Sandeep Unnithan rented in India Today? How many are made in OFB? How many are not made?
Why 50 CG 84 RCL when OFB is supposed to be making since donkeys ears?
Please no BS.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 30 Oct 2016 06:16

Link to OFB weapons page:
http://ofb.gov.in/index.php?wh=Weapons&lang=en

As can be seen some of the weapons ring purchased are made by OFB.
Will post Ammo page also.

http://ofb.gov.in/index.php?wh=A-E-P-C&lang=en

Same story here.

So what's going on? India can't have same problem repeat. OFB needs to be put under a Military Officers to ensure its doing its job.
Can't they make 50 CG RCLs ?

X-Post for ref:

vaibhav.n wrote:MoD's shopping spree break-up table


Image

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby shiv » 30 Oct 2016 07:21

ramana wrote: OFB needs to be put under a Military Officers to ensure its doing its job.
Can't they make 50 CG RCLs ?

ramana when the system is rotten, putting an efficient man on top will not clean it up. The military works because military people start at the bottom of a system that must work and then work their way up to the top. In PSUs - workers are recruited by caste, community, bribery, political patronage and they are doing a "government job". When driver or a sweeper is recruited he does not feel is is part of a strategic national security system. He is looking at salary, perks, subsidized housing, schools, casual leave, annual leave, overtime pay, dearness allowance, additional dearness allowance etc. The PSU can be brought to a standstill by a driver's strike - but very often strikes are set off by unions of what are called Class 4 employees. Putting a good executive on top will last till he is due for his next angioplasty

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Thakur_B » 30 Oct 2016 08:33

ramana wrote:Link to OFB weapons page:
http://ofb.gov.in/index.php?wh=Weapons&lang=en

As can be seen some of the weapons ring purchased are made by OFB.
Will post Ammo page also.

http://ofb.gov.in/index.php?wh=A-E-P-C&lang=en

Same story here.

So what's going on? India can't have same problem repeat. OFB needs to be put under a Military Officers to ensure its doing its job.
Can't they make 50 CG RCLs ?


Ramana ji, OFM makes Mk3 variant of charlie-g currently. The request of for mk-4 variant, probably for SF only. Its the latest model introduced last year.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 31 Oct 2016 03:15

Thakur, Good clarification on Mk4 CG 84 RCL being sought.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 31 Oct 2016 14:42

ARDE Carl Gustaff under development with Budget of Rs 10 crore is equivalent to MK4. But meanwhile imports of hundreds of crores worth of Mk3 and ammo has been done under screwdriver ToT. As per CAG, OFB is importing 75% of the components of Mk3 assembled in India and is still unable to ramp up production.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ks_sachin » 31 Oct 2016 16:01

Gyan wrote:ARDE Carl Gustaff under development with Budget of Rs 10 crore is equivalent to MK4. But meanwhile imports of hundreds of crores worth of Mk3 and ammo has been done under screwdriver ToT. As per CAG, OFB is importing 75% of the components of Mk3 assembled in India and is still unable to ramp up production.


So what would you suggest the armed forces do?

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby vaibhav.n » 31 Oct 2016 16:50

CAG Report:

As replacement of in-service 84mm Rocket Launcher, a shoulder fired weapon, Army HQ, in November 1997, issued GSQR for design and development of new light weight 84mm Rocket Launcher (RL MK III) along with five types of ammunition and sighting system. In contrast to the normal practice of taking up a project in totality, ARDE proposed to first develop the launcher, followed by the ammunition.

Project for development of Rocket Launcher was earlier sanctioned in April 1997 by DDRD at a cost of 75 lakh and PDC as October 1999 in anticipation of the Staff requirement. The launcher was stated to be successfully trial evaluated by DRDO and accordingly project was closed with effect from 31 March 2000 after an expenditure of 60.32 lakh.DRDO in February 2002 sanctioned a staff project for undertaking design and development of ammunition for 84mm RL MK III by the laboratory at an estimated cost of 6.35 crore with PDC of four years.

DRDO was to offer five Light Weight Rocket Launchers for troop trials by March 2001 but it conveyed that tubes could be offered in June 2002 and that too without enhanced range sights and ammunition which would take another three years to develop. To meet the requirement of carrying out troop trials with modified tube, DRDO in March 2001 sanctioned another project at a cost of 90 lakh with PDC as November 2002. The launcher was claimed to be successfully trial evaluated under this project, and was closed in March 2004 at a cost of 79.96 lakh.

It was noticed in audit that Army HQ had concluded contract in March 2002 and March 2003 to procure 3000 Rocket Launchers Mk-III, 3000 telescopic sight and 36000 HEAT ammunition from M/s FFV, AB Sweden at a total cost of SEK 859.90 Million. Further OFB also entered into a contract in February 2005 with M/s FFV, AB Sweden for TOT for 84 mm RL MK-III Weapon and HEAT 551 ammunition at a cost of SEK 17 Million for which they received technology for all parts of the weapon except for Carbon Filament Winding (CFW) of the barrel. In the meantime Ordnance Factory Board received TOT of ammunition in 2005 consequent to which the project was foreclosed.

