Economy

Why corporatisation of Ordnance Factory Board will not work

Twesh Mishra New Delhi | Updated on October 10, 2020 Published on October 09, 2020

Manufacture of a T-90 Tank requires the contribution of 27 Ordnance Factories , after sales support in addition to an intricate supply chain matrix   -  The Hindu

Breaking up the Ordnance Factory Board into individual factories will not be a sustainable exercise due to the existing work division structures and interdependence of units for weapons and ammunition manufacturing.

“ We need to ensure that the war reserve capacities created are retained and not closed due to economic considerations. Secondly due to uncertainties of work load, sustenance of some of the factories might be difficult, these highly specialised factories cannot work alone on profit motives,” SK Chourasia former Director General Ordnance Factories and Chairman of Ordnance Factory Board told BusinessLine. In September, the Centre constituted an Empowered Group of Ministers (EGoM), headed by Defence Minister Rajnath Singh, to oversee the entire process of the corporatisation of the OFB. The EGoM will also deliberate on the transition support and redeployment plan of employees while safeguarding their wages and retirement benefits. The Terms of Reference of the Empowered Group of Ministers also include a decision on the conversion of OFB into a single Defence Public Sector Undertaking (DPSU) or as multiple DPSUs.

 

Inter-dependent units

“There is so much inter-dependence on the factories, for some products 10-20 factories get associated. Production of ammunition involves manufacture of specialised metals, forming, machining, components manufacture, chemical and explosive manufacture, filling and packing etc, even clothing groups of factories get involved to supply parachutes, special cloth bags for propellant packing,” Chourasia said.

“Individual ordnance factories are not self-contained units. For an artillery gun, steel is made in Metal and Steel Factory Ishapore, Autofrettage (pre-stressing) of barrel in Kanpur, trails in Muradnagar, recuperator and buffer in Gun Carriage Factory (GCF), Jabalpur, some components in different factories and integration also in GCF Jabalpur. Nowhere in the world everything is done in one factory. Same is the case of ammunition, mines, and others, the list is unending,” said another person in the know.

“Therefore, making each factory an independent unit will kill the factories. Loss will be to national security,” he added.

Lifecycle support

A sector expert added, “Another example is the manufacture of a T-90 Tank that requires the contribution of 27 Ordnance Factories for manufacture, after sales support and overhaul in addition to a number of private and public sector companies and an intricate supply chain matrix,” the expert added.

“Defence platforms continue to remain in service for almost half a century after induction often with midlife upgrades. For instance, the T-72 tank was inducted in the 1980s and new tanks were manufactured till 2002. All these tanks have been overhauled and a second overhaul has commenced to extend the life for another 8-10 years. The tank has also undergone upgrades. It would, therefore, have a service life of 50-55 years with the Ordnance Factories providing prolonged life cycle support,” the expert said.

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Published on October 09, 2020
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