GM OFPM arested

Bureau of Investigation team on Wednesday arrested V.K. Panda, the general manager of the Defence Ministry’s Ordnance Factory at Medak near Hyderabad, after he was summoned to the city as part of an investigation into irregularities in a deal for supply of battle tank parts. Four officials of two forgings companies, who too were summoned here, were arrested in connection with the scam. They are S. Shanavas, managing director of Steel and Industrial Forgings Ltd, (SIFL), Thrissur; A. Valsan, senior manager of SIFL; Muralidhar Bhagvat, former managing director of AMW-MGM Forgings in Mysore; and K.R. Mugilan, a manager in the same company.

The CBI had earlier sought the Defence Ministry’s permission to arraign Panda as an accused in the case. He had allegedly been in touch with defence consultant Subi Mally, who is believed to have facilitated an agreement between Panda and SIFL to award a contract to the forgings company. He allegedly accepted Rs.3 lakh as bribe for the deal.

Shanavas and Valsan had earlier been named second and third accused respectively in the case. The duo allegedly conspired with Subi Mally, the fourth accused, to manipulate deals between SIFL and the ordnance factories at Medak and another at Avadi.

They also allegedly received a part of the commission that Ms. Mally collected for her role in the deal. A portion of this sum had been recovered from Mr. Shanavas’ residence by the CBI in a search earlier.

Ms. Mally has already been arrested and interrogated by the CBI. CBI officials said the arrests on Wednesday were made on the basis of information given by Ms. Mally and other evidence.

Ms. Mally allegedly acted as a mediator between ordnance factories and forgings companies like SIFL and AMW-MGM.

The five arrested will be produced before the CBI special court in the city on Thursday

OFB moderisation plan

Kolkata, March 18:  

The Ordnance Factory Board (OFB) has drawn up a Rs 6,800-crore modernisation plan for its 39 factories across the country. A detailed project report in this regard will be submitted to the Defence Ministry for its approval. The detailed plan will outline the future product demand and include necessary requirements to suit this demand.

The board will also commence trial production at its new plant at Korwa near Lucknow this year. In case of the Nalanda project in Bihar, work on the fourth plant of the project has been stalled due to some “internal problems”.

OFB would also look forward for technical collaborations with Russian companies for manufacturing Smerch rockets that have a range of 90 km.

The board is expecting a 29 per cent growth in its turnover this fiscal from Rs. 7,815 crore to Rs 11,000 crore. It currently exports items worth Rs 50 crore to countries that include Indonesia, Malaysia, Kenya, Vietnam and Latin American nations

Massive Rs upgradation for Ordnance factories

MoD's massive Rs 15,000-cr upgrade for ordnance factories

This amount will be spent during the 12th Plan on upgrading, modernising and supplementing the OFB's production facilities

the defence ministry (MoD) will spend an unprecedented Rs 15,000 crore on the Ordnance Factory Board (OFB), its fully owned conglomerate of 41 factories that manufactures arms, ammunition, vehicles and equipment mainly for the military.

This amount will be spent during the 12th Plan (2012-13 to 2016-17) on upgrading, modernising and supplementing the OFB's production facilities.

During the last decade, the OFB has spent an average of about Rs 400 crore per year on modernisation. Now, during the 12th Plan, OFB modernisation will consume more than Rs 3,000 crore annually.

For private sector companies that are foraying into defence manufacture, this is worrying news. Bharat Forge, for example, has invested about Rs 100 crore on importing an entire factory to build artillery guns; it has set up a production unit in Pune. Now the private sector fears that that heavy expenditure on upgrading the OFB will result in military orders being placed on the OFB rather than on the private sector.

Dismissing such apprehension, a top MoD official tells Business Standard that the OFB's modernisation plan will not create additional production capacity. Instead, the new infrastructure is intended to improve production quality and to reduce the OFB's manpower levels by increasing automation.

For example, some OFB facilities still fill explosive into ammunition by pouring it manually, a laborious and inaccurate process that causes variations in the ammunition. The new machines being installed will fill explosive using a screw-driven mechanism that is faster and more precise.

A key benefit of modernisation will be a reduction in the OFB's bloated workforce. While the OFB is authorised more than 1,50,000 workers, it functions with just 90,000 on Sunday. Modernisation could bring this down to below 50,000.

This modernisation plan comes as a major relief for the OFB, which has been tarred by scandal since the Central Bureau of Investigation arrested the OFB's just-retired chairman Sudipta Ghosh on May 19, 2009, for allegedly accepting bribes from foreign companies.

