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$100 million vs $1 billion... it must not include any combat systems.
with this kind of attitude how can someone think of developing indigenous military hardware and for secrecy.whats grantee that bhel would be able to develop the project secrectly. i think is some kind of ploy by our BAbus`s working ib defence ministry when BHEL would not be able to complete the project in time or cost then their will be globe tender for the same project and india company woulds be sidelined.The Ministry of Defence is poised to deliver a disheartening blow to India’s nascent private defence industry. After inviting private companies into the Rs 10,000 crore project for developing the Indian Army’s futuristic Tactical Communications System (TCS), the MoD is abandoning competitive bidding and handing over the project to a defence public sector undertaking, Bharat Electronics Limited (BEL). The reason cited by the MoD: secrecy.
Left in the lurch are six private companies --- Wipro, Mahindra Defence Systems, Tata Power, L&T, Rolta and HCL --- which the MoD had vetted in detail before categorising the TCS project as “Make --- High Tech”. In this category, the government funds 80% of the R&D cost, while the selected vendor contributes 20%. Also sidelined for the TCS are two non-defence PSUs, ECIL and ITI.
The TCS will be a fully mobile network, which can be transported anywhere during war, even into enemy territory, providing the military with a backbone network on which it can communicate and transfer data. The TCS operates much like a cellular phone network, but with two major differences. While cellular phone transmission towers are fixed onto buildings, the TCS’s exchanges and switches will be installed in high-mobility vehicles, allowing them to be transported and set up anywhere. Secondly, messages sent out over the TCS cannot be easily intercepted or jammed since they will not remain on a single frequency; instead, transmissions will hop frequencies, dozens of times every second, in a pre-programmed sequence.
It is to maintain the secrecy of this “hopping algorithm”, or the sequence in which the TCS hops frequencies, that BEL is being handed over the project. The MoD is citing a new cyber policy formulated by the apex National Technical Research Organisation (NTRO) --- a secretive body that functions under the Cabinet Secretariat, overseeing electronic intelligence. The NTRO had mandated that the “hopping algorithm” must remain the exclusive preserve of the government.
The NTRO’s interpretation has been shaped by guidelines issued by Shekhar Dutt, while he was Deputy National Security Advisor. Now the governor of Chhatisgarh, Shekhar Dutt has earlier served as Defence Secretary and as Secretary of Defence Production, with close and longstanding links to BEL.
Now, based on that NTRO interpretation, a special MoD committee is about to recommend that the TCS procurement be categorized as, “Make --- Strategic, Complex and Security Sensitive Systems”. Under the Defence Procurement Policy, this will automatically gift the TCS project to DRDO and BEL.
The six private sector rivals for the TCS project are fighting back against what they consider an unfair proposal. Last Wednesday and Thursday, they huddled together with industry bodies, FICCI and CII, formulating their response to the MoD. Their argument: if the MoD ignores the private sector’s world-acknowledged competence in software, IT and communications, and continues sidelining them to benefit DPSUs, it will be hard to convince shareholders to continue investing into defence.
“We fully agree with the need for security”, explains a senior executive from one of the TCS contenders, “but secrecy can be fully preserved by reserving the ‘hopping algorithm’ for the DRDO and BEL. To safeguard the secrecy of a Rs 20,000 microchip, which contains the ‘hopping algorithm’, the MoD is handing them an entire Rs 10,000 crores project.”
An MoD Feasibility Study Group for the TCS has already discussed the issue of secrecy last year. It was decided that top-secret algorithms in the TCS would be developed by the DRDO’s Centre for Artificial Intelligence and Robotics (CAIR), but the private sector could develop the rest of the project.
Indian private companies have played pivotal roles in some of India’s most secret defence projects. Larsen & Toubro, one of the companies being sidelined in the TCS project, built most of India’s nuclear submarine, INS Arihant, and will have a similar role in building successors to the Arihant. Another private company, Tata Power, which built crucial command systems for the Arihant, also designed the core of the top secret Samyukta Electronic Warfare system.
