No separate guidelines for defence PSUs on JVs

Seeking to give defence public sector undertakings (PSUs) a level-playing field in forging partnerships, the government on Wednesday decided to abolish existing guidelines for establishing joint venture (JV) companies by such enterprises.

The decision, taken by the Cabinet, will help defence PSUs such as Mazagon Dock, Goa Shipyard, Garden REach Shipbuilders & Engineers, Bharat Electronics, Hindustan Aeronautics, Bharat Earth Movers, Bharat Dyanamics, Mishra Dhatu Nigam, and Hindustan Shipyard.

These guidelines, notified in February 2012, will not be required for separate JV by the defence PSUs.

The guidelines issued by the department of public enterprises and the finance ministry from time to time, which are applicable to all central public sector enterprises, will be applicable for the defence PSUs to set up JV companies now.

“This will meet the goal of indigenisation and self reliance in this sector,” said an official statement. The abolition of the existing JV guidelines will provide a level-playing field between defence PSUs and the private sector.

“It will allow defence PSUs to forge partnerships in an innovative manner enhancing self-reliance in defence and provide for enhanced accountability and autonomy of defence PSUs in ensuring that the process of JV formation is effectively managed by them, to secure best outcomes in the interest of national security,” it added.

The decision comes against the backdrop of the issues which emerged in the operationalisation of JV guidelines of defence PSUs. The Department of Defence Production came to the conclusion that with the increasing participation of the private sector in the defence sector and the transformation taking place in the defence acquisition ecosystem, the requirement of having separate JV guidelines for defence PSUs is no longer considered necessary.

“In the emerging scenario with primacy being accorded to indigenous manufacturing / Make in India, it is felt that having multiple sets of guidelines may lead to ambiguity and incongruity in the environment," the statement noted.

OTHER CABINET DECISION

• A Cabinet deferred decision on road safety Bill. The draft Bill, which will amend the Motor Vehicles Act, also proposes stringent measures against automakers for faulty designs of vehicles, sources said.
   
• The revised cost estimate of Rs 3,727.30 crore for the National Automotive Testing and R&D Infrastructure Project approved.
   
• Policy for award of waterfront and associated land to port-dependent industries in major ports and its operationalisation approved
   
• Cabinet decided to rescind the earlier decision of the government to set up the concurrent evaluation office for managing concurrent evaluation network in the rural development ministry
   
• Cabinet approved the establishment of a new All India Institute Of Medical Science at Bhatinda in Punjab