A consortium led by Larsen & Toubro (L&T) has been selected by the Ministry of Defence to bid for a Rs 10,000-crore order to develop the ‘Tactical Communications System’.

The only other bidder selected for this is Bharat Electronics Ltd (BEL), a public sector company that comes under the Ministry of Defence.

It is learnt that the other two companies in the L&T consortium are HCL and a Tata group company. It is also understood that initially there were six private sector players in the fray, including Wipro, Mahindra Defence Systems and Rolta, but the other three are now in a consortium.

‘Tactical Communications System’ refers to a telecommunications network that can be rolled across a battlefield. It functions like a regular mobile telecom network and provides signals to the army. As the exchanges are mounted on high mobility vehicles, they can be rolled out in difficult-to-reach, hilly terrain and can handle an enormous quantity of data and maps. It usually calls for extremely short installation times, sometimes just hours, in order to meet the requirements of frequent relocation.

The L&T‐led consortium and BEL will prepare a Detailed Project Report (DPR) in the next six months. The prototype, expected to be ready in 18 months, is likely to cost Rs 200-300 crore, says a report of Edelweiss, released today. The government will fund 80 per cent, and bidders will bear the rest.

Over the next 6‐8 months, evaluation trials are expected, post which the ministry will choose the developer. Thus, the deal will take about two years to materialise into order flows for the chosen company, says Edelweiss.

It says that the deal may also be split between the two, with major share going to the entity with better designs. “We believe this could be a decent margin order for L&T, given limited competition,” it says.

(This article was published on June 21, 2012)
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