Ordnance Factory Board Kolkata informed the laboratory that the Army had an urgent requirement of the ammunition. As development of the ammunition would take further four years, the Users could not wait that long and had decided to import the launcher system and ammunition system. The Army also intimated that they did not need the indigenous system any more.

Ministry in its reply contended that the development had culminated in fruitful indigenization of composite technology. Ministry’s reply is not tenable as Directorate General of Infantry in April 2011 stated that the launcher developed by ARDE was trial evaluated four times and after each trial there were defects to be rectified.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Thakur_B » 31 Oct 2016 17:20

This government was supposed to save our MIC which the earlier government doused in kerosene and set on fire.

This government has chosen to urinate all over the still smouldering dead body.

Imported aircraft, imported small arms and what not.

Upa had their commission with mmrca. Nda will have its commission with SELF.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby vaibhav.n » 31 Oct 2016 17:50

CG M4 is a SF specific weapon with many newer confined space rounds in offing. As can be seen from the table below they have further shaved of weight and length. The M2 variant is the IA standard now getting replaced with the M3. US Army Rangers and SF also use the M3 variant. After their Afghanistan experience the M3 would be issued to the entire US Army as a platoon level weapon. Even in exercises with us they gained all the specific techniques how the IA deploys the CG.

CARL-GUSTAF
M2 Weight: 14.2kg Length: 1130mm
M3 Weight: 10 kg Length: 1065mm
M4 Weight: <7kg Length: <1000mm

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 31 Oct 2016 20:54

ks_sachin wrote:
Gyan wrote:ARDE Carl Gustaff under development with Budget of Rs 10 crore is equivalent to MK4. But meanwhile imports of hundreds of crores worth of Mk3 and ammo has been done under screwdriver ToT. As per CAG, OFB is importing 75% of the components of Mk3 assembled in India and is still unable to ramp up production.


So what would you suggest the armed forces do?


Atleast on this issue Army may not any role to play. There is subsequent CAG report of 2015 which points out that ARDE developed Launcher tube failed again in 2015. SAAB has access to technology of only 50% components and even that has not been transferred inspite of 10 years having passed. This is fxxk up of MOD, ARDE, OFB that they neither sanctioned adequate funds for R&D nor negotiated effective ToT agreement.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 01 Nov 2016 02:03

I accept the CG Mk4 RCLs purchase.

What about the rest of the material made by OFB?

Leave the anti tank rockets and launchers.


For Ref:

vaibhav.n wrote:MoD's shopping spree break-up table


Image

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 01 Nov 2016 02:19

Here is OFB: 30mm Gasha for the SU 30 gun:

http://ofb.gov.in/products/data/ammunit ... gsh_he.htm

and

23mm for Schilka:

http://ofb.gov.in/products/data/ammunit ... h_apti.htm

How is this 12.7mm cartridge different than the Mi-35 gunship?

I think this 12.7 mm is for the T-72 and not the Mi-35 which carries 23 mm cannon.

http://ofb.gov.in/products/data/ammunition/sc/23.htm


Here is the S-8 rocket for the helicopters. Obviously its from Russia unless trying to buy from Eastern European stocks.

Looking at all these purchases, looks like a large anti-tank force is being readied.


Also means OFB needs to be shook up. Most of the stuff is made by them.

India expects the Paksit to launch a repeat of Assal utar?

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 01 Nov 2016 10:39

I am slowly going through few hundred pages of CAG reports on OFB. My observations:-

Army wants 600 FN GPMGs but OFB produces 125 per annum. Army wants 2500 Carl Gustafs OFB produces 600 Per annum. OFB Producing NIL HMGs and AGLs against demand of 250 per annum. Dhanush not been ordered by Army till May 2015 but in any case OFB cannot manufacture it as even the tenders for building for the manufacturing plants not issued in last 5 years. OFB produces NIL sniper rifles and NIL Ghatak rifles.

OFB Cannot produce 40mm ammo for UBGL, sniper ammo, tank machine gun rounds, tank FSAPDS rounds, AK rounds etc.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 01 Nov 2016 10:41

Karthik S wrote:http://indiatoday.intoday.in/story/project-cheetah-drones-india-army-air-force-surgical-strikes-israel/1/798687.html

Project Cheetah: India to now have combat drones to carry out surgical strikes in future
Under Project Cheetah, the Indian Air Force is planning to upgrade and equip its Israeli-made UAVs with missiles which will be able to carry out surgical strikes without risking the lives of soldiers.
.
.


