Private sector cries foul over Rs 12,700-crore Army fleet upgrade project

NEW DELHI: A proposal to hand over a Rs 12,700-crore upgrade of the army's fleet of infantry combat vehicles to the public sector has the private industry up in arms, with several major companies already heavily invested into the project crying foul.

While a final decision is yet to be taken, the army has proposed that the comprehensive upgradation of its BMP 2 armoured vehicles — 969 units are to be modernised with new fire control systems, Kornet E anti-tank missiles and third generation night vision capability — be handed over the Medhak Ordnance Factory.

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The private sector had its eyes set on the project, given that it did not involve the production of a major system but would give the winner an edge in acquiring technology that could be leveraged for future infantry combat vehicles.

Several companies that ET spoke to said on the condition of anonymity that they would lodge protests against the move to hand over the project on non-competitive basis and that industry promotion bodies could also get involved.

“This is a project that is best suited for the private industry. We cannot make in India before first going through upgrade in India,” a top executive told ET.

In the past, it has been reiterated several times by industry bodies that all upgradation projects should be earmarked for the private sector as it would first enable them to get basic technology and knowhow in place before moving to major system integration.