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Thursday, 10 July 2008

From Today's Papers - 10 Jul

entre revises defence procurement policy
Sandeep Dikshit

NEW DELHI: The Centre on Wednesday revised the defence procurement policy (DPP) to ensure speedier purchases and make the Indian industry a beneficiary as India shops worldwide to strengthen its defence preparedness.
The DPP 2008 will govern purchases worth nearly $100 billion over the next decade.
The Defence Acquisition Council headed by Defence Minister A.K. Antony cleared the DPP 2008 which includes provisions for increasing transparency. But the biggest change is including the new concept of banking in the offset clause which makes it mandatory for foreign companies selling equipment over Rs. 300 crores to source part of their requirement from the country.
“The DPP will be operative from August 1 and incorporates the cumulative experience of the services and the Ministry of Defence over the last two years,” said government sources. In 2006, the government unveiled a new defence purchase policy to reduce delays and eliminate corruption in vendor selection. It had also promised to revisit the policy after two years.
As Mr. Antony had promised the government has ensured that an altered purchase policy would be in place by August.
“The policy has been suitably changed to pave the way for speedy procurement of weapons systems and platforms in a transparent manner,” added the sources.
The DPP 2008 marks a significant departure from the existing process by including the concept of banking of offsets — a company executing an order will be able to transfer the value of the work done in India to fulfil the offset requirements of another order.All foreign companies had made this demand though the validity of the banking period sought by them was different.
The government has now fixed it at two years. If a company has sourced some value of one project from India, it can indicate this amount as offsets in another request for proposals (RFP) if it comes within two years of the earlier work.
Simultaneously, the government is also planning to beef up the Directorate of Offsets with representations from the services, Defence Finance wing and technical organisations. India has already inked a few defence contracts which include offsets.
But a bigger department is required to cope with mega contracts in the pipeline. For instance, the Rs. 42,000 crore tender for fighter aircraft has a 50 per cent requirement. Thus to ensure that Rs. 21,000 crore of the requirement originates from India would require greater vigilance to check if the winning company is cutting corners.
The purchase policy also promises a greater push to indigenisation. This would be done by promoting wider representation on panels doing technical evaluation of indigenously designed military platforms.
The Defence Ministry has noted the predilection of some services for off-the-shelf imported military systems rather than indigenously designed ones.
The presence of defence researchers and others on the evaluating panel will ensure that conclusions of trials and evaluations are not made in a narrow single-service environment.
The DPP 2008 also seeks to involve Indian companies in designing and producing hard-to-obtain equipment, allow closure of dead-end projects and ensure that the cascading effect of local taxes does not make the companies’ products costlier than foreign equipment.
The revised DPP has provisions that incorporate suggestions by the Central Vigilance Commission which had scrutinised some defence deals in the past. The focus will be on transparency.

Army to set up bio-resource centre
S.M.A. Kazmi
Tribune News Service

Dehra Dun, July 9
The Army would set up an Army Bioresource Centre (ABC) at Clementown cantonment here to help spread low- end technologies associated with bioresources to the rural areas through ex-servicemen.
The setting up of the ABC was announced by Lt- Gen J.P. Singh, Corps Commander, 2nd Corp of the Western Command, here today. The Corps Commander was on a visit to the Himalayan Environmental Studies and Conservation Organisation (HESCO), a voluntary organisation that would provide the technologies for the centre.
He said it was important to provide employment to rural youth in their native places in the coming times since a majority of the population resided in the rural areas and was engaged in agricultural- based activities.
“We would help set up this centre to train our men, who retire young to help them know their biresources and also to tap them for earning their livelihood,” said General Singh.
Dr Anil Joshi of HESCO said the initial funding for the project would be done by the office of the principal scientific adviser to the Prime Minister and the Centre would be run by the Army Wives Welfare Association.
He further said post- harvest technologies in cereal, fruits would be given, besides training the participants in making products from biomass available in different areas.
Maj-Gen Umang Sethi, GOC, Golden Key Division, Clementown, welcomed the guests and hoped that the new project would not only benefit ex-servicemen but general rural public living in remote areas.