Helo launched ATGM and this proposed deal show that Kargil type Dalals are getting active.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 01 Nov 2016 20:54

Gyan wrote:I am slowly going through few hundred pages of CAG reports on OFB. My observations:-

Army wants 600 FN GPMGs but OFB produces 125 per annum. Army wants 2500 Carl Gustafs OFB produces 600 Per annum. OFB Producing NIL HMGs and AGLs against demand of 250 per annum. Dhanush not been ordered by Army till May 2015 but in any case OFB cannot manufacture it as even the tenders for building for the manufacturing plants not issued in last 5 years. OFB produces NIL sniper rifles and NIL Ghatak rifles.

OFB Cannot produce 40mm ammo for UBGL, sniper ammo, tank machine gun rounds, tank FSAPDS rounds, AK rounds etc.



Gyan< Can you do us a favor and link those CAG reports here? Would be very useful. I want to have a thread for OFB to examine the systemic issues that effect the supply chain for the military. This would be off topic here.
BTW, Parrikar took back Rs. 55,000 crores from HAL which were sitting there doing nothing but earning interest and shown as profit!!!!

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 01 Nov 2016 22:39

3 month old article in Economics Times:

http://economictimes.indiatimes.com/new ... t&from=mdr


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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby Gyan » 02 Nov 2016 00:41

Read the Annexures to the reports, lot of info available there.

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby narmad » 02 Nov 2016 01:42

Gyan wrote:I am slowly going through few hundred pages of CAG reports on OFB. My observations:-

Army wants 600 FN GPMGs but OFB produces 125 per annum. Army wants 2500 Carl Gustafs OFB produces 600 Per annum. OFB Producing NIL HMGs and AGLs against demand of 250 per annum. Dhanush not been ordered by Army till May 2015 but in any case OFB cannot manufacture it as even the tenders for building for the manufacturing plants not issued in last 5 years. OFB produces NIL sniper rifles and NIL Ghatak rifles.

OFB Cannot produce 40mm ammo for UBGL, sniper ammo, tank machine gun rounds, tank FSAPDS rounds, AK rounds etc.


Appreciate the time and the effort that you dedicated for this .

Thanks
Narayan

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OFB, MoD run DPSUs/Companies Discussion Thread

Postby ramana » 02 Nov 2016 22:21

We need to focus on OFB, MOD run companies like, HAL,BDL, MDNL, shipbuilding related companies like: Mazgoan, garden reach, etc.
Repeated production and quality shortfalls lead to imports at crucial times and are a drain on resources and jeopardize national security.
Please highlight the achievement also for balanced view.

Thanks,
ramana

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Re: India's R&D in Defence DRDO, PSUs and Private Sector

Postby ramana » 03 Nov 2016 00:28




Text:

Why the Indian Artillery lacks the indigenous Bi Modular Charge System (BMCS)?


August 22, 2014 By Sanjay Sethi

The foundation stone of the fortieth Ordnance Factory for manufacture of Bi Modular Charge System(BMCS) for the Indian army’s artillery was laid at Rajgir in Nalanda on April 14, 1999 by the then Prime Minister of India. The factory was expected to be completed by November 2005. Since the sanction of the project, a lot of otherwise grueling positives have happened, which include acquisition of approximately 2,650 acres of land, rehabilitation of 1,191 families[ii] that were displaced, conclusion of contracts for Transfer of Technology (ToT) and construction of manufacturing plants with some of the biggest firms in the world like Denel of South Africa, Israel Military Industries (IMI), Biazzi of Switzerland and Bowas of Austria; after several rounds of tendering[iii]. As on January 01, 2012 the Ordnance Factory Nalanda had on its roll 142 employees[iv] and till May 31, 2014 over Rupees 910 crores have been expended on the project. Despite pressing user demand, commitment of the country’s executive, colossal investment of public money and all the activity, the factory isn’t producing as yet. What makes matters worse is the fact that in response to a recent parliament question, the Government has informed that no time line has been fixed for completion of construction of Ordnance Factory at Nalanda in view of the uncertainties in procurement/fabrication of the BMCS plant[v].

Many have referred to the project as jinxed but on the other hand the story of factory at Nalanda tells all about the pitfalls involved in building indigenous defence capability through the public sector route. Apart from failings in project planning and procedural inadequacies; reaction to corruption, fear of corruption and corruption contribute the most towards system’s failing. An analysis of the activities and decisions taken regarding the factory in past 15 years throws up some very good deductions with respect to our capability accretion process.

The Ordnance Factory Nalanda needs three plants to operationalize. The foremost being the BMCS main plant which constitutes of five sub plants. These include the Combustible Cartridge Case Plant, Single Base Propellant Plant, Triple Base Propellant Plant, Nitro-cellulose/Nitro-glycerin paste Plant and Propellant Charge Assembly Plant. The two secondary plants are those which manufacture primary ingredients - Nitro-glycerin and Nitro-cellulose. Interestingly, these three plants were tendered separately. The project of setting up of the factory was thus effectively converted into three independent and uncoordinated procurement decisions. The current reality is that while the feeder plants are raring to go, the main BMCS plant is nowhere in sight. The feeder plants may even waste out even before the factory sees some real action! Sound Project planning is pivotal to any infrastructure creation. Things may have been entirely different if the three plants were tendered as a package deal.

