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Defense Industry General News and Updates

Discussion in 'Indian Defence Industry' started by layman, Apr 18, 2017.

  1. Abingdonboy

    Abingdonboy Major Technical Analyst

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    @Gessler @MilSpec @Ankit Kumar 001 @PARIKRAMA @Agent_47 @Hellfire 7.62X51mm Tar-21 at Punj Lloyd manufacturing unit:


    [​IMG]


    If the OFB 7.62X51 rifle is a bust surely this has got to be the de facto next rifle for the IA? IWI now has everything running in its favour except of course the babudom and IA decsion making process.


    + I wonder if this was the 7.62x51 rifle that was ordered for the IA's SF recently?
     
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  2. Ankit Kumar 001

    Ankit Kumar 001 Major Technical Analyst

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    Indian Airforce has released a RFI for 2000 9mm pistols for Garud.
     
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  3. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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  4. Sancho

    Sancho Lt. Colonel Technical Analyst

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  5. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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    Writer is speculating.
     
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  6. GRH

    GRH IDF NewBie

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    Hi everyone, I read the above article today in the newspaper, I would like to understand how big of a deal/important this strategic partnership in DPP 2016 thing is? What are your opinions on this? Would it be a game changer and cut down the time taken to build/procure weapons for all the three armed forces? I would like to ask all the seniors here including @PARIKRAMA .. what are your thoughts on this...
     
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  7. Abingdonboy

    Abingdonboy Major Technical Analyst

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    It is important but it won't be a "game changer" unless other issues are sorted out (defence procurement planning, inter-service procurement rationalisation, appropriate budge allocation, intelligent budget mapping, cutting down on the tender-cycle-negotiation circus etc etc).
     
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  8. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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    We need full details of the strategic partnership chapter to judge how big of a change it is. From what we know it is a serious shift in the way we procure things. It will cut down the time for sure. But how efficient will it be since there won't be serious competitions. It may push the prices up and create monopolies ( which is ok for now IMO). For private industry this is a huge opportunity to become big in this sector.
     
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  9. GRH

    GRH IDF NewBie

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    Thank you both! Regarding single vendor situation, I read somewhere that this is done due to long term support and involvement needed by the seller for many years(decades), no seller would invest if he is not sure about the future , so I assume that is why they have created strategic partnership with a single seller. I am not sure, your comments would be appreciated.

    Regarding @Abingdonboy reply, I understand it now. My initial thoughts were, there seem to be lot of procurement depending on this.. Amphibious ships, submarines, Naval helicopters NMRH etc, now it becomes very important when so many deals are depending on that and we need them all ASAP. When you compare defence ministry to others such as power and roads etc, there is a huge gap in delivery/efficiency in Modi govt, I also read in the today's article that PMO is involved,so I assumed that this SP clause might be very important and change the dynamics ,
     
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  10. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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    You misunderstood what SP is.

    Read this -> http://www.sauravjha.com/blog/make-...procedure-2016-means-indian-defence-industry/
     
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  11. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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  12. Butter Chicken

    Butter Chicken Lieutenant FULL MEMBER

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    Big news- Strategic Partnership(SP) model to come out this week!Jaitley has really pushed the policy stuck since last year
     
  13. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Israel Weapon Industries and Indian private sector firm Punj Lloyd have began a venture to jointly produce a variety of small arms from the Israeli firearm manufacturer's product line, of which some are for use by Indian armed forces. Known as Punj Lloyd Raksha Systems (PLR), the new venture is the first private manufacturer of small arms in India that produces equipment for both use by the Indian defense forces and for export, and is expected to take a sizeable portion of India's $5 billion small firearms market. IWI-designed weapons to be manufactured at the plant include the Tavor carbine, X95 assault rifle, the Galil sniper rifle, and Negev light machine gun. The foundation of the venture also comes as New Delhi faces an immediate requirement for 66,000 assault rifles, with a total requirement is 250,000, and it's expected that in the next two months, an assault rifle tender worth an estimated $1 billion will be released by the Indian Army.
     
  14. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Weird, would not happen in the US Army, you do not point weapons at anyone.
    The Four Rules
    1. All guns are always loaded. (Treat them so!)
    2. Never point the gun at anything you are not willing to destroy.
    3. Keep your finger off the trigger until your sights are on target (and you have made the decision to shoot).
    4. Be sure of your target and what is beyond it.
     
  15. Butter Chicken

    Butter Chicken Lieutenant FULL MEMBER

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    [​IMG]


    By Ajai Shukla
    Business Standard, 12th May 17


    On Thursday, before a closed-door gathering of private defence industry chiefs in New Delhi, the ministry of defence (MoD) unveiled its long-delayed policy for identifying “strategic partners” (SPs) – chosen companies that will partner global “original equipment manufacturers” (OEMs) in building defence platforms in India.

    While the MoD has not released details of the new policy, three individuals present at the meeting have shared with Business Standard the new policy’s scope, and the criteria and procedures for selecting SPs and foreign OEMs that they would partner.

    The policy’s initial aim is to shortlist six top companies as SPs in four technology segments – single engine fighter aircraft, helicopters, submarines and armoured fighting vehicles. A company can be nominated an SP in only one segment, and will have to indicate its preferences while applying.

    In 2015, the Dhirendra Singh Committee had recommended selecting SPs to build defence equipment. Last year the VK Aatre Task Force laid down criteria for selecting SPs in ten technology segments, including aero engines, artillery guns, ammunition and smart materials. For now, however, the SP policy has been confined to just four segments to cater for urgently needed battlefield equipment.

