Defence ministry clears procurement proposals worth Rs 21,000 crore
NEW DELHI: Pressing ahead with its policy to promote
domestic military industry, the government on Saturday cleared procurement
proposals worth over Rs 21,000 crore and also okayed a project for the
production of transport aircraft which is open only to Indian private sector
Among the major proposals to receive approval is a Rs
9,000 crore tender to provide five fleet support ships for the Navy, for which
the Request for Proposal (RFP) would be issued to all public and private sector
shipyards, Defence Ministry officials said.
The majority of the proposals cleared would involve
only Indian public and private sector firms and are aimed at increasing the
indigenisation of military hardware, they added.
Chairing his first meeting of the Defence Acquisition
Council (DAC), Defence Minister Arun Jaitley said, “There are many proposals in
the pipeline for the defence forces and, today, we have tried to expedite quite
a few of them.”
Thus, a proposal for supply of 32 HAL-built Advanced
Light Helicopter, ‘Dhruv’, to the Coast Guard and the Navy at a cost of Rs
7,000 crore was also okayed, officials said.
Under the proposal, state-owned Hindustan Aeronautics
Ltd will supply 16 helicopters each to the Coast Guard and the Navy and also
provide maintenance for the machines to ensure the 'highest level of
operational maintenance and efficiency'.
DAC also cleared an IAF proposal for issuance of a
tender for construction of 56 transport aircraft by private industry players to
replace the force's fleet of Avro aircraft, they said.
“This is going to be a significant project in which
the private sector would be the sole player and lead to capacity-building in
the private sector,” Jaitley said in reference to the tender for replacing the
As per the proposal, private Indian defence companies
such as Tata and Mahindra would be issued tender and they would build the
aircraft in partnership with foreign firms.
The proposal was stuck under the previous UPA
government after the then Heavy Industries Minister Praful Patel wrote to the
Defence Ministry against the decision to keep out public sector firms from the
Defence Ministry had referred the matter to the Law
Ministry, which opined in favour of the proposal for capacity-building in the
domestic aerospace sector, Ministry officials said, adding that the tender
would be issued soon.
Under the project, which was cleared earlier and is
expected to cost over Rs 20,000 crore, the first 16 aircraft would be built at
the facilities of the foreign vendor while the remaining 40 aircraft would be
manufactured in India.
This would be the first time that the private sector
would be allowed to manufacture a complete aircraft without participation of
the public sector HAL, the only aerospace firm in the country.
The meeting also cleared the procurement of five Fast
Patrol Vessels (FPV) and Offshore Patrol Vessels (OPV) each for the Coast Guard
at the cost of Rs 2,360 crore.
The FPVs and OPVs would be built by the state-owned
GRSE and Goa Shipyards Ltd, respectively, Ministry officials said. A proposal
to procure Search and Rescue (SAR) equipment for the three services at a cost
of Rs 900 crore, too, received the green light.
The last meeting of the DAC was held on February 24
under the then Defence Minister AK Antony. The NDA government under Prime
Minister Narendra Modi is stressing on indigenisation of the military industry
given that India has to import 70 per cent of its defence hardware.
In its first few days in office, the Modi government
has hiked the FDI limit in defence to 49 per cent from the earlier 26 per cent
and significantly pruned the list of defence items whose production requires