Ajai Shukla
This amount will be spent during the 12th Plan on upgrading, modernising and supplementing the OFB's production facilities
The defence ministry (MoD) will spend an unprecedented Rs 15,000 crore on the Ordnance Factory Board (OFB), its fully owned conglomerate of 41 factories that manufactures arms, ammunition, vehicles and equipment mainly for the military.
This amount will be spent during the 12th Plan (2012-13 to 2016-17) on upgrading, modernising and supplementing the OFB's production facilities.
During the last decade, the OFB has spent an average of about Rs 400 crore per year on modernisation. Now, during the 12th Plan, OFB modernisation will consume more than Rs 3,000 crore annually.
For private sector companies that are foraying into defence manufacture, this is worrying news. Bharat Forge, for example, has invested about Rs 100 crore on importing an entire factory to build artillery guns; it has set up a production unit in Pune. Now the private sector fears that that heavy expenditure on upgrading the OFB will result in military orders being placed on the OFB rather than on the private sector.
Dismissing such apprehension, a top MoD official tells Business Standard that the OFB's modernisation plan will not create additional production capacity. Instead, the new infrastructure is intended to improve production quality and to reduce the OFB's manpower levels by increasing automation.
Read the full story at Business Standard