Why in News

• The Army set to procure Spike-LR Anti-Tank Missiles from Israel and Igla-S Very Short-Range Air Defence Systems (VSHORAD) from Russia through a set of new financial powers for emergency procurements sanctioned by the Defence Ministry

Details

• Under the latest emergency financial powers, armed forces have
• been given a free hand to procure equipment worth up to ₹300 crore on a priority basis. The Request For Proposal (RFP) for the two deals have been issued and negotiations are on process
• Under the emergency route, the Army is looking to procure about 12 launchers and around 250 missiles for each system.

Spike LR

• Spike is an Israeli fire-and-forget anti-tank guided missile and anti-personnel missile with a tandem-charge HEAT warhead currently in its fourth-generation. It was developed and designed by the Israeli company Rafael Advanced Defense Systems. It is available in man- portable, vehicle-launched, and helicopter-launched variants. Long range version. Maximum range is 4,000 m (2.5 mi) and it is used by infantry and light combat vehicles

VSHORAD deal

• The deal for VSHORAD, to replace the legacy Igla systems in service, began in 2010 and has since seen several trials and re-trials with three contenders in the fray
• While the benchmark price determined was just over $2 bn, Rosoboronexport’s bid was much lower at around $1.47 bn, while SAAB’s bid was at about $2.6 bn and MBDA around $3.68 bn.
• This led to a division within the Ministry on how to proceed given such low bid from the Russians compared to the benchmark price, but eventually Igla-S was declared the winner. “The deal is currently at the Contract Negotiation phase,” the source said.
• Officials said the emergency procurements were one of critical procurement and not related to the acquisitions through the regular route, in a bid to assure that these would not impact the regular deals. In the case of VSHORAD, the other two vendors lodged protests and wrote a series of letters to the Defence Ministry on several occasions alleging procedural violations favouring Igla-S which were rejected.