Self-reliance needs tough decision
By Maj Gen Rajan Kochhar (Retd)
The Indian Army’s recent internal report figured in the print media highlighting the poor quality of ammunition manufactured by the Ordnance Factory Board (OFB) in the past six years which resulted in over 400 accidents from 2014 to 2019. The Indian Army said in its report to the Ministry of Defence (MoD) that Rs 960 crores was spent on poor quality ammunition and mines produced by the state owned OFB during this period. In a major fire incident in a major Army ammunition depot as many as 16 Army personnel lost their lives which included two officers. The report clearly indicted the sub-optimal efficiency, lack of accountability and poor quality control resulting in frequent ammunition failures and accidents.
It is obvious that defective ammunition has major implications for the soldiers using them, as accidents lead to loss of life, but also equipment being rendered out of action, resulting in lack of confidence in the equipment itself. A senior government official said that this also has serious operational ramifications wherein requisite ammunition is not available to optimally utilise the capability of the equipment. Further, it also leads to the need for re-inspections, back-loading, reissue and disposal by destruction of ammunition -- an exercise which is extremely time-consuming, expensive, dangerous and totally avoidable.
The report of the Comptroller and Auditor General (CAG) of 2019, tabled in the house of Parliament brings out that a significant quantity of the Army’s demand for some principal ammunition items remained outstanding thus adversely affecting their operational preparedness. The factories achieved the production targets for only 49 percent of items in the financial year 2017-18. Further, the production targets were revised several times mid-year either at the instance of the users due to changes in their priority and budgetary allocation or by the factories themselves owing to their production constraints. In 19 out of 49 cases of upward revision of targets, the factories failed to achieve even the original targets. In 32 cases of downward revision, the factories could not meet the revised targets in 22 cases.
On account of the above factors, there were slippages in the issue of related ammunition/spares filled fuzes to the users leading to a critical deficiency of seven types of ammunition (Ranging from 32 to 74 percent). Due to the non-availability of these fuzes, the Army had stock of worth Rs 403.27 crores of ammunition lying in an unusable condition. This is just the tip of the iceberg as critical availability of ammunition especially Tank and Artillery ammunition has seriously impacted the operation preparedness of the Indian Army. The resultant effect has been our resorting to emergent procurement from other countries at exorbitant costs as was evident during the Kargil war and with the Chinese incursions into Ladakh.
These calls for a serious reality check and the initiative of the Government of India to corporatize the OFB couldn’t have come at a better time. We need to therefore take a stock of the present situation, wherein we have eleven (11) ordnance factories involved in the manufacture of ammunition and explosives. These factories presently work under the administrative control of the Department of Defence Production of the MoD.
The corporatisation of the OFB will turn it into a Defence Public Sector Undertaking (DPSU) under the administrative control of the Department of Defence Production (DDP) of the MoD. This is far from privatising the organisation as some would seem to suggest. As a DPSU, and with 100 per cent equity stake by the central government, the OFB will have far greater autonomy in decision making. It will be managed by its own board of directors; and subject to broad guidelines issued by the government; it can also make its own financial/investment plans, form joint ventures/subsidiaries and articulate R&D roadmap without much interference from external agencies.
Many of the government appointed committees such as Raman Puri Committee, TKA Nair Committee and Vijay Kelkar Committee have suggested reforms for the OFB over the past two decades but none of their recommendations were implemented. The country cannot be subjected any longer to this malaise and calls for immediate corrective measures lest we allow ourselves to plunge in an abyss of uncertainty and despair.
It seems a very sad reflection that the Ordnance Factories entrusted with the manufacture of ammunition have not been able to deliver even non high tech ammunition such as Anti tank/Anti personnel mines. The exudation of mines produced by them has always remained a problem. The issue basically related to the quality of TNT manufactured.
It is indeed ironical that the very same mines which are imported never exude. To overcome this problem, a study ordered by the Indian Army suggested that the mines be manufactured having a mix of TNT and RDX. This would give the much needed stability to these while kept in storage for prolonged periods. The proposal got mired down in vacillation of our system with the file moving between MoD, defence research and development organisation(DRDO) and director general of quality assurance (DGQA), and the outcome is yet to see the light of the day.
Another example is the issue of manufacture of igniters set(4 seconds and 7 seconds) used for the Hand Grenades 36M. This item is an extremely low tech item but the Ordnance factories failed to meet the requirement of the Indian Army. The resultant effect was the training at our military academies got affected. This problem took almost four years to resolve.
Today there are deficiencies in Fin Stabilized Armour Piercing Discarding Sabot (FSAPDS) and L-70 ammunition as also ammunition for new generation weapons like anti-material rifle (AMR).
Why this requirement cannot be taken on by the Private Sector? Unfortunately, the bureaucracy seems to look for routes shorter than a straight line and often intelligence overrides wisdom. Today the ease of doing business is just not there.
One is reminded of a case of procurement of a particular type of ammunition where the file had to go for the technical evaluation of bids to the Financial Adviser MoD. The file was returned with an observation that the Performance Bank Guarantee (PBG) undertaken by the L1 firm was not from a nationalised bank. Banks like ICICI/HDFC/Axis etc were not acceptable to the Ministry. This would have resulted in another two years delay. The firm took the case to the Court and got the judgement in their favour. The PBG was then accepted by the Ministry.
In the present scheme of things for a firm to obtain license for manufacture of ammunition, it has to interact with a number of ministries in the government. There is no system of a single window clearance. It is therefore necessary that a system be put into place to incorporate the following.
- Establishment of an Empowered Committee to clear all proposals for manufacture/procurement of ammunition/explosives.
- Establishment of a single window for all types of clearances required.
- Assured orders (in terms of number of rounds/items) to the firms undertaking manufacture for at least a period of ten years from the Indian Army. The firm may also be allowed to import items/raw- material in the first two years of its production, till such time its own production line stabilises.
- Units of the Indian Army are designated where trials of the manufactured ammunition are undertaken.
- A system of self certification is put into place, with guarantees to replace defective ammunition within two months. The role of DGQA is done away with.
- All ammunition which is being procured on an emergent basis from other countries is offered to these firms for indigenous manufacture.
The Govt of India has come out with a list of 101 defence related items which have been banned from imports. These items are taken up for manufacture by the Private Sector under the aegis of an Empowered Committee.
The negative list of 101 items is a comprehensive one. It includes not just simple projects like water jet fast attack craft and offshore patrol vessel, but a host of complex weapons and platforms such as assault rifles, artillery guns, missile corvettes, attack helicopters, fighter and trainer aircraft and small transport planes.
Among all the listed weapons and platforms, 69 items are banned for import from December 11, 2020, 4 from December 2020, 8 each from 2023 and 2024, and one (long range land attack cruise missile) from December 2025.
The staggering timelines seem to be driven by the current developmental status of various projects being undertaken by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), Ordnance Factory Board (OFB) and the private sector at large.
We need to therefore, gear ourselves up to rise to this challenge. The manufacturing sector has to build up its processes and contribute 25 per cent to the GDP in the coming years. Procedural and regulatory clearances have to hasten up. The present state of being ranked ’low on the ease of doing business’ needs to improve. It is high time that we put our house in order; otherwise we will miss the bus.
*Author is an Indian Army Veteran. Views expressed here are personal.