The Hindu Business Line : Panel submits report on Keltec-DRDO joint venture

Kochi June 12 A high-power committee constituted by the Defence Ministry to study the proposed joint venture between the Defence Research and Development Organisation (DRDO) and the State-owned Kerala Hitech Industries Ltd (Keltec) has submitted its report to the Defence Minister, according to senior official sources.

The committee headed by the former Head of the Hindustan Aeronautics Ltd (HAL), Bangalore, Mr Krishna Das Nair, with senior officials from the DRDO has presented its recommendations, which are understood to have suggestions on possible management structure and vision for the next 10 years after the proposed joint venture becomes a reality, they said.

According to them, the Defence Minister has to take a final decision and that is expected soon.

The State Government had arrived at a decision earlier after three round of talks with the Defence Ministry and DRDO officials to hand over Keltec. According to the officials, all the "assets and liabilities of Keltec" would be handed over.

Following this decision, the Defence Ministry constituted the committee to study the feasibility for a possible tie-up with Keltec, which is already a strategic supplier of high-precision components to DRDO and ISRO.

Keltec, they said, is a high precision engineering manufacturing unit, supplying defence and space-related components to DRDO, ISRO, BARC and so on, and hence, a joint venture would be mutually beneficial.

The officials said that the defence procurement during the next five years was estimated at Rs 5 lakh crore. As per government policy, components worth 30 per cent of the bid value should be procured from the country and as such Rs 1.5 lakh crore worth procurement has to be made from indigenous sources, they said.

Keltec could become one of the beneficiaries given its status as a supplier of high-precision engineering products to the strategic establishments. A joint venture or DRDO take over would help expand its operations apart from strengthening downstream industries creating long-term employment opportunities, they said. Small and medium scale units in engineering, electrical and electronic sectors could also get a boost, they said.

The turnover of Keltec last fiscal was at Rs 20 crore excluding the cost of materials, such as titanium metal and so on, which are supplied to the unit by the Defence and Space organisations.

The State Government has already identified some foreign vendors for future tie-up as buyers for Keltec products, they said.

The small and medium units in the State are at present lagging behind for want of proper marketing avenues. This problem could also be addressed once the company enters into a tie-up with the DRDO, they added.

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