March 14, 2012
Even as the debate on the defense minister’s probe into the Rafale deal, vehemently denied by the Defense PR to Aerospace Diary, continues, we learn discussions with MoD on the MMRCA contract have now reached the documentation stage.
With concerns that Hindustan Aeronautics will not be able to honor its commitment for manufacturing of the Rafale, the Reliance proposal for setting up a facility either at the HAL complex or independently (Aerospace Diary), has yet to be sorted out. On the query whether this could invite oppositions from other private giants, an analyst told Aerospace Diary: “This will require an investment of Rs 3000 crores. Nobody else is in a position to invest so much.”
India’s plans for moving forward on its defense procurement is also attracting skepticism. As the ruling party, Congress, increasingly loses its foothold- as apparent in the recent state elections- it is becoming painfully clear that interest in the forthcoming 2014 election is more the center of its attention. “It will thwart any decision or move that makes the party attract the ire of the opposition fast gaining ground. It is likely that major decisions might be put off,” says an official in the ministry.
In parliament today, A.K Antony defense minister said on a question related to delay in contracts: “Acquisition of weapons and equipment for defense forces is a complex activity and is carried out in accordance with the provisions of Defense Procurement Procedure (DPP). As per broad timeframe given in DPP, it takes about 80-137 weeks to complete the various stages of procurement and conclude the contract. However, delays sometimes occur in procurement cases due to several reasons, such as insufficient and limited vendor base, nonconformity of the offers to the Request of Proposal (RFP) conditions, field trials, complexities in contract negotiations and long lead time for indigenization etc. Defence acquisitions are normally based on fixed price contracts. There are contractual provisions for penalties including imposition of liquidated damages for delay in execution of contracts.
“To counter systemic and institutional delays, procedures are continuously reviewed and refined on the basis of experience gained during the procurement process.”
India will need to decide and decide fast, when it will finally have a DPP that makes the cut.