Ordnance Factories: Need for Modernisation
23 Jun, 2000 · 373
Wg Cdr NK Pant explores the areas in which the Indian Ordnance Factories Organisation need modernisation to match up to the expectations of the Indian Armed Forces
It is ironical that in after the Kargil conflict, the Ordnance Factories Organisation (OFB) was patting itself on the back for its support role through advertisements in prominent national dailies and news magazines; but the Indian army was preparing a long list of armaments and support equipment for procurement from abroad. The Ordnance Factories Organisation, India’s largest departmentally run industrial undertaking, comprising 39 factories all over the country, is engaged in manufacturing of ammunition, armaments, battle tanks, armoured troop carriers, specialised transport vehicles, optical instruments, floating bridges, parachutes and a variety of other equipment.
India
has adversely commented on the poor quality of arms produced by the OFB in his latest report. A large quantity of defective gun barrels valued at more than Rs 45 crore for T-72 tanks has affected the tank’s performance, because the ordnance factory manufaturing them did not comply with the critical heat treatment schedule prescribed by the original Russian designers. In fact, this report resembled another relating to defective manufacturing of 155 mm ammunition shells, mismatch of fuses and primers, long delays in delivery of indented howitzer ammunition with incredibly high rejection rate which compelled the army to import these items at a cost of Rs 188 crore.
The Comptroller and Auditor General (CAG) of
Have Ordnance Factories, established with the sole objective of equipping the armed forces, been able to meet the requirements of front line troops, especially when defence technologies are undergoing rapid transition and sophistication? Had this been so, the Indian army would not have needed to resort to extending the average life span of its equipment for incredibly long periods of 30 years, while showing a natural preference for state-of -the-art combat hardware available in the international arms bazaar.
Army formations down the line are faced with perennial problems such as not getting the indented combat and support gear on time. For example, winter clothing usually reaches the jawans posted in remote Himalayan posts after the winter season has set in. Deadlines for essential supplies are often not met and there is inadequate delivery of arms, ammunition, tanks and vehicles, thus increasing deficiencies which keep piling up with the passage of time. The Standing Committee on Defence has gone on record stressing the need for radical improvement in the performance of OFs.
There are several problems dogging the two centuries old Ordnance Factories Organisation. Most of the factories, except for three or four plants set up in recent years, still employ technologies that are nearly three decades old, and are labour intensive. In the past, whenever the process of modernisation was initiated, it was related to a specific product. The Services provide a large captive market but do not get proper value for their money as the items produced are not cost-effective. In this respect, the observation of Defence Secretary TR Prasad that the annual turnover of Maruti Udyog Limited with 5000 workers is more than Rs 6000 crores, while the OFB with 1.53 lakh workers has an annual turnover of a mere Rs 4000 crores, should be noted.
The Ordnance Factories Organisation has plans to invest approximately Rs 1250 crores during the 9th Plan, apart from Rs 1450 crores into modernising existing plant and machinery. The armed forces’ future dependency on state-of-the-art technology will require induction of modern plant and machinery and trained manpower to operate them. As a consequence, outdated labour intensive capital equipment needs to be phased out as soon as possible. There is also a compelling need for cost effectiveness and competitiveness in pricing. The wisdom has finally dawned on OFB officials that the scope for increasing prices is limited, as the army also has a fixed budget; hence increasing issues to the army in physical terms needs to be enhanced at reduced prices by cost controls. In addition, market forces should be allowed to play a role in determining the cost of products. There are no two opinions regarding the need to concentrate on manufacture of high technology armaments while downloading production of clothing and low-tech items to the private sector. The OFB’s technological vision for the next century requires initiating steps like privatisation or disinvestment on the lines of other PSUs in respect of low tech factories to find the finances for modernisation.
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