Due to poor quality ammunition, Army lost 27 personnel, ₹960 crore

Indian Army soldiers carry arms and ammunition. Representational image   | Photo Credit: AP

NEW DELHI The Army lost 27 personnel and suffered 146 injuries between 2014 to 2019 due to poor quality of production by the Ordnance Factory Board (OFB) while it disposed off ₹960 crore worth of ammunition in the same period before their shelf life was complete, a government official said.

“Lack of accountability and poor quality of production has resulted in frequent accidents over the years with injuries and death of soldiers,” the official said. On an average one accident has taken place per week, internal data of the Army from 2014 to 2019 shows. There were 403 incidents between 2014 to 2019 due to which the Army suffered 27 deaths and 146 injuries.

A significant quantity of products were also disposed off without completing shelf life due to poor quality of production. About ₹658.58 crore worth of ammunition within shelf life was disposed off between April 2014 and April 2019, the official said. In addition, after the accidental mine explosion at Central Ammunition Depot, Pulgaon in May 2016, ₹303.23 crore worth of mines were disposed off. “₹960 crore loss roughly means 100-155 mm medium artillery guns could have been bought for this amount,” the official said.

Benefits of corporatisation of OFB

The proposed corporatisation of the OFB will give it autonomy on par with Defence Public Sector Undertakings (DPSU) and a high level government panel is working out a roadmap to raise OFB’s turnover to ₹30,000 crore by 2024-25 annually against existing ₹12,000 crore after the move, the official stated. The Army has made several recommendations on the proposed move to improve efficiency.

Post corporatisation, OFB will be allowed to forge partnerships with the private sector as per the MoD’s approved policy and will continue to receive orders from the country’s security forces, the official said. “It will also be granted a special preference of 15% above L1 price for “Make” and “Buy and Make” category products. The Centre will support OFB in case of losses, by way of loan for 30% of the total shortfall and by way of equity investment for balance 70% of the amount,” the official said.

The working capital for the next five years will be provided by the Department of Defence Production (DDP) as a one-time corpus fund and capital investment for ongoing and sanctioned projects will also be provided.

The corporitisation is essential, as the OFB has regularly performed below its potential over last few decades and has also been found to be draining the Defence Budget with over pricing of material produced. “It has monopoly over several products required by the armed forces, minimal innovation and technology development and hardly any incentive to improve quality and cost efficiency, with almost nil accountability for its products,” the official stated.

The OFB with 41 factories, 13 development centres and nine institutes currently functions directly under the DDP which significantly limits its autonomy in terms of functioning. The corporatisation was first suggested by Nair Committee in 2000 and thereafter by Kelkar Committee in 2005 and Raman Puri Committee in 2015.

Officials highlighted a series of benefits that would accrue over time with the corporatisation including improved efficiency, competitive pricing, flexibility in technology acquisition, financial independence, optimum use of idle capacities, increased defence export and improved quality of equipment.

There were protests from the trade unions over the proposed move terming it as a move towards privatisation, but the indefinite strike was called off after assurances by the Government.

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Printable version | Oct 28, 2020 3:03:17 PM |

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