Rs 8000 crore investment opportunity for private sector through GOCO

Lt Gen R R Nimbhorkar, UYSM, AVSM, SM**, VSM, Master General of Ordnance (MGO), Indian Army revealed that the Army is planning to operationalise GOCO (Government Owned, Contractor Operated) system for the procurement and maintenance of equipment. This will create investment opportunities of Rs 8000-9000 crores for private players. He was speaking at the 2nd edition of a seminar OFB-Industry Partnership for Vendor Development and Outsourcing by OFs organised by the Ordnance Factory Board (OFB) in association with Confederation of Indian Industry (CII) on 13th & 14th November 2017 in New Delhi.

78% of MGO's budget goes to Ordnance Factories and it is imperative for Indian industry to partner with OFB, added the General. India is one of the largest importers of defence goods in the world, and OFB aims for self-reliance under Make in India. General Nimbhorkar also urged Indian industry to move towards BIS standards.

Shri S C Bajpai, Director General, Ordnance Factory and Chairman, Ordnance Factory Board, noted that emerging technologies pose challenges. He stressed that public private partnerships is an imperative. The DGOF hinted that the new procurement manual may emphasize on quality and import substitution, and requirement for L1 or lowest tender cost may shift. The new manual will focus on scale of orders and the continuity.

Mr Bajpai gave several examples where Indian industry has indigenised products that were being imported at a much cheaper cost.

Mr Baba N Kalyani, Chairman, CII National Committee on Defence & CMD, Bharat Forge Ltd said that high stress has been laid on indigenisation of defence products. He added that industry is looking at a better alternative to L1 and urged OFB to work out a mechanism for the same.

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