MoD blames French vendor, Naval Group, for Scorpene delays - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Wednesday 17 March 2021

MoD blames French vendor, Naval Group, for Scorpene delays

The delays have been caused due to various defects observed during the trials of the submarines, requirement of certain modifications and delays in the supply of items": MoD


By Ajai Shukla

Business Standard, 18th Mar 21


The Ministry of Defence (MoD), while answering questions in Parliament on Wednesday, squarely blamed French warship builder, Naval Group (formerly DCNS), for long delays in constructing six Scorpene submarines for the Indian Navy at Mazagon Dock Ltd, Mumbai.


The delays have been caused due to various defects observed during the trials of the submarines, requirement of certain modifications and delays in the supply of items required for construction by the collaborator/ToT (transfer of technology) provider - Naval Group, France,” stated the MoD.


The MoD declined to say how long submarine deficiencies would continue. “In the interest of national security, the details cannot be divulged.  However, the existing submarine fleet is being maintained combat worthy through life extension and modernization/upgradation,” it stated.


Building border roads faster


With road infrastructure crucial for the Indian Army in Eastern Ladakh, where it has faced off against Chinese troops for the last 11 months, the MoD told Parliament on Wednesday: “There has been an increase in [India’s] pace of construction during the last two-three years.”


The MoD said the Border Roads Organisation (BRO) has been entrusted with building 61 “strategically important” roads, measuring 3,324 kilometres (km), which have been classified as “India-China Border Roads (ICBRs).”


Of these, “42 roads of length 1530 km are completed,” stated the MoD.


In news that the army will welcome, the MoD said: “Connectivity has been achieved on 59 roads of length 3205 km and on the remaining two roads of length 118 km, the unconnected portion is 29 km.”


That means that, other than two roads, the remaining 59 roads are usable, even though just 42 are fully complete. 


Accounting for that, the MoD stated: “There are delays in execution of some road projects due to certain impediment such as difficult terrain, limited working season, difficulties in availability of construction material, delay in forest/wildlife clearance and delay in land acquisition, etc.”


Domestic equipment procurement


The MoD has marginally enhanced the funding reserved for buying domestic weaponry from the capex allocation for the coming year. “The funds have been earmarked for all three Services in the ratio of 64:36 between domestic and foreign procurement in the Capital Acquisition Budget for the year 2021-22,” it stated in Parliament.


Last month, Defence Minister Rajnath Singh had said the MoD “has planned to invest, about 63 per cent of the (capex) outlay for 2021-22 on domestic procurement, i.e. about ₹70,221 crore.”


Focus on MSMEs


The MoD provided a detailed answer to a question on the support being provided to micro, small and medium enterprises (MSMEs) in defence production.


Revealing that procurement by the MoD from MSMEs had actually fallen over the last two years, the MoD’s procurement from MSEs was Rs 12,112 crore in 2018-19; fell to Rs 9,091 crore in 2019-20 and stood at Rs 9,294 crore in the current year (figures available till March 11).


In its reply, the MoD summarised a list of measures it had drawn up to promote procurement from MSMEs (see table below).




TABLE: Promoting MSMEs in defence


·      Procurement cases priced at under Rs 100 crores are reserved for MSMEs, provided at least two MSMEs are eligible to participate.


·      Projects under the Make categories, with value not exceeding Rs 100 crores/year based on delivery schedule at the time of seeking Acceptance of Necessity (preliminary clearance for procurement) are earmarked for MSMEs.


·      The Offset Policy has been revised in the year 2020, to provide foreign vendors a multiplier of 1.5 in cases where the Indian Offset Partner is a MSME.


·      The Department of Defence Production regularly conducts outreach programs to interact with industry associations, academia and MSMEs to spread awareness about the potential export opportunities.


·      Innovations for Defence Excellence (iDEX) was launched in April 2018 to create an ecosystem that fosters innovation and technology development in defence by engaging MSMEs, start-ups, individual innovators and academia.


·      The services will earmark a total of Rs 1,000 crore towards iDEX during Financial Year 2021-22 from within their domestic procurement allocations.


·      An indigenization portal called SRIJAN was launched in August 2020 for the defence public sector to support MSMEs/start ups/industry in carrying out import substitution. 


·      Defence Industrial Corridors have been established in Uttar Pradesh and Tamil Nadu to grow Indian defence industry, especially MSMEs. 

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