Now dust from that scandal appears to be settling. While Ghosh has not yet been convicted, the MoD banned six arms vendors on March 5, 2012, from doing business with the Ordnance Factory Board for 10 years. Last month the army placed a Rs 1,260-crore order for 114 artillery guns, which the Ordnance Factory Board has developed from plans obtained from Bofors in the 1980s.

While Bofors provided 155 millimetre/39 calibre guns in the 1980s, the OFB has upgraded these with in-house R&D to 45 calibre.

Of the sanctioned Rs 15,000 crore, the Ordnance Factory Board says that Rs 7,600 crore will be spent from the Replacement Fund on replacing old machinery with new, automated and efficient machines that require fewer operators. The Replacement Fund is built up from the depreciation amount that OFB writes off each year, creating a corpus for replacing production machines after about 20 years of operation. Another Rs 7,400 crore will be spent from the New Capital head on civil works and modern production gear that is badly needed in the OFB's more decrepit factories.

One of the OFB's facilities, the Gun and Shell Factory, Cossipore, has produced equipment at the same location since 1802.

The New Capital expenditure also caters for new projects, such as the Rs 1,500-crore plan that was approved last month for manufacturing the DRDO-designed Pinaka multi-barrel rocket launcher, and advanced variants of its ammunition in several OFB facilities.

In addition, the Ordnance Factory Board will now build 51 mm and 81 mm mortar casings and will enhance its capacities for producing and overhauling infantry combat vehicles (ICVs).

"The modernisation plan, which was drawn up in 2010, has been approved by the government. Now the MoD will allocate funds to the OFB based on an annual expenditure plan," says L Mohanty, the OFB's Deputy Director (Engineering).

OFB officials admit that it will be a challenge to transparently absorb such a large modernisation budget. Mohanty explains that the OFB has overhauled and simplified its procurement procedures, especially eprocurement, which is now mandatory for most transactions.

Three key procurement manuals have been completely revamped. These include the Plant and Machinery Procurement Manual, with new procedures for overhauling machinery; the Civil Works Procedure Manual which has a simplified procedure for civil works construction; and the OFB Procurement Manual, which lays down the procedure for procuring raw materials.

The Ordnance Factory Board was the world's 46th largest arms manufacturer in 2010, according to the Stockholm International Peace Research Institute.

Its total sales that year were Rs 11,214 crore ($2.04 billion), with arms sales bringing in about 80 per cent of its revenue. However, worker productivity has been abysmally low, at just Rs 12.5 lakh per annum

Defence Ministry on OFB

A.K. Antony on Monday reviewed the functioning of the Ordnance Factory Board (OFB), including plans to get its much-delayed Nalanda factory on stream.

The factory was envisaged over a decade ago for manufacturing ammunition for the 155 mm field guns, but the plan ran into problems: first when South African firm Denel was blacklisted and this year when the Israeli Military Industry (IMI) received similar treatment after its name figured in a Central Bureau of Investigation case.

The Minister was informed by the OFB that a pilot batch of the Bi-modular Charge System modules that the factory is to produce have been assembled at Nalanda in collaboration with the Defence Research and Development Organisation and it will soon be offered to the Army for trials.

The OFB, Ministry officials said, told Mr. Antony that plant for bulk production would be set up through indigenous resources at a lesser cost. According to reports, the IMI was to set up the plant at a cost of Rs. 1,200 crore.

Incidentally, with the government barring the IMI from doing business with the OFB and the Defence Ministry earlier this year for a period of six years, the Board encashed the Rs. 224 crore bank guarantee provided by the Israeli firm on the grounds that there was a breach of the “integrity pact'' it signed for securing the contract after winning a competitive bid.

The OFB said it achieved a turnover of Rs. 12,391 crore in the last financial year, a 10.48 per cent increase over the Rs. 11,215 crore turnover in 2010-11.

The OFB is planning to invest Rs 15,764 crore to modernise its 39 factories and augment their capacities in the 12 Plan period. This is a sharp hike, compared to Rs. 2,953 crore for the same task in the previous Plan period.

During the recent past, the government sanctioned some major projects, including a Rs. 971 crore investment to augment the capacity of T-90 tanks from 100 to 140 tanks; a Rs. 378 crore plan to increase the capacity of manufacturing large calibre weapons; and Rs. 368 crore to augment the capacity of spares for the T-72 and T-90 tanks

cruise missile launching

India today successfully carried out the maiden test firing of the over 290 km-range submarine-launched version of BrahMos supersonic cruise missile in the Bay of Bengal becoming the first country in the world to have this capability.
The submarine-launched version of BrahMos was successfully test fired from an underwater pontoon near here, BrahMos CEO A Sivathanu Pillai said.
This is the first test firing of an underwater supersonic cruise missile anywhere in the world and the missile travelled its complete range of over 290 kms, he said.
He said the performance of the missile during the test launch was "perfect".
Ship and ground-launched versions of the missile have been successfully tested and put into service with the Indian Army and the Navy.
The maiden test of the submarine-launched version of BrahMos comes over a week after the indigenously built long-range subsonic cruise missile Nirbhay failed to hit its target in its first test.
"BrahMos missile is fully ready for fitment in submarines in vertical launch configuration which will make the platform one of the most powerful weapon platforms in the world," Pillai said.
Defence Minister A K Antony congratulated DRDO scientists and Russian specialists along with officers of the Indian Navy associated with the project for successful test launch of missile from an underwater platform.

