Banking on defence PSUs and OFB

Harsha Kakar
The recent spat between the Hindustan Aeronautics Limited (HAL) and Admiral Arun Prakash, the former Chief of Naval staff, brought to fore the lack of faith and trust which the armed forces place on defence Public Sector Undertakings (PSUs) and factories under the Ordnance Factory Board (OFB). Admiral Prakash had termed the HAL in a YouTube interview series as ‘lethargic, deadbeat’, a company that had ‘failed to show initiative’ and one that deserved a ‘rap on the knuckles’. He was referring to the HAL’s attempt to push the ALH helicopter down the navy’s throat without meeting the basic naval requirements.
The HAL responded with a statement which read, ‘The weapons trials on ALH Navy were completed successfully, certified and cleared for use by the navy. However automatic blade folding was never promised or attempted on ALH. HAL cannot be blamed for things it did not promise. It is wrong to use words like lethargic etc. because technological initiatives call for in-house funding etc.’ HAL has realized that the door is now firmly closed on the Naval Utility Helicopter program and its investments in attempting to make the ALH suitable for the Navy are now sunk.
Commander Kumar a former naval pilot and commentator on military matters wrote in a blog on the same issue over a month ago, ‘the ALH is yet to meet its own 35 year-old Naval staff qualitative requirements (NSQRs) in key areas such as range and endurance, blade folding, stowed dimensions, aircraft availability and serviceability. These are non-negotiable specifications for helicopters that operate for extended duration at sea.’
Accusing the HAL was another naval officer, Marathe, who stated, ‘the biggest problem again here is that the customer, which is the Indian Navy, was given a product that did not fit the bill. Once again fault is being found with the Indian Navy for not supporting indigenous development.’ He went on to adversely comment on the testing philosophy of HAL, which has led to multiple accidents. No action has ever been taken by HAL against those responsible for faulty testing leading to loss of lives of pilots.
This malice is not limited to HAL alone but the entire family of PSUs and OFB factories, which have for decades been devoid of competition and have held monopoly over providing equipment to the armed forces.
The Indian Army has faced regular accidents during peacetime training with ammunition manufactured by ordnance factories. It has impacted almost every weapon system, forcing the army, on occasions, to suspend live firing. When questioned, ordnance factories display ignorance, refuse to investigate and blame storage conditions under the Army. The fact that these accidents occur across the length and breadth of the country, involving different depots of storage, with a common manufacturer is ignored.
The recent Government decision to corporatize the ordnance factory board with the intention of enhancing their functional autonomy, efficiency, increasing growth potential with lesser government control has angered its employees. Their concern is on job security and related issues, for which they are proposing to proceed on a nation-wide strike. Over the years the OFB have accepted demands from the forces but in most cases failed to deliver either in quantity or quality, leading to shortfalls.
On ammunition alone, multiple parliamentary committees on defence and Comptroller and Auditor General reports have criticized OFB for failing to meet quotas in production. They have also been hauled up for poor quality products leading to accidents. Instead of seeking to enhance capability and quality in production, they seek to proceed on strike. Currently, as tensions continue with China, there are no efforts by the OFB to ramp up its production facilities to cater for the shortfalls in ammunition. On the contrary, the unions are busy discussing their forthcoming strike.
A statement prior to their earlier planned strike in Jan this year read, ‘82,000 Central Government employees working as defence civilian employees will lose their status and they will become employees of a corporation, thereby depriving them of various benefits available to them.’ It is not concern on poor quality production but losing of benefits which concern them.
A recent case is of the joint venture with Russia for production of the AK 203 at the OFB plant in Amethi. The defence ministry has been compelled to appoint a costing committee as the price quoted for the same by the OFB was far higher than the bench park price. This was after delaying its submission of manufacturing costs by seeking extensions.
The possible reason for the OFB’s negative approach has been that the project was to be headed by an army officer of the rank of Maj Gen. If the model was a success, then it could be replicated in other OFB concerns. For the OFB, it is neither national interest nor care for the armed forces, as they profess, but personal interest. The establishing of a costing committee is a repeat of the TEJAS pricing where the cost initially quoted was even higher than the SU 30 which was being manufactured under Russian licence.
It is in this light that the government seeks to enhance the involvement of the private sector into defence production. The Army has already begun placing orders for its ammunition to the private sector, rather than the OFB. The global norm is that the Private Sector caters for national defence needs. On the contrary, Ravindran Pillai, vice president of one of the unions stated, ‘Any private manufacturer always only looks at profit. His national interest will be the last. Quality assurance in the private sector will be done by third party inspection and self-certification. It is putting the lives of our jawans and armed forces on the risk. Ordnance factories only work for national interest.’ His words are the opposite of what the OFB has provided to the armed forces.
The creation of PSUs and OFB was essential in the initial years after independence when India lacked a technological and industrial base. With passage of time, India industry has developed and is now capable of absorbing latest technology. The government talks of ‘atmanirbhar’, but it is only possible if the Government reduces its control over its PSUs and OFB concerns and enables them to compete globally. If they fail, they can pack up. Protecting them is akin to maintaining white elephants which milk the national economy.
The author is Major General (Retd)