New procedure for defence purchases soon
Tribune News Service

New Delhi, July 9
In a significant move, the defence ministry today decided to introduce a new procedure for making purchases and developing products for the armed forces. The thrust will be on self-reliance and strict time-control.The procedure, expected to be operational from August 1, will be called the Defence Procurement Procedure (DPP-2008) and will replace the existing DPP that was formulated for the first time ever in 2006. A formal announcement is expected during the next week, a source in the ministry of defence said.Among the major changes will be a permission that will allow more time to foreign suppliers in finding Indian partners who can accept the transfer of technology from abroad. In the DPP this is referred to as the “banking of offsets”. This was major demand for foreign suppliers who are in joint venture with Indian companies.As per estimates, this will give the foreign company two more years in a finding suitable Indian company after allocation of work. The offset clause means that 30 per cent of a product purchased from a manufacturer will have to be made in India. At present the foreign company and its Indian partner have to match their shares on a yearly basis.The new DPP will have another important clause. All new products will have 70 per cent money from the Defence Research and Development Organisation (DRDO), 20 per cent from the private industry and 10 per cent by the defence forces. Time frames will be fixed. The DRDO will not seek extensions in time while the Army, the Navy and Air Force will not change the General Staff Qualitative Requirements (GSQR) within the given time frame. The GSQR is crucial, as the product takes time to develop because new technologies emerge.Sources said once the new DPP is enforced the system of accepting the necessity of buying a product will have to be within the framework of the new procedure.In the meeting today, which was chaired by the defence minister A.K. Antony, it was also discussed how the “offset clause” could be waived off in deals between the Indian government and other governments. However, no decision could be taken on this.A few differences of opinion have remained between the MoD and officials of the armed forces and these could not be ironed out.

Samtel to make avionics systems for Sukhoi, Tejas

Bangalore, July 9 (IANS) Joint venture Samtel HAL Display Systems has secured a Rs.2.2-billion ($50 million) order to develop display systems for fighter aircraft such as Sukhoi (Su-30 MKI) and Tejas Light Combat Aircraft (LCA), the company said Wednesday. The joint venture between state-run behemoth Hindustan Aeronautics Ltd (HAL) and high-tech equipment maker Samtel Display Systems was formed in 2006 as India’s first public-private partnership in the defence sector.
In the first phase, the indigenous display systems will be fitted in the Sukhoi fleet to be produced by HAL over the next decade for the Indian Air Force (IAF).
The liquid crystal display (LCD) systems have been tested by state-run Defence Avionics Research Establishment (DARE) for flight worthiness after they were cleared by the regional centre for military airworthiness.
“Engine performance and situational data such as location, terrain, traffic and weather and airport information are digitally depicted for interpretation on the display,” Samtel chairman-cum-managing director Satish Kaura said.
“The tie-up with HAL is a milestone in public-private partnersip in the strategic defence sector,” he added.
In the second phase, the display systems will be fitted in HAL’s light combat aircraft and inter jet trainer programmes.
HAL chairman Ashok K. Baweja said the aeronautics firm was cruising ahead to become a powerhouse for design, analysis, engineering and software solutions.
“We are committed to fostering India’s ambition to be a leading role player in the aviation world aviation next decade,” Baweja added.
Part of the Rs.12-billion Samtel group, Samtel Display manufactures high-tech equipment for avionics, military and professional applications in the international market.

Exodus-hit DRDO goes for contract filling

Gets defence ministry nod to hire scientists for fixed period and pay

Ritu Sharma. New Delhi

Hit by an exodus of key scientists, the Defence Research and Development Organisation (DRDO) is trying to get its act together and has been permitted by the defence ministry to hire scientists on contract.
The step may help it cut short the gestation period of many projects.
DRDO has been hit by a talent crunch with a large number of scientists leaving for plum packages in the corporate world.
“The ministry has given the green signal to contractual appointments, so that bright scientists can be hired. Their accountability will be fixed and they will be required to deliver within a stipulated time frame,” chief controller (R&D) W Selvamurthy said.
Such scientists will be paid a fixed remuneration based on their experience and quality of work.
A number of DRDO projects have been plagued by costand time overruns, forcing the armed forces to take theimport route.
Among the major DRDO projects that have suffered huge time and cost overruns are the development of the Arjun main battle tank (MBT) and the Tejas light combat aircraft (LCA).
DRDO has, however, been instrumental in developing a series of tactical and strategic missile systems such as the Prithvi and the Agni.
DRDO, which celebrates its golden jubilee this year, has lost around 1,100 scientists between 2003 and 2007, an average of one person every two days.
Selvamurthy said the defence ministry had also agreed to the DRDO demand for enhancing the professional update allowance for scientists.
“Earlier, everyone used to get around Rs5,000 per annum as professional update allowance for becoming a member of a scientific society or subscribing to magazines. But now the ministry has accepted a differential professional update allowance based on seniority,” he said.
The scientists will get the allowance in three categories of Rs10,000, Rs20,000 and Rs30,000 based on experience and rank.
The attrition rate in DRDO, which has 7,000 scientists, is about 6.3%. What is worsening the situation is inability of the organisation to fill up at least 30% of vacancies.
DRDO scientists are in great demand in the private sector and find jobs in aeronautics, armaments, combat vehicles, electronics, instrumentation engineering systems, missiles, materials, naval systems, advance computing, simulation and life sciences.
In a bid to check the exodus, DRDO has sought financial incentives for scientists who obtain patents and whose research work gets published in high-profile journals.
“Annually, DRDO scientists get around 50-60 patents. We hope the demand will be granted,” Selvamurthy said. —IANSn Defence minister AK Antony (2L) inspects a display of weaponry during a visit to a missile complex at the Research Centre Imarat, a DRDO lab in Hyderabad, on March 25, 2008 —AFP

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