Ordnance Factory Board will be corporatized to improve efficiency, says MoD

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New Delhi | Updated: August 22, 2019 2:27:18 PM

Despite the countrywide strike by the unions operating 41 Ordnance Factories, the Ministry of Defence says the proposal to corporatize the Ordnance Factory Board (OFB) into a public sector corporate entity will improve efficiency.

Almost 89 per cent overall indigenisation in the system and 97 per cent in ammunition as of date

Despite the countrywide strike by the unions operating 41 Ordnance Factories, the Ministry of Defence says the proposal to corporatize the Ordnance Factory Board (OFB) into a public sector corporate entity will improve efficiency.

Such a step will reduce import dependence and enhance combat the efficiency of the armed forces.

Welcoming the proposal of the MoD, speaking to Financial Express Online on condition of anonymity, a former official said, “The proposal made is in the interest of the OFB and is the proposal is for making it a DPSU status with all interests of present employees aimed to be protected. It is the way forward provided it leads to enhanced efficiency, flexibility, indigenous technology growth, accountability and quality control. It cannot be old wine in a new bottle.

“OFB 2.0 must transform from a captive defence equipment producer to a competitive, user-centric, defence capability enhancer with demonstrative capabilities. Thus timely production, self-certified quality assurance, competitive cost, indigenous technology up-gradation, and supply chain management are areas for focus. It should cut down present silos and bureaucratic lethargy in the system retarding efficiency. It must boost self-certification, promote higher user satisfaction, cut down red tape and boost exports. It is also the way forward for the PPP model and development of a vibrant defence ecosystem and a defence industrial base. But along with enhanced accountability the interest, future opportunities and concerns of the present workforce must be addressed. They must be equal stakeholders and must be motivated for the larger cause of OFB 2.0,” he added.

Outlining the achievements of the OFB, the former officer said, “Their many successes cannot be ignored. Their role in supporting the armed forces during Kargil and such critical times must not be forgotten. Indigenisation is the core strength of OFB now. Almost 89 per cent overall indigenisation in the system and 97 per cent in ammunition as of date. A shining example of OFB 2.0. It spends today 23 per cent of annual value on R&D which no one else does.

It has many success stories like Dhanush, Mine Protected Vehicles, BMCS ammunition, up-gunning 130mm to 155 mm Artillery guns, BMP 2 armament upgrade besides for other services like CNR 91 naval gun.

According to the Ministry of Defence, the proposed transformation of OFB from a government body to a public sector corporate entity will have several advantages which are expected to improve the efficiency and help in reducing import dependency for arms and ammunition.

Apart from self-reliance in defence, such a move is also expected to help in enhanced combat efficiency of the Armed Forces, ensuring customer satisfaction and deeper inroads in the defence export market.

Besides increasing production capacity, creation of jobs in the long run, the OFB will move towards competitive pricing and the underutilised factories will become active again.

The MoD has pointed that OFB has all along supplied products to Armed forces on nomination basis and there is total lack of innovation. This has not really incentivised them for improving the quality of products, and the poor quality of the products has been a matter of concern.

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