Business Opportunities10 yrs after Kargil, Bofors upgrade hangs fire
On the tenth anniversary of the Kargil conflict, the gun that did so much to facilitate that victory — the 155 mm Bofors FH-77B — could be staring at a major setback. With India’s artillery modernisation programme already stalled, the plan to refurbish and upgrade India’s old 155 mm FH-77B Bofors guns also seems headed for failure.
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The reason: the Indian Army, long accused of framing its equipment requirements unrealistically, apparently wants the upgraded Bofors gun to deliver better performance than new guns in the market today.
The company that made the guns — Sweden’s Bofors AB, now owned by British multinational BAE Systems — has examined the army’s technical demands and decided not to bid, since the demands are unrealistic. Industry sources close to the tender describe it as “a high-tech wish list” that fails to recognise the limitations in upgrading a 20-year-old gun.
According to this source, “Some of the requirements in the upgrade for these 20-year-old guns are more extreme than the requirements for new builds of the FH-77B.”
The tender for modernising the Bofors FH-77B, involves overhauling the gun, fitting a state-of-the-art sighting system, and upgrading the barrels from 39 calibre to 52 calibre. The barrel upgrade will allow the guns to fire heavier ammunition, inflicting heavier damage on targets.
Brigadier Khutab Hai, Chief Executive of Mahindra Defence Systems (MDS), which partners BAE Systems in India, confirms, “It is true that we didn’t respond. We have given the MoD (Ministry of Defence) our reasons. I would not like to comment on why we are not participating, other than to say that some of the specifications asked for by the army cannot be met technically.” BAE Systems India declined to comment.
Undeterred by Bofors’ withdrawal, the MoD-owned Ordnance Factories Board (OFB) and the Tata group have stepped forward and bid for the Bofors upgrade programme. Neither has ever developed an artillery gun earlier. The OFB, however, has the technical drawings of the Bofors FH-77B gun, which were handed over by Bofors when India signed the contract in the mid-1980s.
In an interview in September 2007, then OFB Chairman Sudipta Ghosh — currently in CBI custody in a corruption investigation — had told this correspondent, “The Bofors gun has not been productionised (sic) here, but [Gun Carriage Factory, Jabalpur] has all the drawings…. and based on those, we have indigenised [some parts of the Bofors gun].
Allegations of kickbacks in the 1986 Bofors deal had made it politically difficult to manufacture the guns in India. Eventually, the US $1.4 billion contract ended with the purchase of 410 “made-in-Sweden” guns. The part that was really advantageous for India — the indigenous manufacture of another 1170 guns under transfer of technology (ToT) — never took place.
Attempts to fill the resulting shortfall of artillery guns have been stymied over the last decade by erratic procurement practices and unrealistic technical demands. Since 2003, through several rounds of trials, the guns offered by three of the world’s leading artillery manufacturers — Bofors of Sweden, Denel of South Africa and Soltam Systems of Israel — have repeatedly failed to meet Indian Army expectations.
For BAE Systems, the decision not to bid was a difficult one. It had set up a JV with MDS — with BAE Systems holding a 26% stake, the maximum permissible — primarily to build artillery systems in India. Last year the JV had written to the MoD offering a sweetener: if it won artillery deals like the Bofors upgrade, it would give the Indian defence production establishment a share of the work.
The OFB would be given the work of manufacturing the gun barrels; public sector Bharat Electronics Limited (BEL) could make the sighting systems; while the gun trails and gun carriages (on which the guns rest, fire and move) would be built in the new BAE-MDS factory in Faridabad.
Despite all this, BAE Systems has not bid. Industry sources say BAE is confident that the OFB and the Tatas will prove technically unable to upgrade the Bofors guns. Their bids have been resting in the MoD since early 2009.