Why Splurge Public Money Amounting Rs.6.2 Crores To Corporatize OFB Through Consultants When Unions Have Given Suggestions Free Of Cost

On the one side, the three recognized Federations of Defence Civilian Employees of Ordnance Factories (AIDEF, INDWF and BPMS) have submitted a valuable Report within record time of 20 days for internal restructuring of OFB in an effective manner in the Government setup itself. This was submitted to the Government by the Federations free of cost. On the other side the Government is spending more than Rs 6.2 Crores of tax payers money as Service Charges on two private consultants. M/s. KPMG Ltd. and M/s. Khaitan & Co. for implementation of Corporatization of OFB.

www.indianpsu.com interacted with many employees of Ordnance Factories, Trade Union Leaders and Officers from both Army and Ordnance Factories. Majority of them have gone through the document submitted by the Federations on 20.11.2020 and they are of the view that the suggestions given by the Federations are better than any outside experts. The Government should come forward with an open mind to implement the recommendations given by the Federations. The workforce are of the view that they have become the victim of all the shortcomings and mistakes of the policy makers both in the Defence Ministry and in the Armed Forces.

According to them there is a lack of proper planning by the MoD, DDP and also Armed Forces with regard to the futuristic requirement of Armed Forces. Some time when the Army plans its requirements, then budget becomes a very big constrain. They were also critical about the lethargy and misuse of power and public money by the people who are in the helm of affairs. The Federations in their joint proposal have exposed all these shortcomings blatantly and have suggested remedial measures. Some of the veteran Officers from Army and Ordnance Factories with whom www.indianpsu.com has interacted, they were of the opinion that the Government instead of depending on the highly paid consultants, they should depend upon their own employees and Trade Unions vast experience in the field of Defence Production. The Government should constitute a Committee with the representatives of Army, DDP, DMA, OFB and the
Federations to formulate an action plan for implementation of the suggestions given by the Federations.

Now let us see what the Consultants are expected to recommend according to the Rs.6,20,68,000/- contract signed by the Government of India with the Private Consultants. The consultants have to recommend the following for achieving the goal / target set by the Government to corporatize the Ordnance Factories.

i) To enhance functional autonomy, efficiency and unleash new growth potential and innovation of Ordnance Factories

ii) Improve flexibility and dynamism in decision making in the functioning of Ordnance Factories

iii) Move away from an administrative pricing mechanism to a process of competitive pricing, bringing cost reduction for Armed Forces and Para Military Forces

iv) Improvement in the quality of the products by enabling new entity (ies) to follow market-based quality practices

v) Better utilization of capacities and assets of the OFB Factories

vi) Optimum utilization of Human Resources and their capacity building to meet future challenges

vii) Timely support to the Armed Forces

viii) Greater incentive for export with ability to retain export profits

ix) To enable business continuity of the new entity (ies) on a self-sustained basis

x) The entity (ies) so created will have agility in absorbing ToT, besides forming Joint Ventures (JVs) with other countries including acquisition of Foreign Companies

xi) To create surge capacity to meet war requirements 

xii) The increased turnover / profitability to lead to enhanced employment and better terms of employees

If our readers go through the joint Report submitted by the Federations all the above mentioned goals are available in their Report for improving the performance of the Ordnance Factories in the present Government setup itself.

www.indianpsu.com asked C.Srikumar, General Secretary of All India Defece Employees Federation (AIDEF) that whether he has through the contract signed by the Government with the consultants and if so his opinion on the same. C.Srikumar stated that the Government has not given them a copy of the contract which the Government have signed with the Consultants. However, through reliable sources he has come to know about the various contents in the agreement. He proceeded to state that it is a sorry state of affairs that the Government is spending a huge amount of more than Rs. 6 crores on the consultants especially when the Country is in deep economic crisis after COVID-19 Lockdown. According to the Contract with the Consultants apart from the Service Charge they have been provided with many facilities and infrastructure and even access to sensitive information and document, whereas in the case of Federation nothing has been provided and the Secretary (DP) desired that the Federations should submit their alternative proposal within 20 days. The Federations with all their limitations and constrains have taken lot of pain to submit an easily implementable proposals to the Government.

He added that the Federations have been receiving encouraging comments / views from various corners including serving and retired Army Officers, Industrial experts and veterans who retired from Ordnance Factories as Chairman, Members and General Managers’. He express his confidence that the Secretary (DP) will be definitely convinced with their recommendations and that the Empower Group of Ministers Committee will approve the same for implementation.