India's Defense Acquisition Council (DAC) will take up an Army proposal to buy 145 ultra-light howitzers (ULHs) from the U.S.-arm of weapons manufacturer BAE Systems, which has made a revised offsets offer to revive the sale that had stalled in October 2013.
Arming India had in January 2015 first reported the revised offsets from BAE Systems and the compelling offer of the company's U.S.-arm shifting the guns' assembly, integration and testing facility to India.
"The ULH proposal is on the agenda of the DAC meeting on May 13. We are expecting it to be taken up and cleared," a Defense Ministry official said here on May 12, 2015.
If cleared, the ULHs purchase by India will be the second decision of the Narendra Modi government to fast-track the modernization of the Indian Army's artillery, considered to be the weakest link in its operational capability. In November 2014, the DAC had approved the purchase of 814 guns of 155-mm 52-caliber mounted guns.
The 155mm 39-caliber ULH procurement will also be a critical element in arming the Army's Mountain Strike Corps that has been raised with Panagarh in West Bengal as its headquarters to carry out a counter-offensive against the 4,057-km Line of Actual Control with China, as and when there is an armed conflict.
Army Can't Fight A War Beyond 20 Days, Says Government Auditor
Only on May 8, 2015, the Comptroller and Auditor General (CAG) had reported to Parliament that the Indian Army's War Wastage Reserve is not enough to fight a war for even 20 days, whereas it should have a minimum stock for 40 days. Availability of some of the ammunition types, accounting for about 50 per cent, had dwindled to less than 10 days.
This critical shortage impacted the operational preparedness and training regimen of the Army, according to the CAG report.
"In disregard of the War Wastage Reserve scales of 40 (I) days, based on which Annual Provisioning of ammunition was carried out by DGOS, indent for procurement of ammunition by AHQ (Army Headquarters) was placed on the basis of 'Bottom Line' or 'Minimum Acceptable Risk Level' (MARL) requirements, which averaged to 20 (I) days," the report said.
"As a result, the policy for the size of national stockpile was not implemented by the agencies responsible, citing the reasons of budgetary constraints, and inadequate production capacity with OFB (Ordnance Factory Board)," it said.
Director General Ordnance Services (DGOS) is responsible for overall management of ammunition in the Army and carries out annual provisioning and procurement. Most of the ammunition for the Army is procured from OFB. The equipment sustenance, managed by the Master General Ordnance (MGO) in the Army alone is worth Rs.80 billion annually.
To meet this requirement, ten factories of Ammunition and Explosives Group under OFB are engaged in production of ammunition and explosives. Balance requirement of ammunition is met from trade and through imports.
The CAG said stocking of ammunition even at MARL was not ensured, as availability of ammunition as on March 2013 was below the MARL in respect of 125 out of a total of 170 types of ammunition, which accounted for 74 per cent.
"We found that availability has been dwindling over the years as types of critical ammunition (available for less than 10 days (I)) had increased from 15 per cent in March 2009 to 50 per cent in March 2013. The percentage of critical ammunition in high caliber ranged up to 84 per cent during the five years period of audit," the report said.
In order to build up ammunition stock level up to MARL and to provide enough lead time to OFB for procurement of raw material and streamlining the production, the Defense Ministry placed a five-year Roll On Indent on OFB in
Even though the ammunition requirements covered under Roll On Indent had been worked out in consultation with OFB and the corresponding annual budgetary requirements accepted, in principle, by the Ministry at the time of approval of the Roll on Indent, the projection of the requirement of fund by OFB was much lesser vis-a-vis the targets fixed.
"It was therefore, a foregone conclusion that the OFB would fail to supply the targeted quantity. Despite the acceptance of targets for supply of ammunition covered under the first Roll On Indent, the OFB failed to supply the targeted quantity, with shortfalls ranging up to 73 per cent of the total types of ammunition," the CAG said.
Army import of ammunition happen through both capital and revenue route. Import, as an alternate source of procurement, proved to be unreasonably slow as no procurement of ammunition took place against the nine items initiated for procurement through capital route during the period 2008-2013 due to single vendor situation, complexities in Transfer of Technology, and delay in finalization of General Staff Qualitative Requirements (GSQR).
"In case of revenue procurement also, the success rate of contracts fructifying was as low as 20 per cent. Thus, due to delay in finalization of import contracts, the build-up of ammunition has been badly hampered," it added.