The Kelkar Committee had recommended that such companies, with a track record and potential in defence production, should be designated Raksha Udyog Ratnas (RuRs) and treated at par with DPSUs in the award of projects like the TCS. But, in an inexplicable volte-face after preparing a short list of candidate companies, the MoD decided against nominating RuRs.
If BEL is awarded the TCS project, that windfall will lead to many more. Applying the NTRO’s logic to other command and control projects in the pipeline --- such as the Battlefield Management System (BMS); the Operational Data Link (ODL); and the Net-Centric Operations (NCO) system --- BEL seems likely to be awarded all of these on a single-vendor basis.
The Ministry of Defence has not responded to an emailed questionnaire from Business Standard on the TCS.
“It is particularly ironic that BEL is expected to safeguard security, when it is well known that BEL systems are built mainly from foreign components”, points out an official from a private company that is bidding for the TCS. “BEL’s Artillery Combat Command and Control System (ACCCS), a system similar to the TCS, has computers and software from Israeli company, Elbit. Whether these have come with malware or switches to render the entire system inoperable will only be known in the future.”
Parliament’s Standing Committee on Defence, too, has raised concerns about such “false indigenization”, where DPSUs have allegedly fronted for foreign companies. The Standing Committee’s report of December 2009 notes that, “a sizeable proportion of procurement takes place through the Ordnance Factories and DPSUs, which are indigenous sources, but have to depend on imports for manufacturing the finished product.”
Better BEL can outsource some work to other companies it might be a win-win situation rather than crying hue over this.For this project it was decided that prime contractor will be BEL so no direct contract will be given to any other company
nitesh, hook me up with a source please.For this project it was decided long time back that BEL will be the principal integrator why crying now?
They are doing it alreadyBetter BEL can outsource some work to other companies it might be a win-win situation rather than crying hue over this.
Rage unfortunately I don't have source but information is based on the words from BEL people and IA people who are involved in this project. BEL is going to be prime contractor they will outsource the work to private companies for certain components.nitesh, hook me up with a source please.
I know of several private companies that were bidding for the project. Including the TATA group that leveraged a new umbrella company- TATA Advanced systems-- with EADS Defence, US-based Raytheon and Precision Electronics to bid for the army's communication system.
This will be very much similar to the Samyuktha EW systems; BEL is prime contractor and TATA and L&T are major sub-contractors. I see no problem in this as all will benefit from this thing.Rage unfortunately I don't have source but information is based on the words from BEL people and IA people who are involved in this project. BEL is going to be prime contractor they will outsource the work to private companies for certain components.
The tender was invited so that the products can be chosen between competitors but they ultimately have to sub contract with BEL, that's my impression from the officials I have spoken withIf this project was to be handed to BEL then why was there a tender in the first place?
That's not so bad, The project is till proceeding and there is Private Company participationThe tender was invited so that the products can be chosen between competitors but they ultimately have to sub contract with BEL, that's my impression from the officials I have spoken with
They have a new Buy & Make (Indian). acquisition system.DEFENCE PROCUREMENT PROCEDURE 2008 (AMENDMENT- 2009)
1. After careful consideration and detailed discussion in DAC on 29 Sep 2009,
the following amendments to DPP-2008 have been finalised:-
(a) Introduction of new category for acquisition Buy & Make (Indian).
(b) Sharing of information with Indian Industry.
c) Enhancing role of Independent Monitors.
(d) Removal of ambiguity regarding EMD in signing the Integrity Pact.
(e) Formulation of SQRs including issue of Request for Information (RFI).
(f) Offsets requirement in Option Clause cases and change of offset
partner in exceptional cases.
2. The amendments to DPP-2008 are being issued in the form of Defence
Procurement Procedure 2008 (Amendment - 2009), details of which are given in
the Annexure enclosed. These amendments are incorporated to the existing
DPP-2008 in relevant pages/paragraphs as mentioned and will take effect from
01 Nov 2009.
(a) Acquisitions Covered under the Buy Decision. Buy would mean anCapital Acquisitions are categorized as under: -
(i) In cases categorized as Buy and Make (Indian), RFP will be issued to onlyA New Para 25a to be Added to Chapter I of DPP-2008
25a. Buy and Make (Indian).