For the first time the Ministry of Defence (MoD) has appointed SBI Caps as a transactional advisor to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines

by Huma Siddiqui

FE was the first to report about the MoD being in talks with SBI Caps to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines.

For the first time the Ministry of Defence (MoD) has appointed SBI Caps as a transactional adviser to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines. At a conference in New Delhi, Apurva Chandra, DG (Acquisition), MoD said that “The MoD also has a legal adviser this is keeping in line with the requirements under the Strategic Partnership (SP) Model. Also a lot of changes are being introduced in the Defence Procurement Procedure -2016 (DPP).”

“In the last four years, over 200 contracts worth Rs 2,00,000 crores have been awarded, of which about 130 contracts, valued at approximately Rs 1,25,000 crore, were given out to the domestic defence industry” said Chandra. He was speaking at The Society of Indian Defence Manufacturers (SIDM)’s first Annual Session – Self Reliance is Crucial for India’s Defence & Security” and industry body CII.

“More changes are expected in the next round including issues related to the LC-based payments, easing the provisions for the imposition of LD clause which is weak and criteria for the selection of the vendors. The new changes are expected to come out soon which will help in our efforts to `Make in India’ initiative to be a success,” said Chandra.

The government has on Tuesday approved changes in the DPP-16 including permissions to commence with benchmarking of cost for equipment immediately on receipt of the trial report in the Service headquarter, legislating provisions for Exchange Rate Variations when pursuing procurement with an ‘Option Clause’.

The SP policy was announced in 2017. More recently, Defence Ministry simplified the industry-funded development procedure (Make-II), a new defence production policy is under discussion which aims to achieve self-reliance in 13 systems latest by 2025. The defence export target is set at Rs 35,000 crore.

“These measures will go a long way in obviating under procedural delays and will hasten activities besides shrinking the procurement timelines giving due preference to indigenization,” said officers. FE was the first to report about the MoD being in talks with SBI Caps to act as consultants in the selection process of strategic partners to build combat planes, helicopters and submarines.

Sources had told FE then that, “This was in line with the government’s commitment that third-party consultants will bring transparency to the selection process for strategic partners under the strategic partnership model that has been mired in delays.”

While acknowledging that technology is import to win battles, Said Lt Gen S S Hasabnis, Deputy Chief of the Army Staff (P&S), Indian Army urged the industry “to deliver what they show and should be found wanting.”

The strategic partnership policy aims to boost the Make in India initiative by encouraging private sector companies to take part in defence production and create jobs. As reported by FE earlier, four sectors – fighter aircraft, helicopters, submarines and armoured fighting vehicles and main battle tanks – have been finalised for the SP model.

The Atre Committee recommended designating one private sector firm as the SP for each of seven technology areas — aircraft, helicopters, aero engines, submarines, warships, artillery guns, and armoured vehicles. It also recommended selecting two SPs each for three other technology segments — metallic material and alloys, non-metallic materials, and ammunition.