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04-01-2012, 11:30 AM #1
Anand Mahindra says govt must revamp existing defence procurement system
The government must revamp the existing defence procurement system and make it more transparent, Anand Mahindra, vice-chairman and managing director (MD) of Mahindra Group has said. Asked to comment on the country's defence preparedness, Mahindra said at the ongoing Defexpo India 2012 on Friday, "Am I worried about whether we are adequately prepared? Yes, of course. Our systems and hardware need to be upgraded dramatically.
We have fallen behind on many schedules in the armed forces. As an Indian, I am certainly worried," Mahindra said adding that this is the time to answer controversies by bringing in transparency and technology."
"There is so much controversy surrounding us. Of course, as an Indian I am worried of whatever I read, of whatever I listen to," he remarked. "The government needs to change the way of procurement, which should be transparent like the very transparent processes that exist in the best private sector companies for any kind of procurement process."
Mahindra said this is the real time for the government to make good its promise on involving the private sector to a much greater degree in defence procurement . "What people want to know is why (are) we buying something, what is its cost, what exactly was its competition, what are its technological features, why was it chosen? I believe there is no harm in enunciating and being transparent about that, which is what we will do in our ventures for defence production," he said.
The group on Friday announced two separate joint ventures-one with Israel's Rafael Advanced Defence Systems and another with US-based Telephonics Corporation with an investment of Rs 100 crore each. "These partnerships are significant for our defence business. Our joint venture signals our strategic entry into a wide range of high-tech defence solutions which will enable Mahindra Group to become a leading defence systems integrator in India," he said.
The group is eyeing a revenue of up to $18 billion (Rs 90,000 crore) in the next 8-10 years through supply of various defence equipment in India. "We are beginning with an investment of Rs 100 crore. As we go long, we are looking at a business of roughly half-a-billion dollars over 10 years which works out to about $50 million a year," he said.
The company said it will set up a separate manufacturing facility in Pune for this purpose. It will invest another Rs 100 crore in JV with Telephonics Corporation, work for radar systems and communications systems.