The reaction to corruption is next area of concern which needs to be analysed pragmatically. The Army after extensive trials recommended procurement of BMCS from Somchem, a division of Denel, South Africa, in 1998-99. The company was the only known manufacturer of BMCS at that time. A contract was concluded with Denel for procuring 4 lakh BMCS modules in April 2002 along with TOT for indigenous production. The contract envisaged delivery of TOT documents which comprised of product specifications including detailed dimensional drawings and designs, quality and inspection procedures, process descriptions and production methods in respect of raw materials, intermediate products and final products. The total cost of the TOT package was of US $ 13.99 million. Tender Enquiry for construction of the BMCS plant was issued for the first time on March 29, 2004. The technical bids were opened on July 12, 2004 and price bids on October 26, 2004. IMI Israel emerged as the L-1 firm at a cost of Rupees 571.71 crore. However, the Ministry of Defence in June 2005 decided to cancel all contracts with Denel due to allegations of corruptions in some other case. The Nalanda project was also kept in abeyance from June 2005 to July 2006, even though Denel had supplied the necessary ToT documents and payment for it had been made. The decision to hold the project in abeyance as also subsequent delay in finalizing contracts led to considerable cost and time overrun. The estimated cost as per revised sanction increased to Rupees 2,160.51 crore in February 2009 from Rupees 941 crore originally sanctioned. The reaction to corruption in the instant case had no effect on Denel but the army suffered immensely. :((

After the project was restarted in July 2006, IMI asked for price increase from the originally quoted price of Rupees 571.71 crore to Rupees 654.79 crore. OFB did not accept the increased price and issued fresh global tender enquiry on February 26, 2007 with a view to generate more competition. Out of the five companies to whom tenders were issued, only three responded. Later, only two companies remained in consideration since the third refused to sign the integrity pact. The price bid was opened on 28 January 2008. The offer of IMI Israel was the lowest at Rupees 1,090.83 crore and the next higher quote was at Rupees 1,885 crore. During the earlier negotiations, the escalation demanded by the IMI was 15 per cent over a period of two years from July 2004 to August 2006. Against the fresh tender, the escalation was 67 per cent over a period of one year. Refusal to accept the asking price of Rupees 654.79 crore proved very costly. One actually wonders what prompted retendering, when it was known that firms capable and willing to supply BMCS plant are very few. Playing too safe in almost all cases adds to costs.

The contract for the BMCS plant with IMI Israel was finally concluded in March 2009 at the total cost of Rupees 1,175 crore. Advance amounting to Rupees 174 crore was also paid to IMI, which remained idle as all the transactions with IMI were put on hold in June 2009 by the Ministry of Defence. Finally, corruption took its toll and the contract was cancelled post investigation of allegations relating to illegal gratification. IMI was debarred from doing any further business dealing with Ministry of Defence for a period of ten years.
[I] {Clean Anthony strikes again. Renuka Choudahray struck earlier with the Denel case.}


Having failed to procure the plant it was decided to fabricate the BMCS plant indigenously. Despite claims of competence by DRDO and the OFB the required plants haven’t materialized till date. Interestingly, DRDO had claimed to have addressed the requirement way back in 2006. To quote from the December 2006 issue of Technology Focus, a bulletin of the DRDO, “DRDO has developed BMCS for 39 caliber 155 mm guns, which can also be used for 45/52 caliber 155 mm guns. … … … Dynamic trials have established that indigenous BMCS are equivalent to imported BMCS in all respects like muzzle velocity and range[vi].” Currently, a Project Monitoring Board at the level of the Ministry of Defence and a steering committee at the level of the OFB, are in place to monitor the project. Both are unable to indicate a timeline for completion of the project, as on 15 July 2014.

It is very apparent from the case that the public sector entities which form the Indian defence supply chain have failed to procure from foreign manufacturers/indigenously fabricate the BMCS plant. This is despite the fact that the country has purchased the requisite technology to include product specifications, detailed dimensional drawings and designs, quality and inspection procedures, process descriptions and production methods in respect of raw materials, intermediate products and final products. In the last fifteen years we have made repeated attempts to address failings in operationalization of Ordnance Factory at Nalanda by repeating steps of the procedure for capital procurement. It is time for decision makers to stop reinforcing failures. It is time to redefine the Indian army’s supply chain for BMCS. If we fail to exploit the domestic private sector defence industry to execute the project, our state will not change. It is time to privatise or at least corporatise.



Views expressed are personal.

References




[i] Press Information Bureau. (2002, Dec 12). Press Release. Retrieved Aug 14, 2014, from Ordnance Factory at Nalanda: http://pib.nic.in/archieve/lreleng/lyr2 ... 00224.html


[ii] Press Information Bureau. (2010, July 27). Press Information Bureau. Retrieved Aug 14, 2014, from Nalanda Ordnace Factory: http://www.pib.nic.in/newsite/erelease.aspx?relid=63599


[iii] CAG. (2010-11). Procurement of Stores and Machinery in Ordnance Factories, Report No 15 . New Delhi: CAG, Govt of India. All details regarding contracts are from the CAG report.


