The Future Infantry Combat Vehicle (FICV) project worth about Rs 60,000 crore which began nearly a decade ago could finally progress this month. A panel of independent expert monitors (IEMs), appointed by the defence ministry, has found that the evaluation process for selecting firms to produce prototypes of the FICV is correct and the project should move forward.
The panel also said that a complaint filed by Mahindra is unfounded and was lodged to stall the procurement procedure, a top ministry source said. A MoD department dealing with the project had questioned the evaluation process at a late stage delaying the project. In addition, the complain from Mahindra, one of the contenders, added to this delay.
Experts say that it is ultimately the Army which has been adversely affected with the delays. It desperately wants to replace its Soviet-era BMP-2 infantry combat vehicle fleet. So, the FICV program has to progress because it will not just be a lethal platform, but also be the base for other defence R&D programs and a test of the Make-in-India initiative.
Explaining what led to the delays, sources said that the second expression of interest (EoI) in the project was issued to 10 vendors on July 16, 2015. An EoI seeks a firm’s proposal, capital expenditure and other details. The MoD had approved that government DPSU, Ordnance Factory Board (OFB), with two private firms would make the prototype. On February 15, 2016, the MOD received responses to the EoI from L&T, Mahindra, Reliance Defence,
Consortium of Tata Motors and Bharat Forge, OFB and Consortium of Tata Power SED and Titagarh Wagons Limited.
A MoD Integrated Project Management Team (IPMT) evaluated the responses on a few criteria such as commercial viability and technical capabilities of the firm. The IPMT submitted its report containing the shortlisted firms to the acquisition wing for approval in November 2016.
“The Department of Defence Production (DDP) mulled recommendations it received to either start the project afresh or select the five private industries to submit the detailed project report (DPR),” explained sources.
However, the 2008 version of the defence procurement procedure, according to which the procurement is being done, states that the Defence Procurement Board (DPB) would select the two best development agencies (DAs) out of the shortlisted companies for the design and development of the prototype.
Only then will these two agencies prepare the DPR and go on to make the prototype. Following this delay, the MoD’s higher authorities overruled the recommendations and instructed the DPB to approve the DAs. Two DPB meetings were held on September 19 and November 24 last year, but the decision on approval of the DAs is still awaited, explained sources.
Meanwhile, Mahindra had lodged a complaint, questioning the empanelment of three other vendors by the DDP for issuing the second EoI, said sources. ET had sent a questionnaire to Mahindra on its complaint, but it didn’t elicit a response. It had also sent a similar questionnaire on the matter and the project’s status to the MoD, but didn’t receive an official response. Sources, however, said that in November 2017, the complaint was referred to the panel of IEMs.
A senior MOD official on condition of anonymity said, “the complaint received by Mahindra has been examined by an external monitoring agency and found to be lodged with the intention of stalling the process. The complaint has been closed. The FICV program is on track.”
Sources added that the panel had submitted its report earlier this month, which also indicates that the evaluation process for selecting DAs is correct. “A decision for selecting DAs is likely to be taken this month,” said the official. The project had also faced delays prior to the development of the two main issues. The first EoI for procuring, the 2610 FICVs, was issued on May 25, 2010.
“It was retracted on December 4, 2012 due to perceived inconsistencies in the evaluation of the EoI responses,” said sources. It took close to three more years for issuing the second EoI in 2015, following prolonged discussions between the MoD’s concerned departments over the EoI evaluation method. Sources added that the FICV production was to start in 2017.
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