Nod for $4.5-bn military acquisitions (Second Lead)

June 22nd, 2012 - 11:25 pm ICT by IANS  

New Delhi, June 22 (IANS) In a major acquisition spree, India’s defence ministry Friday approved proposals from the army, navy and the air force for quick reaction air defence missiles, bullet-proof vehicles, Dornier planes, warship guns and a pan-India communication network - worth a staggering $4.5 billion - top defence ministry officials said.

The decisions were taken at a marathon two-and-a-half-hour Defence Acquisition Council (DAC) meeting chaired by Defence Minister A.K. Antony, they said, noting that such a mass scale approval was “unprecedented”.

The approvals come at a time when the Indian armed forces stand exposed over the hollowness of their operational preparedness due to gaps in weaponry and equipment, apart from acute obsolescence.

One of the proposal approved, top officials said, was for buying eight regiments of Quick Reaction Surface-to-Air Missiles (QRSAMs) that can engage targets at 15-km range at a minimum altitude of 6,000 metres in under six seconds.

These QRSAMS will replace the Russian Kvadrat system. The procurement is worth Rs.12,000 crore ($2.4 billion).

The DAC, officials said, approved the IAF proposal to buy the Dorniers to boost its fleet from 41 to 55 planes. Dorniers are reconnaissance and transport planes.

The IAF will buy these planes from the Bangalore-based defence public sector undertaking Hindustan Aeronautics Limited (HAL), officials said. The order is worth Rs.1,000 crore ($200 million).

The DAC nod also came for the expanding the Integrated Air Command and Control System (IACCS) nationwide at a cost of about Rs.7,000 crore ($1.4 billion), officials said.

IACCS, of which Air Force Net (AFNET) is a part, had been launched as a pilot project by the IAF and is currently operational in six air bases in the country. Work for expanding the IACCS nationwide to link up all the sensors used by the IAF, be it radars, satellites, aerostats and such, will begin in right earnest, they said.

“With the pilot project turning out to be a success, the DAC gave its approval to expand the IACCS network into a nationwide system.”

The Indian Army’s effort to procure 1,300 bullet-proof vehicles in the ‘Make Indian’ category, open only to Indian defence manufacturers, worth Rs.720 crore ($144 million) too got a nod. Now, the Indian Army is free to issue a tender (Request for Proposals in defence parlance), which will be the second attempt, to buy the vehicles. The previous tender was cancelled last year after none of the companies in the fray made the cut, the officials said.

The meeting also gave its nod to the Indian Navy to procure 30mm guns for its warships. The 116 guns - worth Rs.1,500 crore ($300 million) - will have electro-optic fire control systems.

The first lot of these guns are to be directly imported and the rest manufactured in India under a technology transfer contract.

At the meeting, attended among others by the three service chiefs, defence secretary, defence production secretary and the director general acquisition, Antony called for increasing the capabilities of the defence PSUs to enable indigenous manufacturing of military systems.

He also wanted the practice of nominating of defence PSUs for defence systems manufacturing to be discouraged, thereby encouraging greater competition among both the public and private sector defence companies.

Antony was also quoted by officials as saying that nomination of of defence PSUs will be done only in rarest of rare cases, when the military equipment is operationally very important and the local capacities will not met the time and quality parameters for procurement.

The meeting, which was to discuss more proposals, did not take up some items on its agenda.

The DAC did not debate the changes that the ministry wanted in the offsets clause in its Defence Procurement Procedure (DPP), the officials said.

The 2011 DPP stipulated offsets that mandates foreign vendors to plough a minimum of 30 per cent of defence deals worth over Rs.300 crore ($60 million) back in Indian defence, aerospace and homeland security industries and training related to these sectors.

Offsets are a provision in global defence business practiced by nations that want to energise their indigenous defence industry.

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