Tuesday, August 10, 2010

Private Indian Companies to Compete for Development of Future Infantry Combat Vehicle for Indian Army

Three Indian private companies with ambitions in the defence sector won a major battle when they were invited to compete, on level terms with the public sector, in developing a Future Infantry Combat Vehicle (FICV) for the Indian Army. In the FICV project, the Ministry of Defence (MoD) has conceded almost everything that the private sector has demanded since it was allowed into defence production in 2001. The MoD will fund 80 per cent of the development cost of the FICV. And, with the army looking to buy in quantity, economies of scale are guaranteed during production.

For those who did not read yesterday’s Business Standard, four Indian companies — Tata Motors, the Mahindra Group, L&T and the MoD-owned Ordnance Factory Board (OFB) — will submit proposals on August 25 for designing and building 2,600 new-generation FICVs. Two vendors with the best proposals will be invited to develop a prototype each, contributing just 20 per cent of the expense. Then, after the army chooses the better design, the winner will build 65-70 per cent of the army’s requirement of FICVs; the runner-up will build the rest.

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