[iv] Ordnance Factory Project Nalanda. (n.d.). Retrieved Aug 15, 2014, from Ordnance Factory Board: http://ofbindia.gov.in/units/index.php? ... _3&lang=en


[v] Press Information Bureau. (2014, Juy 15). Press Information Bureau. Retrieved Aug 14, 2014, from Ordnance Factory Rajgir: http://pib.nic.in/newsite/PrintRelease. ... lid=106590


[vi]Armament Technology. (Dec 2006). Technology Focus.




ramana
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Re: OFB, MoD Companies Discussion Thread

Postby ramana » 03 Nov 2016 00:37

Another gem arguing for divestment in sundry goods mfg by OFB

http://www.claws.in/1209/seven-reasons- ... sethi.html

Seven Reasons Why We Need to Disinvest in Ordnance Equipment Factories Group


#1209 41291 June 08, 2014 By Sanjay Sethi

The Ordnance Equipment Factories Group (OEFG) is one of the five product-based operating groups functioning under the control of the Ordnance Factories Board at Kolkata. The OEFG produces general stores and clothing (GS&C), and exercises control over five out of the 39 operational Ordnance Factories. The Ordnance Equipment Factory Kanpur (OEFC) established post mutiny in 1859, Ordnance Clothing Factory Shahjahanpur (OCFS) set up in 1914, Ordnance Parachute Factory (OPC) set up in 1941 to meet the requirements of the allies during the Second World War, Ordnance Clothing Factory Avadi (OCFA) established in 1961, and the Ordnance Equipment Factory Hazratpur (OEFH) which was set up in 1982, are the five factories which produce GS&C inventory for the three Services. They produce uniforms, winter clothing, extreme cold and high altitude clothing, tentage, water proof covers, water holding equipment, soldier’s personal equipment, boots, saddlery items, and parachutes for personnel, supply dropping parachutes and brake parachutes for aircrafts, amongst many such items. The army is its principal customer and accounts for 77.36 per cent of the OEFG sales. This article presents seven very formidable reasons, supported by factual data, why the government needs to disinvest in the OEFG.

Firstly, the private sector in contemporary India is capable of effectively meeting the GS&C demands of the services. During the period 2008-2012, the OEFG could meet only 56 per cent of the requirement of the services, and the balance, amounting to Rupees 2141.28 crores, came from trade[i]. The volumes indicate that the private sector is capable, and possesses the requisite potential to deliver the low-technology needs of the Services. On one hand the private sector is keen to generate revenue through supply of GS&C items, and on the other hand, the OEFG suffered a loss of Rupees 226.09 crore in the course of meeting the requirement of services.

Secondly, the OEFG is not responsive to the needs of the Services. In the present system, the OEFG has the first right to book orders against the demands of the Services. The private sector comes in only if the OEFG refuses, or fails to meet the demands of the Services. To illustrate, against the target of 4,87,444 pairs of Boot High Ankle DVS, the OEFC supplied only 32,500 boots in 2009-10. This forced the OEFG HQ to issue a No Objection Certificate to the Director General of Ordnance Services (DGOS) to procure two lakh shoes from trade. The case of boots is not a solitary occurrence; slippages are not uncommon to the OEFG. Against mutually accepted targets of 2011-12, slippages were recorded for 41 items amounting to supplies worth approximately Rupees 170 crores. The OEFG is largely responsible for non-availability and delays in meeting the requirements of the services.

Thirdly, the OEFG suffers from low productivity. The OEFG employs 11,912 personnel and has an annual sale of Rupees 826.73 crores. The Output per Person Engaged by the OEFG works out to Rupees 6.94 lakhs, which is just 16 percent of the domestic industry’s average Output per Person Engaged, which stands at Rupees 43.00 lakhs[ii]. The low productivity implies low return on the investment which the government has made in the defence sector. It also means that the defence suppliers are inefficient, and this indirectly inflates the defence budget without yielding commensurate capability.

Fourthly, the factories of the OEFG under-utilise their capacity. The percentage of underutilisation in OEFC ranges from 53 to 63 percent, in OPF from 45 to 53 per cent, and in OCFS from 16 to 69 per cent. As per the analysis of the Comptroller and Auditor General (CAG), the underutilisation of machine-hours is attributable to working of machines on single shift basis, delayed procurement of input materials, as well as offloading of jobs to trade. The under-utilization implies high fixed production over-heads, which in turn increases the cost of production.

