Thursday, 22 November 2012

Futuristic Infantry Combat Vehicle: Biggest Indigenous Defence Project

The nearly $10 billion Indian Army’s Futuristic Infantry Combat Vehicle (FICV) project is already the largest indigenous defence programme. The FICV project has been classified under the "Buy & Make” category mentioned in Defence Procurement Procedure (DPP-2011). The vendors for Indian Army’s FICV project will be shortlisted on the basis of technical, functional and commercial aspects, and only local Indian firms can bid. However, local firms can opt for technology tie-ups with foreign companies. It will help develop a whole eco-system of small and medium sized companies as suppliers to the winners of the contract. The FICV development will provide a big boost to India’s pursuance of self-reliance and indigenisation in the form of a robust domestic defence industrial base.

The backbone of the Indian Army’s infantry combat vehicles is the Russian-designed BMP (‘Sarath’ BMP-II) series which are being made by Ordnance Factory Board (OFB) since its induction in 1980. Approximately, 1900 ICVs BMP-2/2K are in service with the Indian Army and are likely to remain operational till 2017. The Indian Army is worried about its operational capability, particularly in terms of rapid deployment post the 2017 scenario. Thus, the FICV project is a strategic and critical programme which will define Indian Army’s mobility, deployability and lethality in the future to come and its ability to execute its proactive strategy.
The FICV project envisages 70:30 allocations to the winner and the runners up of the contract with an 80:20 funding distribution by the Government and industry respectively. The Army has identified a need of nearly 2600 ICVs over 20 years with the following specifications:

a)            Weight of around 20 tonnes so that it can be transported by air and other means
b)           Strike power of a 45 tonne Main Battle Tank (MBT) including a rapid fire cannon, a 7.62 mm machine gun, grenade launcher and an anti-tank missile
c)            To be operated by a three man crew consisting of the commander, gunner and driver with an additional capacity to carry seven fully equipped infantrymen
d)           Fully amphibious and all terrain capability for high mobility to keep pace with armour
e)           Buy and Make (Indian) category, open only to domestic firms

The Abhay ICV developed by Defence Research and Development Organisation (DRDO) will act as a technology demonstrator based on which Future ICVs can be designed and developed. The success of the indigenous Abhay project has led to the creation of technology base and know-how for the envisaged development of FICV in Public-Private Partnership mode. The major sub-systems where the Abhay project has shown remarkable progress are the: Track, Hull and Turret. The FICV project can be touted as the biggest example of Public-Private Partnership to date and has opened the doors for a viable participation from private industry. The Ministry of Defence (MoD) needs to capitalise on this great opportunity to involve the private sector and provide Indian Army with the best equipment of its kind in the world. The basic parameters of policy in form of DPP 2011, funding allocation, contract risk-reward mechanisms, proven technology demonstrators and order commitments from the Armed forces are all in place to convert the opportunity into a huge success story.

No great endeavour is without obstacles and challenges and the ability to identify and resolve the issues in a timely manner will determine how the FICV project proceeds. The key challenge which can be rectified in a timely manner is the ability and capacity of MoD to provide qualification and selection results of vendors in a time bound fashion. The FICV project approval was supposed to be completed in eight months according to MoD’s own guidelines starting Oct 2010, and two years later the project is still in a limbo. This delay has already dampened the spirits of the main players in the arena namely the Tatas, Mahindras and L&T who are bleeding money for every extra day spent. This will lead to serious trust deficits between the public and private sectors in the future. The other key challenge is the inability of domestic Defence Public Sector Undertakings (DPSUs) and private companies to absorb high end technology. Although the FICV project has been marked as a Buy & Make (Indian) project, no substantial R&D contributions have been forthcoming as was the past experience with other high end Transfers of Technology cases. Other issues are more technical such as the ability of the FICV to be fully amphibious coupled with substantial fire power within a 20 tonne range so it can be transported by aircraft or helicopters. Systems integration is another issue as Indian companies have little experience in this field and the ability to partner foreign vendors have given rise to the fear that quality high end work will be done abroad.

The latest on FICV programme has little to cheer about as the MoD has been sitting on the project for nearly two years now and the private sector getting more impatient by the day and that too after the successful technology demonstration by DRDO in the form of Abhay ICV. The process needs to be fast tracked so that the deadline of producing a fully workable FICV by 2015 can be met and mass production started before the expiry date of 2017 for the BMP series. Timely approvals by the MoD will not only provide closure of critical gaps in Indian Army’s operational capability but will also save time and cost overruns in a budget constrained country like ours.

Some of the new techniques on the horizon to design and develop FICVs in short lead times are the virtual prototyping and simulation driven processes which automate a great deal of the tradition design and develop cycle before developing a physical prototype. The mandated clause of at least 50% indigenous content should be forcefully enforced so as to develop in-house defence manufacturing capabilities. The decision makers are waking up to the reality of the multi-front threat that India faces to its national security and the lack of indigenised modernisation as is explained by the comment from DG Acquisitions Mr. Vivek Rae “There will be a list of 150-180 ‘Make’ projects that (the MoD) will put on the web. With Indian companies tying up with one another and competing, I think we could energise the industrial base of the country. The sheer act of design and development, sharing of risks and sharing of costs (in an 80:20 ratio at the development stage) will be a very significant move forward”.

The principle of continuity also needs to be exercised wherein the FICV project team doesn’t suffer from tenure based system of postings and experts are available from start to finish with sufficient stakes in the success of the project. Indian private participants should choose their foreign partners very carefully based on their expertise and business probity, as is the case with Tatas probable partnering with Rheinmetall which has its Air Defence section under CBI scanner for alleged bribery. Currently, defence is worth less than Rs 2,500 crore to the private sector. But that is set to change with the Centre keen on making domestic companies meet 70 per cent of the country's defence needs within the next five years. For Indian companies, that is an opportunity of at least $50 billion (12.5 lakh crore).

The reason why the FICV was selected to be an industry-oriented project was because of a major decision taken in by the Ministry of Defence that DRDO would focus its research and development effort on projects of strategic value while the Indian defence industry would be involved in high technology projects with two specific aims; one to develop required technology base in the defence industrial sector and two, allowing enmeshing of design and development by a single agency, in this case the private industry. The FICV programme will complement the Tactical Communication Systems and Main Battle Tank programmes to provide the Indian Army with the ability to not only deter but also defeat the enemy decisively in conventional battle, especially when India faces threat from two fronts at the same time.  The FICVs can also be provided to our Central Armed Police Forces (CAPF) and state police forces operating in hostile regions particularly in the Naxal infested areas of the red corridor.

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