7th CPC

7th CPC News : Central Minister in favour of seventh pay commission

Ajay Maken backs cry for seventh pay panel

New Delhi : With a little over a year to go before the next general election, the demand for a Seventh Pay Commission has started to gather momentum. Union housing and urban poverty alleviation minister Ajay Maken has taken the lead in endorsing the Central government employees' request for setting up of the new pay panel, citing the erosion of real wages due to high inflation since implementation of the Sixth Pay Commission's recommendations.

In a letter addressed to Prime Minister Manmohon Singh, Maken underlined how every pay panel since the Second Pay Commission, barring the Sixth Pay Commission, were set up in the third year of the decade. "We are again in the third year of the ongoing decade and Central government employees are justifiably looking forward to the Seventh Pay Commission," he said.

Recalling that it was under Singh that the last pay panel was set up in 2005, after the NDA government failed to do so in 2003, Maken, in the communication dated March 14, requested that a decision be "taken on priority" for constitution of the  Seventh Pay Commission. A notification for constitution of the 7th Central Pay Commission is the need of the hour, which is bound to have bearing upon about 20 million employees," he said.

Maken concluded by emphasizing that setting up of the new pay panel was in "larger interest of government employees as well as the (Congress) party".

Army’s got it all wrong

 

R Sundaram.

The furore over the leakage of the letter by the retired General V.K. Singh to the Prime Minister has faded from our memory faster than the fizz in a soda bottle. In that letter, the General had raised his concerns about the state of the preparedness in terms of weapons, ammunition and other fighting equipment.

According to newspapers the General was “miffed” with Ordnance Factories which produce weapons and other fighting materials. But no one thought it fit to ask the Factories what their side of the story is. If the Factories have been so remiss in discharging their remit in depth, range and quality as portrayed, there is every reason to seriously consider winding up this vast organisation. It may be of interest to know here that these factories produced $2.4-billion worth of equipment last fiscal for the armed forces and paramilitary forces, duly checked and accepted by an independent quality assurance organisation.

The Army’s fault

The Army’s own contribution to the current state of affairs cannot be denied. Although originally Russian technology was used for making this equipment, the Army found the claims of a superior product by the now-blacklisted Israeli Military Industries (IMI) attractive. It imported 46,000 rounds seven years ago and found them good. Later, in 2006, the Ordnance Factory Board started the first phase of a two step co-production with IMI. Strangely, however, it took unconscionably four long years for the Army to give bulk production clearance for the Board’s product, although all the critical components were from Israel. The Comptroller and Auditor General has observed this, too.

Another important aspect highlighted by the retired General was the incident of bursting of gun barrels of T-72 tanks. Although these have been produced in the erstwhile USSR and East European countries since early eighties in huge quantities, the problem dogged this product for long. In India, too, this occurred in barrels of both foreign and indigenous origins. Getting inputs from Russia to make improvements as implemented over there took more than half a dozen delegation-level meetings between the two countries. Although after valiant efforts some details of heat-treatment processes were obtained and implemented, there is no knowing that the problem has, indeed, been licked, since Russia does not share ‘know why’.

Meanwhile, the Army appears to believe that one of the causes may be the strength of explosives in the indigenously produced high explosive ammunition. This is funny since there is no other ammunition available to be used in training or trials, as there is no stock of anti-tank ammunition which is what compelled the General to write in the first place.

Difficult Russians

Although Russia has been our mainstay in defence equipment, it has proved to be a difficult partner at the operating level. Meetings to sort out technical problems or supply deficiencies routinely entail inordinate delay. One wonders whether Russia has ever attempted modernising its documentation or logistics to 21{+s}{+t} century standards. Price negotiations with Russian suppliers, too, are a nightmare. During delegation-level meetings lasting a week they would always come up with a quotidian formulation such as “reply would be given in the established manner”. There is rarely any elemental cost data or indices made available to back their arguments. Unless, in the long haul, the Army sincerely believes in indigenous development, whether from public or private sector, there may not be any guarantee against recurrence of such situations.

(The author is a former member, Ordnance Factories.)

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