MoD approves procurement worth Rs 20,000 cr for forces

Sources said besides discussions on new purchases,Antony held an extensive session on creating a more competitive process of procurements.

Written by Manu Pubby | New Delhi | Published: June 23, 2012 1:42:32 am

In a marathon meeting on Friday,the Defence Ministry cleared procurements worth over Rs 20,000 crore for the three armed forces and decided to do away with the ‘nomination method’ of buying equipment from Public Sector Units (PSUs) without a competitive process.

Several crucial projects,including air defence missiles for the Army,transport aircraft and command and control systems for the Air Force and new guns for the Navy were discussed at the Defence Acquisition Council (DAC) meet chaired by Defence Minister A K Antony.

Sources said besides discussions on new purchases,Antony held an extensive session on creating a more competitive process of procurements. A key decision has now been formalised to do away with the nomination process of procurement in which a Defence Public Sector Unit is identified as a nodal agency for purchasing a certain type of equipment.

For example,in the case of the Tatra controversy,Defence PSU BEML was nominated to supply trucks for the Army without competitive bidding.

The DAC decided that in all further contracts,greater competition would be encouraged by doing away with the nomination process and calling in players to bid for the contract as a Partner Agency. “Unless it is operationally important,nomination should be discouraged,” Antony is believed to have said at the meeting.

The biggest contract cleared by the DAC was a Rs 12,000-crore proposal of the Army to procure new generation air defence missiles to replace its ageing Russian systems. As reported by The Indian Express,a go-ahead was given to procure eight regiments of Quick Reaction Surface to Air Missiles (QRSAMs). A global hunt for the new systems will now commence. This is the largest-ever global tender floated by the Army.

The transport wing of the Air Force will also get a boost as its proposal to purchase an additional 14 Dornier aircraft for an estimated Rs 1,000 crore was cleared. The Navy and Coast Guard will get 120 new guns for its surface fleet at an estimated Rs 1,500 crore.

The DAC was also to clear a proposal by the Army to buy 1,300 light bullet-proof vehicles but it was unclear whether this was approved.

The air defence network of the Air Force will also get a major upgrade with the DAC clearing the crucial Integrated Air Command and Control System (IACCS). Sources said the ministry cleared the procurement of equipment required to set up IACCS nodes throughout the country for an estimated Rs 7,000 crore. The equipment will be manufactured by a Defence PSU.

The IACCS is crucial as it controls the air defence operations of the Air Force by integrating both ground-based and airborne sensors with air defence weapon systems,giving decision makers a complete “situational picture” of the combat zone.

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