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Chennai , Oct. 16

LARSEN & Toubro and Mahindra & Mahindra are among the companies that have been awarded defence equipment contracts by the Centre in the wake of the segment being opened up to private sector participation.

"I am informed that so far 13 letters of intent have already been issued," said Mr O. Rajagopal, Minister of State for Defence Production, on the subject of private sector participation. Mr Rajagopal addressed private sector officials here on Thursday at a conference organised by CII to highlight business opportunities in defence equipment.

Defence Ministry officials said L&T, M&M and Mumbai-based Max Aerospace were among the companies that were picked to manufacture equipment.

L&T has been asked to manufacture warships and tanks, among other equipment. M&M would produce light armoured multi-role vehicles, and Max would be engaged in making avionics.

Defence Ministry officials said these contracts differed significantly from regular contracts. For instance, short-listed companies would need a Central Government approval before they could sell the equipment to other customers.

During the course of his address, Mr Rajagopal said more opportunities would come the private sector's way. Currently, state ordnance factories outsource about 20-40 per cent of their requirement. Mr Rajagopal said the outsourcing requirement was likely to increase in future.

Mr Rajagopal said the Defence Ministry plans to purchase about 70 per cent its requirement from public and private sector firms by 2005. Ministry officials indicated that the annual turnover in defence equipment is Rs 13,000 crore at present.

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