On the second day of the DefExpo in Quepem, Goa, Union Minister of Defence Manohar Parrikar argued that it is not able to completely do away with the Ordinance Factory Board (OFB), divest or privatise ordinance manufacturing completely.
“Armed forces are last option for unprecedented eventuality and not used on regular basis. For instance, certain anti-tank missiles and bullets we use once in two years or three, if I give order to private players the moment I cease to give order, he will close down. Only government can afford to maintain (Idol infrastructure) and sustain such kind of capacities for number of years, speculating future requirement. Therefore, its not possible that 100 percent privatization of OFB can be put up in the sector,” he said.
However, Parrikar said that he does understand the needs of the private sector and the problems faced by them from government agencies.
“Everywhere, they (PSU’s) want tendering, and procedure which is not required in private sector. This is why small units are faster and more innovation takes place, unlike big private companies which are as bureaucratic as government bodies. DPP has tried to address the suggestions keeping in mind the SME’s and remove bottlenecks,” he said.
At the same time batting for private investment, Reliance ADAG Chairman Anil Ambani, while hailing the Defence Procurement Policy (DPP) for bringing much-needed reforms, insisted that MOD brings clarity so that private players can make long-term plans in Defence production. According to him, the government must include private investors in large defence deals instead of restricting them to micro projects.
“Private sector must be given more opportunities in the future, especially on the role of contracts under Inter Governmental Agreement (IGA) and Foreign Military Sales (FMS) so we could plans our investments better,” he said.
In certain cases, he said that the private sectors are being kept away from the large scale manufacturers including the PSUs from major defence deals stating lack of experience. “It is vested interest laid to kill competition,” he said while invoking the legacy of Dhirubhai Ambani.
“He was not a chemical engineer nor technologist not had anything to do with oil sector sector, yet he created world’s largest oil and gas company. There would have been no ‘Reliance’ if experience was the sole yard stick. It’s not just the story of one company including some examples that can be even cited now,” he said.
According to him, he said the Public Sector Undertakings (PSUs) must be encouraged to partner with private players or in joint ventures with foreign players. He insisted that the Ministry of Defence (MOD) must not lay over-emphasis on experience but instead give opportunities to newcomers.
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