THE Ministry of Defence on Thursday said that it has selected a KPMG Advisory Services- led consortium as the consultant for corporatisation of the Ordnance Factory Board (OFB).
In a press statement, the MoD stated, “Consequent to evaluation of the technical and financial proposals of the bidders, the Department has selected M/s KPMG Advisory Services Pvt Ltd, the Lead Consortium Member with M/s Khaitan & Co Ltd as Consortium Member, as the Consultancy Agency for the said project. The contract with the consultancy agency would be signed shortly and subsequently, the consultancy agency would commence its services as per the terms and conditions of the contract.”
The three main federations of the workers have said that they will go on indefinite nationwide strike on October 12, as announced earlier, and have pointed to complaints to Central Vigilance Commission about alleged irregularities in the bids called for selection of the consultant.
In the first week of July, the Department of Defence Production (DDP) of the MoD had invited Expression of Interest (EOI) cum Request for Proposal (RFP) for the selection of a consultant for strategising and implementing the proposed corporatisation.
The three main federations of the workers, which represent over 85 per cent of the 82,000 workforce from 41 ordnance factories across the country, have strongly opposed the proposal of corporatisation since its inception.
The strike ballot called by these federations against the proposal had concluded June 17 and workers had voted in favour of a nationwide strike against the corporatisation. On July 19, the federations had jointly announced that they will go on strike from October 12.
The office-bearers of the three federations — Bhartiya Pratiraksha Mazdoor Sangh (BPMS) — an arm of RSS affiliate Bharatiya Mazdoor Sangh, federation of Left unions All India Defence Employees’ Federation (AIDEF) and the Indian National Defence Workers’ Federation (INDWF) of the Congress’s INTUC – said they will comment on specifics of the appointment of the consultant after studying the details of the said entity.
BPMS general secretary Mukesh Singh said, “We are firm on our stand against corporatisation and will go on strike as planned on October 12. Three federations will issue a joint statement on this announcement of selection of the consultant after studying it and discussing it with other federations.”
C Srikumar, general cecretary of AIDEF, said, “There were two complaints which were filed with the Central Vigilance Commission about the irregularities in EOI cum RFP. This shows that there were serious problems with the process itself. Three federations had jointly written to the defence minister and also the President of India, seeking intervention in the process.”
As part of the Atmanirbhar Bharat package, Finance Minister Nirmala Sitharaman had in May announced the decision of corporatisation of OFB for “improving autonomy, accountability and efficiency in ordnance suppliers”.
The three federations have argued that a corporate entity would not be able to survive the unique market environment of defence products, which have very unstable demand and supply dynamics.
The MoD invitation for EOI cum RFP had said, “The consultant shall work in close interaction with the DDP to produce a comprehensive report for corporatisation of OFB, keeping in mind the background and goals. This must enable the DDP to determine the best-suited model for converting OFB into one or more corporate entity(ies), in light of the existing financial, legal, operational and economic scenario…”.