Fifthly, the OEFG tends to offload manufacturing, the primary reason for which it exists. The CAG in its reports has observed that the OEFG resorted to trade assistance (euphemism for avoiding the primary responsibility) amounting to Rupees 8.28 crores, as it accepted targets beyond capacity; and for Rupees 11.65 crores even when it had unutilised capacity to manufacture. If the end supplier is trade, then why doesn’t the DGOS place its orders directly on trade, rather than approaching it through a circuitous route, which imposes a stiff penalty both in terms of time and cost?

Sixthly, the OEFG products are very costly. COD Kanpur procured Trouser PW PC Khaki for Rupees 195 against the factory price of Rupees 772 and Vest Woollen FS for Rupees 122 against the factory price of Rupees 632 in 2009-10. The cost of these two OEFG items was as high as 396 and 518 per cent of the market rate. Director General Sashastra Seema Bal, a customer of the OEFG, has observed that the rates of OEFG products are as high as 300 per cent compared to market rates. The variation in costs amongst different factories and also that made over the years is alarming. The labour cost of Fly Outer of Tent 4M manufactured by OCFA is Rupees 90.35, whereas the OEFC charges Rupees 2,836.21 (3039 per cent of OCFA cost) for the same item, in the same production period. Similarly, the production overhead charged by the OCFA is Rupees 159.84 and that by the OEFC is Rupees 3634.45, a variation of 2174%. Further, in OEFH, material cost for Tent 4M increased from Rupees 409 in 2009-10 to Rupees 39,477 in 2010-11.

Seventhly, the OEFG products lack quality. A product is categorised as Returned for Rectification (RFR) when it is put up for final acceptance and the Quality Assurance representative returns the product for rectification, as it fails to fulfil the criteria for the final acceptance. RFR beyond 20 per cent and up to 100 per cent was recorded by the audit in 72 out of 266 instances in respect of 31 items during 2008-12. Items which are not rectifiable are declared as finally rejected. In 2009-10, a total of 53,190 pairs Boot High Ankle valuing Rupees 10.17 crore were rejected for less hardness and less percentage of polymer content in sole. At OCFS, 40,000 blankets worth Rupees 2.35 crore were rejected due to overweight/underweight during 2004-05 to 2008-09. Similarly Mosquito nets, Blankets, Jerseys and Trousers worth Rupees 1.49 crore were rejected during 2009-10 and 2010-11 due to poor workmanship and finish, shade variation, incorrect dimension, loose texture, weight variation, damaged fabric, etc. Rejections also occur at the consignee end. Coat ICK worth Rupees 22.48 crore received by the Army till March 2007 from OPF, OCFS and OEFH are lying in rejected state (as of July 2012). The figures undoubtedly indicate a systemic failure of the quality control mechanism.

The government should indulge in the business of production only if there are very compelling reasons for it to do so. The reasons for which the equipment factories were established are no longer pertinent. A strong case exists for the government to consider disinvestment in the OEFG, and Services should rightfully procure its low tech needs directly from the trade. This shall reduce procurement costs and order fulfilment time, and enhance customer satisfaction. The fiscal liability of sustaining the public component of the defence industrial base would also reduce substantially. The manpower of the OEFG can be rationalised amongst the balance 34 Ordnance Factories, and can also be employed in factories coming up at Nalanda and Korwa. The physical assets of the OEFG should be used to set up Public Private Partnerships for producing high tech equipment. Such a course of action will bring in much needed reforms in the defence industrial base and shall also motivate the Ordnance Factories to perform.


The author is Senior Fellow at CLAWS. Views expressed are personal.


[i] The data contained in the entire article has been extracted from Report No.-24 of 2013-Union Government (Department of Defence) - Report of the Comptroller and Auditor General of India on Performance Audit of Performance of Ordnance Equipment Group of Factories


[ii] Annual Survey of Industries 2011-12, Ministry of Statistics and Programme Implementation, Govt. of India

- See more at: http://www.claws.in/1209/seven-reasons- ... Jqvdt.dpuf



ramana
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Re: OFB, MoD Companies Discussion Thread

Postby ramana » 03 Nov 2016 00:43

One more overview of the OFB:

http://www.claws.in/1197/ordnance-facto ... viraj.html

Ordnance Factory Board: A New Paradigm Needed


May 15, 2014 By Vaishnavi Viraj

The year 1775 marked the beginning of the First Anglo-Maratha War (1775–1782). This was the first of three Anglo-Maratha wars fought between the British East India Company and the Maratha Empire in India. It was in this year that the British forces established the first Army Ordnance Factory in India to manufacture military weapons, gain economic interest and strengthen their political power in India. They found it convenient and advantageous to manufacture their war waging requirements within the country rather than transport them from across the oceans. The fledging start to the establishment of a defence industrial base in India grew with time and peaked in the first half of the twentieth century, to sustain the forces in World War I and II. When India became independent, it had a well-established defence industrial base. This was given a fillip post-independence, with the establishment of a large number of ordnance factories working under the Ordnance Factory Board (OFB).

