NEW DELHI: In a move that could change India’s defence acquisition process, government plans to enter into “strategic partnership” with domestic private firms in six critical areas, replacing the system of awarding contracts to lowest bidder.
Manohar Parrikar led defence ministry has set up a high powered committee under the chairmanship of former DRDO chief V K Aatre to recommend guidelines for selecting Indian private firms for strategic partnership under ‘Make In India’ initiative in the six areas which include submarines, aircraft and missiles. “Instead of asking for tendering and all those things, a process of selecting a right partner is chosen. If you select through L1 (lowest bidder), you may end up with someone who is not capable. My aspect of success is capability of that partner,” Parrikar told reporters here on the sidelines of a FICCI organised seminar. He made it clear that there won’t be any repetition of the entity. “There won’t be repetition. If an X group has been taken in as a strategic partner in one segment, it will not be considered for another segment. It can participate in partnership for other products”. Explaining the concept, Parrikar gave the example of state-run Mazagon Dock Limited (MDL) which is building six Scorpene submarines and is also vying for a contract for additional six convention submarines worth over Rs 60,000 crore.
“It is obvious if you have an MDL which has the capacity, you can have one private sector (entity). You cannot have 10 private sectors (entities) or two private sector (entities) because obviously you cannot go on buying 100 submarines. The number is 30 as per Cabinet Committee on Security and maybe we will go for more. Basically, you need one or two shipyards,” he said.