sudhir007
SENIOR MEMBER
- Joined
- Jul 6, 2009
- Messages
- 4,728
- Reaction score
- 1
MoD plans to invest Rs 15k cr in ordnance firm
Sending a strong signal to foreign arms suppliers often accused of adopting short cuts to bag lucrative military contracts, the Ministry of Defence (MoD) for the first time has invoked “integrity pact” to recover Rs 244 crore from Israel Military Industries (IMI) before blacklisting the company on corruption charges.
In 2007, the IMI emerged as the supplier of technology to produce bi modular charge system – a propellent required for ammunition – in India’s latest ordnance factory that was to come up at Nalanda at a cost of Rs 2,160 crore.
But, with allegations of corruption flying thick, the MoD on March 5 blacklisted IMI along with five other military firms.
Before blacklisting, the ministry invoked integrity pact to recover Rs 244 crore, clearly conveying to the arms lobby that “breach of contract terms” would not be tolerated, said an official. Almost six years ago, the defence ministry introduced integrity pact as an integral part of all defence deals worth Rs 100 crore and offset contracts worth more than Rs 300 crore. The aim was to remove any scope for foul play in high worth arms deals.
After reviewing the performance of ordnance factory board, Defence Minister A K Antony on Monday decided to pump in Rs 15,764 crore in the OFB over the next five years to upgrade its manufacturing and production capability.
Significantly, high investment in the OFB in the 12th Plan signals the government’s definitive shift towards self-reliance and gradually reducing dependence on foreign arms supplies.
Some of the major OFB projects approved include a Rs 971-crore scheme to augment production capacity of T-90 tanks from the present 100 tanks to 140 tanks at Heavy Vehicles Factory at Avadi, Tamil Nadu; a Rs 378-crore project to produce large calibre artillery guns and a Rs 378-crore plan to manufacture spares for T-72 and T-90 tanks.
With no artillery purchase since the Bofors contract, the OFB claims to have developed long range artillery guns based on the original technology transfer agreement from Bofors.
The home-made guns are under trials and OFB plans to make 300 of them by 2015, sources said.
For the ammunition propellant, the defence ministry planned to set up a new ordnance factory at Nalanda as the proposal was in limbo for the last 11 years after the ministry blacklisted two foreign firms which were to transfer the crucial technology.
New outfit
The Nalanda ordnance factory was likely to become operational this year, an official said, adding that the pilot batch of bimodular charge systems had been assembled at ordnance factory in association with Defence research and development organisation and would be offered to Army for trials shortly.
The plant for bulk production will be set up by OFB using indigenous resources at half the cost proposed by foreign companies. The defence ministry relied on two foreign suppliers for the technology – South African firm Denel, whose subsidiary Somchem was to provide the technology, and subsequently IMI. But it blacklisted both following corruption
Sending a strong signal to foreign arms suppliers often accused of adopting short cuts to bag lucrative military contracts, the Ministry of Defence (MoD) for the first time has invoked “integrity pact” to recover Rs 244 crore from Israel Military Industries (IMI) before blacklisting the company on corruption charges.
In 2007, the IMI emerged as the supplier of technology to produce bi modular charge system – a propellent required for ammunition – in India’s latest ordnance factory that was to come up at Nalanda at a cost of Rs 2,160 crore.
But, with allegations of corruption flying thick, the MoD on March 5 blacklisted IMI along with five other military firms.
Before blacklisting, the ministry invoked integrity pact to recover Rs 244 crore, clearly conveying to the arms lobby that “breach of contract terms” would not be tolerated, said an official. Almost six years ago, the defence ministry introduced integrity pact as an integral part of all defence deals worth Rs 100 crore and offset contracts worth more than Rs 300 crore. The aim was to remove any scope for foul play in high worth arms deals.
After reviewing the performance of ordnance factory board, Defence Minister A K Antony on Monday decided to pump in Rs 15,764 crore in the OFB over the next five years to upgrade its manufacturing and production capability.
Significantly, high investment in the OFB in the 12th Plan signals the government’s definitive shift towards self-reliance and gradually reducing dependence on foreign arms supplies.
Some of the major OFB projects approved include a Rs 971-crore scheme to augment production capacity of T-90 tanks from the present 100 tanks to 140 tanks at Heavy Vehicles Factory at Avadi, Tamil Nadu; a Rs 378-crore project to produce large calibre artillery guns and a Rs 378-crore plan to manufacture spares for T-72 and T-90 tanks.
With no artillery purchase since the Bofors contract, the OFB claims to have developed long range artillery guns based on the original technology transfer agreement from Bofors.
The home-made guns are under trials and OFB plans to make 300 of them by 2015, sources said.
For the ammunition propellant, the defence ministry planned to set up a new ordnance factory at Nalanda as the proposal was in limbo for the last 11 years after the ministry blacklisted two foreign firms which were to transfer the crucial technology.
New outfit
The Nalanda ordnance factory was likely to become operational this year, an official said, adding that the pilot batch of bimodular charge systems had been assembled at ordnance factory in association with Defence research and development organisation and would be offered to Army for trials shortly.
The plant for bulk production will be set up by OFB using indigenous resources at half the cost proposed by foreign companies. The defence ministry relied on two foreign suppliers for the technology – South African firm Denel, whose subsidiary Somchem was to provide the technology, and subsequently IMI. But it blacklisted both following corruption
