NEW DELHI: The Centre has decided to corporatize the Ordnance Factory Board (OFB). The board will cease to exist after Wednesday as the assets, employees and management of the 41 factories will get restructured into seven defence public sector undertakings.
The memorandum, issued on September 24 by the Department of Defence Production, said, “Accordingly, on and with effect from the appointed date, OFB, which has been set up vide Ministry of Defence letter no. 1(82)/78/D(Fy.I) dated 09.01.1979, shall cease to exist as a body. Further, the Board position of Member (Finance), OFB shall also cease to exist on and with effect from the appointed date,”. As per it, the order will come into effect from October 1 (designated date).
As per the order, around 70,000 employees working in 41 factories will get subsumed into seven government entities named Armoured Vehicles Nigam Ltd, Advanced Weapons and Equipment India Ltd, Munitions India Ltd, Troop Comforts Ltd, Yantra India Ltd, Gliders India Ltd and India Optel Ltd.
It was on June 16 this year that the government had approved the dissolution of the OFB in order to corporatize them. The Government, as per the new order, “has decided that all employees of the OFB (Group A, B &C) belonging to production units and also the identified non-production units... shall be transferred en-masse to the new DPSUs on terms of foreign service without any deputation allowance (deemed deputation) initially for a period of two years from the appointed date.”
The new DPSUs will frame rules and regulations related to the service conditions of the absorbed employees.
The process was initiated after the question about the quality of ammunition were raised by the forces. More than 50% of ammunition, 90 of the total 163 types, are supplied by the OFB. Also, the overhead costs were found high. The OFB came into existence in 1775.