The Indian ordnance factories are an industrial set up engaged in production, testing, research, development and marketing of a comprehensive product range. The vast array of products include weapons, ammunition, explosives, propellants, chemicals, military vehicles and civilian arms and ammunition. They also manufacture support equipment, clothes, troop comfort and general stores among other items. As of now, the OFB has 41 factories, nine training institutes, three regional marketing centres and four regional controllerates of safety. The OFB operates under the Ministry of Defence and is one of the largest government-run industries in India.


Given such a set up, and the head-start the country had at the time of independence, it seems surprising that India is today the largest importer of weapons in the world, producing barely 30 percent of its defence requirements indigenously. For the last three decades, government policy pronouncements have repeatedly emphasised the need to reduce the country’s dependence on imports to a more reasonable 30 percent, and acquire indigenous capability to manufacture up to 70 per cent of the country’s defence needs. This has remained a chimera, despite the political leadership being cognizant of the requirements. Even the products manufactured by the OFB have serious shortcomings, the most glaring example being the manufacture of small arms. The Indian Armed Forces still are not equipped with a world-class rifle, something which even a small country like Singapore, has been able to manufacture. What then ails the OFB? And what needs to be done to revitalise the defence industrial base?


Organisationally, the OFB has no representation from the users, who remain a captive market. This perhaps remains a fundamental weakness as the users have no option but to purchase their requirements from the government controlled factories. Lack of competition breeds its own inefficiencies and results in poor quality and exorbitantly priced products. Similar products, of superior quality and lower cost can be made available from the private sector, but what would happen then to the large workforce already employed by the government? In 1991, with the ushering in of economic reforms, the nation saw an upward growth trajectory, which continues until date. However, in this heartwarming growth story, the contribution of the OFB has been miniscule. A vibrant defence sector could have added greatly to India’s economic success story, but a lot needs to be done to revitalise this sector. As a start, a performance audit of the OFB must be carried out. Many products manufactured by the OFB, are low-end technology items. Manufacturing capability in support equipment, clothes, troop comfort and general stores, currently the preserve of the OFB, can be better handled by the private sector, which has the capability and the capacity to provide superior quality items to the Services, at lower cost. Should the OFB choose to remain in these fields, it should be on a level playing field with the private sector, with the Services having the option to choose the vendor from whom to purchase its requirements. In any case, some of the requirements of the Services being provided by the OFB are in turn obtained by the defence factories from the private sector. Case studies of supply of the ALS vehicles to the forces would provide an apt example of how not to do business. A similar case study of purchase of the Tatra vehicle being provided by a Defence Public Sector Unit (DPSU) would prove interesting.

Even in the manufacture of small arms, ammunition, explosives and the like, the private sector needs to be co-opted into the system in a much larger way. This would revitalise the defence industrial base in the country and could further rejuvenate the economy. The mission of the Indian Ordnance Factory is “Production of state of the art battlefield equipment”, but through the years, due to lack of competition and an absence of performance audits, the ability of the OFB to deliver quality products at competitive prices has seriously eroded. The work force involved in the factories is extremely large, cost per worker is well above industry standards, and there is a lack of accountability in the system.

Perhaps the time has come to question the relevance of the OFB in view of the potential capability of the private sector to produce most of the requirements of the Armed Forces. The key focus of the OFB must shift to upper end technology items and to those items, which for security reasons, the government would prefer to exercise total control. Such control can be exercised over the private sector also, to ensure security requirements as is being done in many countries across the globe. However, the government may choose to keep specified items outside the purview of the private sector. Appropriate policies need to be framed to chart out a bold new course for the coming years, where the role of government would be advisory and providing broad guidelines rather than on being engaged in business.

With Indian industry coming of age, the OFB could leverage the strength of the private sector to enable the growth of a strong defence industrial base. Indian policy since independence has emphasised the non-violent character of the Indian state, which ipso fact has led to policies that have prevented the growth of the defence sector. This needs to change. Over time, India should aim to become a leading exporter of arms and ammunition. Given India’s geo-strategic location, a strong and powerful India could contribute immensely to regional stability. The disconnect between the user, the decision maker and the producer needs to be looked into, with much greater user interface being mandated in all matters pertaining to the production and purchase of defence equipment. Accountability and transparency must be inbuilt into future structures to ensure that the nation gets the best available product for its Armed Forces within its limited resources. It is but natural that vested interests within the system will be opposed to change. That would remain the primary challenge in revitalising the Indian defence sector.


The author is an intern at CLAWS. Views expressed are personal.

- See more at: http://www.claws.in/1197/ordnance-facto ... K3UH4.dpuf

Gyan
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Re: OFB, MoD Companies Discussion Thread

Postby Gyan » 03 Nov 2016 09:39

DPSUs are not better in any way. Against the target of 500 Akash missiles BDL produced around 80 by 2015.
BEL has not been able to upgrade NVD technology and only imports new technology after every few years like XR5 now.
ECIL cannot produce ANY electronic fuzes at all.
HAL has f... ked up the production of LCA by failing to set up mandated production line.

ramana
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Re: OFB, MoD Companies Discussion Thread

Postby ramana » 03 Nov 2016 22:22

^^^ These are from CAG reports?