    This includes single-engine fighters, for which the air force has already initiated procurement. The navy has framed its requirements for its next six submarines under Project 75-I. And the army, after exploring the indigenous option of developing its Future Main Battle Tank with the Defence R&D Organisation, has changed its mind and issued specifications for buying foreign tanks.

    For these procurements, which will all involve substantial in-country manufacture, the new policy envisages shortlisting Indian SPs and foreign OEMs through separate, but simultaneous, processes.

    Shortlisting of Indian SPs

    The first six SPs will be chosen from amongst Indian private firms in a two-stage process. To make it past the “first gate”, aspirant companies would have to meet stipulated financial and technical criteria. They must be Indian companies, as defined in the Companies Act, 2013; and have no more than 49 per cent foreign holding, with no “pyramiding” of foreign holding.

    The MoD’s stipulated financial criteria weed out all except large, established firms. These include: consolidated turnover of at least Rs 4,000 crore rupees for each of the last three financial years; capital assets of Rs 2,000 crore; and a minimum credit rating of CRISIL/ICRA “A” (stable).

    The MoD will also consider companies’ records of wilful default, debt restructuring and non-performing assets.

    Companies making it past the “first gate” would undergo “site verification” in what is termed “Stage II evaluation”. A MoD team would visit company facilities to evaluate financial parameters and technical capability, with equal weightage given to both.

    In this second round of financial evaluation, it will be ensured that the applicant company’s solvency ratio (external debt to net worth ratio) is no higher than 1.5:1; and its modified solvency ratio (external debt plus financial guarantees to net worth ratio) is no higher than 2.5:1. The debt to EBIDTA (earnings before interest, depreciation, tax and amortisation) ratio can be no higher than 3.

    The “technical evaluation” will scrutinise the companies’ projects (launched, on-going, and also completed) over the last five years; the vendors it has developed; its research & development (R&D) budget and successes; certification and accreditation; and the number of certified quality auditors and quality assurance/control professionals as a percentage of its total employees.

    * * * *

    Strategic Partner requirements

    Financial criteria
    Technical criteria
    Stage I evaluation



    Should be an Indian company, as per Companies Act, 2013
    Company should demonstrate “system of systems” integration capability
    More than 50% capital owned by Indian citizens or companies

    Controlled and managed by Indian residents

    Majority Indian representation on Board of Directors

    Maximum 49% FDI in company, without pyramiding

    Consolidated turnover of at least Rs 4,000 crore for last three years

    Capital assets of at least Rs 2,000 crore

    Minimum credit rating of CRISIL/ICRA “A” (stable)

    Will consider past record of wilful default, debt restructuring and non-performing assets



    Stage II evaluation


    Company’s solvency ratio (external debt to net worth ratio) no higher than 1.5:1
    Company projects (launched, on-going, and completed) over the last five years
    Modified solvency ratio (external debt + financial guarantees to net worth ratio) no higher than 2.5:1
    Certification and accreditation; and the certified quality auditors as a percentage of total employees
    Debt to EBIDTA (earnings before interest, depreciation, tax and amortisation) ratio no higher than 3
    Research & development (R&D) budget as percentage of turnover; and R&D successes in last 5 years
    Return on invested capital (RoI): EBIDTA divided by average invested capital
    Vendors the company has developed

    CAPEX for plant and machinery annual and aggregated (for last 5 years)

    Shortlisting of foreign OEMs

    OEMs for each weapons platform will be selected primarily based on the “range and depth of transfer of technology” they offer India. The indigenous content they propose, the eco-system and supplier base they will develop, their plan for skilling Indian workers and future R&D in India will be evaluated in shortlisting OEMs.

    Preferably two or more OEMs will be shortlisted for each technology segment, but acquisitions will be taken forward even if just a single OEM makes the cut.

    * * * *

    Shortlisting of foreign OEMs

    Main factor: range, depth and scope of technology transfer offered to Indian SP
    Extent of indigenous content proposed
    Extent of eco-system of Indian vendors
    Measures to support SP in integrating platform
    Plans to train skilled Indian manpower
    Extent of future R&D planned in India

    Finalising a procurement

    Once a shortlist of SPs and OEMs is available in a particular technology segment, the MoD can proceed with procuring that platform by issuing a “request for proposals” (RFP) to SPs in that technology segment. The RFP will mention shortlisted OEMs, so that the SPs can engage with them, choose an OEM partner, and submit an offer in collaboration with that company.

    The MoD would then evaluate the offers, giving 80 per cent weightage to the price bid and 20 per cent to “segment specific capabilities”. The winning company, which has the best aggregate score, would have to sign a contract that includes a ten-year “performance based logistics” contract (which guarantees a certain equipment availability at all times), life-cycle support, including the establishment of testing and proving laboratories, and equipment upgrades further down the line.

    After the meeting, a MoD release stated: “Industry representatives welcomed efforts of the Ministry to put in place such a framework and offered several positive and constructive suggestions. The Ministry has taken due note of these proposals, which would be considered while finalising the policy in this regard.”

    Sources say the policy, largely in its present form, will be cleared in a meeting of the MoD’s apex Defence Acquisition Council on May 15.

    The finalised SP policy will be included as Chapter VI of the Defence Procurement Policy of 2016, which was published last year with Chapter VI blank.

    http://ajaishukla.blogspot.in/2017/05/defence-ministry-unveils-strategic.html
     
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