The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, on Monday announced it had approved the purchase of Rs 3,300 crore of indigenously designed and developed military equipment.
The private sector is up in arms. Despite repeated Ministry of Defence (MoD) assurances that private firms would be allowed to compete for defence contracts on equal terms with the public sector — which includes the Defence Research and Development Organisation (DRDO), eight defence public sector units (DPSUs) and 41 ordnance factories — the DAC has ‘nominated’ the DRDO for designing and developing an indigenous lightweight electronic warfare system for mountains (hereafter, Mountain EW system).
The Mountain EW system “would be designed and developed by DRDO and manufactured by design-cum-production partner from the Indian (private) industry,” announced the MoD.
This denial of a design and development role to the private industry comes even as a private firm, Tata Power (Strategic Engineering Division, or SED), is building two far more complex integrated Mountain EW systems, a global tender it won in 2013 for Rs 926 crore. An amended order was placed in July, which is on track to be delivered in 24 months.
Meanwhile, a public sector partnership between DRDO and Bharat Electronics is floundering in developing two similar systems, for which they were ‘nominated’ by the MoD at twice the price bid by Tata Power (SED).
Federation of Indian Chambers of Commerce & Industry (Ficci) has strongly protested this sidelining of private firms. In a letter addressed directly to Rajnath Singh on October 10, Ficci wrote: “It is understood that serious considerations are being given to nominate (the Mountain EW system tenders) to DRDO/DPSUs, disregarding the private sector having equal, if not better, capability and skill sets in EW technologies,” wrote Ficci.
“Ficci would request your personal intervention to advise that all the EW programme requests for proposals, or tenders, like all other capital acquisition programmes, as issued on competitive tendering basis,” the letter said.
Invoking Tata Power (SED)’s strong, two-decade-old track record in developing EW systems, Ficci wrote: “Private sector companies were involved in developing the critical command and control software and platform engineering for the integrated EW system Samyukta (in the 1990s). This was even acknowledged by Dr A P J Abdul Kalam, then DRDO chief”.
The MoD cites ‘security concerns’ to place orders for EW systems with the DRDO/DPSUs. This has been strongly protested by the private sector, which cites its own stringent security protocols.
“Any security concerns raised to justify DPSU/PSU nomination be discouraged as all ‘A category’ licensed private Indian vendors are covered under the same security guidelines issued by the MoD, as are DPSUs,” wrote Ficci.
Business Standard has reviewed Ficci’s letter to the defence minister.
EW systems are a crucial military force multiplier. They are built around a powerful receiver that picks up, records, and analyses enemy (or militant/terrorist) transmissions to obtain valuable intelligence. Its integrated direction finder establishes the precise location of the enemy transmitter. That location can then be attacked, using aircraft or ground forces. Alternatively, at a crucial stage of battle, the enemy’s transmissions can be disrupted with high-power jammers, throwing his plan into disarray. Good EW systems allow an army to dominate the electromagnetic spectrum.
The Mountain EW system that the DAC cleared on Monday is a lightweight system that can be physically carried to remote locations, or heli-lifted onto high mountains. It is particularly useful in counter-militancy operations.