Strategic partnership (SP) model – procurement of 111 utility helicopters for the Indian Navy
11, Aug 2018
Prelims level : Key features of SP model and about DAC Mains level : Significance, concerns and issues associated with SP model.
Why in News?
- The Union Defence Ministry gave its approval for the acquisition of 111 utility helicopters for Navy at an estimated cost of over Rs 21,000 crore.
- This is the first project under the MoD’s prestigious Strategic Partnership (SP) Model that aims at providing significant fillip to the Government’s ‘Make in India’ programme.
What is Strategic Partnership (SP) model?
- The strategic partner model is intended to enhance competition, increase efficiencies, facilitate faster and more significant absorption of technology, create a tiered industrial ecosystem, ensure development of a wider skill base, trigger innovation and enable participation in global value chains as well as promote exports.
- Under the model, the government intends to boost private sector participation and create domestic expertise in four key areas, namely, fighter aircraft, helicopters, submarines, and armoured vehicles and main battle tanks.
- One company would be selected for each area based on its competence, which would then tie up with the foreign Original Equipment Manufacturer selected through the procurement process, to build the platform in India with significant technology transfer.
- The SP model, if implemented well, is likely to have a number of benefits for both the private sector and the larger Indian defence industry.
- From the private sector’s point of view, the biggest benefit would be the opportunity to participate in some big-ticket contracts – estimated to be worth over two lakh crore rupees in the initial phase of execution ¬– which were hitherto reserved for the DPSUs and OFs.
- Bridging the trust gap: At the same time, the model would also go a long way in bridging the long-standing trust gap between the Indian private sector and MoD, with the latter perceived to be friendlier toward public sector entities.
- Strategic Partners, being private sector companies, are expected to exploit their dynamism, competitiveness, profit orientation, and exposure to the civilian sector for efficient utilisation of the technology, manpower and infrastructure developed in the process.
- The model has a long-term vision of promoting India as a manufacturing hub for defence equipment thus enhancing self-sufficiency and establishing an industrial and R&D ecosystem, capable of meeting the future requirements of the Armed Forces.
- The procurement of the naval utility helicopters will be the first project under the ambitious strategic partnership (SP) model that provides for roping in private firm to build select military platforms in India in partnership with foreign defence manufacturers.
- The utility helicopters will be used in attack missions as well as for search and rescue and surveillance operations.
- The DAC also granted approval to other procurement proposals worth Rs 24,879.16 crore, which include one on buying 150 indigenously designed and developed 155 mm advanced towed artillery gun systems for the Indian Army at an approximate cost of Rs 3364.78 crore.
- These gun systems have been indigenously designed and developed by the Defence Research and Development Organisation (DRDO) and will be manufactured by production agencies nominated by DRDO.
- The DAC also approved a proposal to procure 24 naval multi-role helicopters (NMRH), which will have the capability to engage in anti-submarine warfare. The helicopters are an integral part of frontline warships such as aircraft carriers, destroyers, frigates and corvettes.
- Besides this, the DAC also approved procurement of 14 vertically launched short-range missile systems, among which 10 will be indigenously developed. The systems will help boost the self-defence capability of ships against anti-ship missiles.