Defence minister Manohar Parrikar has made senior officials of private Indian defence companies heads of five sub-groups to make recommendations on choosing strategic partners in defence. The choice of private defence players and the absence of defence public sector undertakings (DPSUs) from these sub-groups has raised a few eyebrows.
Constituted by the defence ministry on May 24, these sub-groups have to be ready to make their presentations to the defence minister within ten days.
In a consultative meeting with industry associations on April 25, Parrikar had discussed the issue of choosing strategic partners, including their selection criteria, before formulating the final policy. He had decided in that meeting “to have focussed meetings with smaller group for selected platforms”.
The platforms selected for these five sub-groups are: Armoured fighting vehicles (AFV), aircraft and helicopters, submarines, ammunition including smart ammunition, and macro process management of issues. These are consistent with the five platforms recommended by the Aatre committee, except that helicopters and aircraft have been merged in one sub-group, and a separate sub-group created for process management.
Last year, an expert committee headed by former home secretary Dhirendra Singh had recommended the strategic partnership model to help build indigenous defence industry. Following that, a task force headed by former DRDO chief, VK Aatre had spelled out the contours of strategic partnership model.
Aatre committee had identified ten domains for strategic partnership in defence production. In each of these domains, a private Indian defence company was to be selected as a strategic partner on the basis of its financial and technical capabilities. A company could become a strategic partner only in one domain, in which it would be assured of all orders for 20 years.
HS Shankar, chairman & MD of Alpha Design Technologies, a company involved with AFVs has been made head of the AFV sub-group. Sukaran Singh, CEO & MD of Tata Advanced Systems Limited, with a stake in the aeroplane manufacturing industry heads the aircraft and helicopters sub-group.
The submarine sub-group is headed by JD Patil, senior VP and head of defence and aerospace at L&T, which already has a substantial presence in submarine industry. Neeraj Gupta, MD of MKU Pvt Ltd, a company producing ammunition heads the ammunition sub-group. The macro-process management sub-group is headed by Rajinder Bhatia of Bharat Forge.
Representatives of DRDO, defence ministry and the concerned defence service are also part of each of the sub-groups, which also have a member of the Aatre committee.
The choice of chairmen of these sub-groups has caused some consternation in industry circles. “If you are going to decide how to select strategic partners, how can you have the interested player head the sub-group to decide whether it can be a strategic partner or not. This is a blatant conflict of interest,” an industry representative told The Indian Express on condition of anonymity.
Even some defence ministry officials are flummoxed by the absence of DPSUs and the short-time given to these sub-groups to respond. “The first notification was issued on May 20, which didn’t name the head of sub-groups. It was given ten days. Then we had this notification with names of head of each sub-group, and it has been given ten days again,” said an official.
A senior defence ministry official, however, clarified that “this is part of a larger consultation process and no final decision can be taken so quickly. Any proposal we make in the ministry will have to go to other ministries for approval.”
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