Gyan
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Re: OFB, MoD Companies Discussion Thread

Postby Gyan » 05 Nov 2016 21:01

Yes

JayS
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Re: OFB, MoD Companies Discussion Thread

Postby JayS » 06 Nov 2016 02:45

Gyan wrote:DPSUs are not better in any way. Against the target of 500 Akash missiles BDL produced around 80 by 2015.
BEL has not been able to upgrade NVD technology and only imports new technology after every few years like XR5 now.
ECIL cannot produce ANY electronic fuzes at all.
HAL has f... ked up the production of LCA by failing to set up mandated production line.


The HAL one, is it from new one or the old CAG report?? Could you please link?? The one which pulled HAL for Mk1 line since 2005 or so is known.

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Re: OFB, MoD Companies Discussion Thread

Postby Karan M » 06 Nov 2016 03:06

Other DPSUs are miles ahead of OFB and thats a fact. They may have the occasional misstep or failure or usual MOD driven conservatism regarding RandD but far far ahead of OFB.

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Re: OFB, MoD Companies Discussion Thread

Postby shiv » 06 Nov 2016 06:36

ramana - thanks for starting this thread but I am sending a pvt message to admins as well about the name. I think the name of the thread on BRF should be much more attention grabbing - the name is too tame - Something like "Ordnance Factories - fountain of inefficiency" or something of the sort.

ramana
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Re: OFB, MoD Companies Discussion Thread

Postby ramana » 06 Nov 2016 08:27

While I too would like to outrage, I realize OFB also dose a good job most of the time and is India's Olympic war fighting supply chain. Hence the thread title.
Happy Diwali.

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Re: OFB, MoD Companies Discussion Thread

Postby shiv » 06 Nov 2016 08:51

You are too kind ramana. The good job is a parasitic good job - but let the discussion move on and let us get facts on the table

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Re: OFB, MoD Companies Discussion Thread

Postby Gyan » 06 Nov 2016 11:21

Personally I believe that OFB and DPSU failure is primarily due to Babu & IAS lobby and unionisation is only a minor factor. Improper ToT contracts, lack of R&D facilities, poor co ordination with DRDO and Military interfaced by Babus is not due to OFB.

Minor example, in the ongoing skirmishes on the border, Vidhwanask anti material rifle (even though heavy) would have great utility. No orders by Army because it would be more lucrative to order Rs. 1000 crore imports.

We have to live with corruption, it is not going away. My primary grouse is that corruption does not prevent giving orders for essential spare parts, simulators, ammo etc; it is due to gross outright incompetence of IAS lobby bordering on treason. What difference would it make to Rafale deal or to MODI if 1000 vidhawansk were also ordered for actual use & immediate need on the border?

It's a matter of astounding incompetence that rather than having spare war time capacities, we can not manufacture basics like Carl Gustafs, MMGs, HMGs, sniper rifles even at peacetime requirement level.

I blame only and only IAS lobby for this. No politician will hesitate in signing off on few hundred crores worth of essential capacity building excsecise. IF RM/DM wants to make money, he has no need to incapacitate the military.

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Re: OFB, MoD Companies Discussion Thread

Postby shiv » 06 Nov 2016 16:36

Not out of place on this thread..
ShauryaT wrote:
shiv wrote:I believe it is better to be realistic rather than romantic. Our PSUs are cobweb riddled monsters who are a protected strategic racket. The only way to break free is to avoid war and build up private industry. After AMCA HAL should get NOTHING. Do not place orders with a monster company that is a hallmark of government inefficiency that only looks good in comparison with OFB
I could not agree more. The only thing I will add is expedite this process. Disinvest HAL, OFB and DPSU's now - along with appropriate DRDO labs to create this private MIC. You are also right in stating the political headwinds to do so would be great on an administration.

Not related to this thread directly, but for folks who want a fresh read. Attached is a link on what kind or racket the PSU's are. https://www.newslaundry.com/2015/08/26/ ... estigation
Ofcourse there have been many other works documenting the racket in great detail. Very Very few in the political class will want to eliminate this gravy train. Fewer still would want to take on the entrenched interests. The handful who have tried are called fools and failures. But to me they are the bravest of the brave. In this case, looking for someone to bomb the MoD. Sadly Parikkar-Modi duo are not that combination.

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Re: OFB, MoD Companies Discussion Thread

Postby Yagnasri » 06 Nov 2016 17:11

The first step is to get out of areas wherein private sector can step in take the work. Secondly is to make the units at least as companies and divest some portion of the equity - maybe 51% and GOI just act as an investor and nothing else. All purchases shall be open tenders wherein private, and GOI units compete. Further MOD shall not be overseeing the ministry of these units. This overseeing is the root of all the evil.


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