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Why Indian Army must not resist Modi govt’s contractor model for base workshops

Indian Army follows the traditional ‘womb to tomb’ life cycle support management for its costly equipment. But it’s time for GOCO model.

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The Ministry of Defence has been grappling with the introduction of Government Owned Contractor Operated, or GOCO, model for the functioning of Army Base Workshops for the last three years. The logic of GOCO is to bring about efficiency and save manpower. But this reform is facing stiff resistance from the Army, which argues that it would be more cost-effective to reform the existing system, and blames the current inefficiency of Army Base Workshops on the lack of funds for infrastructure and modernisation and delayed supply of spares by ordnance depots/factories.

But the GOCO model is an idea whose time has come.

The issue came to the fore due to the recommendations of the Shekatkar Committee made in December 2016. The Comptroller and Auditor General (CAG) had also in a report that year sounded alarm bells about the inefficient functioning of the Army Base Workshops. After deliberations, in January this year, PricewaterhouseCoopers was appointed as a consultant to attract private players for the project.

Also read: Not media, CDS Rawat should be talking to military chiefs about India’s defence reform

What is the current system?

The Army follows the traditional ‘womb to tomb’ life cycle support management for maintenance, repair and overhaul (MRO) of its costly equipment, which remains in service for up to three decades. Broadly, the traditional system encompasses maintenance, servicing and low-end repairs by unit- and division-level workshops; quarter life and two-thirds life medium-level repairs by intermediate workshops at corps level; and mid-life overhaul as also overhaul of major assemblies at ABWs. The Corps of Electronics and Mechanical Engineers (EME) is responsible for the MRO system. In case of equipment manufactured under licence, ordnance factories like the Heavy Vehicles Factory also undertake overhaul of equipment.

In the last three decades, there has been a quantum jump in military technology and the MRO of military equipment has become very complex. At the field level, the MRO has sustained the challenge because it only requires minor repairs at unit-level workshops and replacement of components and assemblies at field formation workshops. However, quarter life and two-thirds life medium repairs and mid-life overhaul have run into problems on account of lack of infrastructure, spares and expertise. This is the responsibility of intermediate workshops and ABWs.

Also read: How the IAF plans to get the edge back from Pakistan on air-to-air strike capability

Inefficiency of ABWs

Indian Army has eight base workshops, which were established during World War 2. These are run by the Corps of EME and staffed by a mix of civilian defence and Army personnel in 3:1 ratio. The average manpower of a base repair workshop is 1,500-2,000. Each workshop deals with a specific equipment. The infrastructure, expertise and work culture has not kept pace with time, leading to below par and inefficient performance. These workshops have been under the scrutiny of the CAG, with three performance audits carried out in 1992, 2005 and 2015.

The 2015 audit was taken up to assess the effectiveness of the workshops with regards to timeliness of overhaul, adequacy of infrastructure for overhaul, timely availability of spares, and quality of repairs. The audit also looked into the status of assurances given in the ‘action taken notes’ on earlier reviews.

Major observations of the 2015 performance audit:

  • There was a big backlog of overhaul of most equipment due to inefficiency in not achieving annual targets, reducing the reliability and life of the equipment and adversely affecting the operational readiness. The backlog was 90 per cent of total holding incase of Armoured Recovery Vehicle WZT-2, 34 per cent for Radar TC Reporter, 33 per cent for BMP-2, 21 per cent for Battle Field Surveillance Radar, 20 per cent for Tank T-72, and 18 per cent for Radar Fly Catcher.
  • Non-formulation of overhaul policy for Class ‘B’ vehicles – Scania, Tatra and Kraz. Presently, base workshops are accepting these vehicles of eight years vintage and above for overhaul as per the direction of EME Directorate.
  • Lack of facilities for repair/overhaul of MBT Arjun.
  • Quality Index for overhaul of BMPs was 70-77 per cent against specified 95 per cent.
  • There were no facilities for test firing of tanks and BMPs, which is mandatory after overhaul. Also, no facilities exist to check the fording capability of tanks and amphibious capability.
  • While the guidelines issued by the defence ministry stipulated that the cost of overhaul of vehicle and engine would in no case exceed 30 per cent of the cost of a new vehicle/engine, no cost accounting mechanism was in place in the ABWs to ensure cost-effectiveness of the repairs and overhauls.
  • Non-availability of critical spares, leading to deviation sanctions and thus compromising the reliability of the equipment.

In a nutshell, the existing system had large manpower, poor work culture, inadequate infrastructure, poor spare back up, and inefficient performance, all of which resulted in below par reliability of equipment and adversely affected operational readiness. The Shekatkar Committee had also noted all this in its report. It recommended that the ABW should be restructured on the Government Owned Privately Operated (GOCO) model, which has been adopted by many foreign armies with mixed results.

Also read: How ISRO can help satellite launch startups tap a billion-dollar (and growing) market

Pros and cons of GOCO

The GOCO model will bring in corporate culture, leading to efficiency and accountability. Private operators can easily go into partnership with Original Equipment Manufacturer (OEM), both for expertise and spares. The government can save on manpower — 12,500 personnel workforce of the ABWs. Under this model, the ABWs can also undertake quarter life and two-thirds life medium-level repairs and save on manpower committed at intermediate workshops. This model also opens avenues for absorbing trained retired personnel, which can be built into the contract.

But the corporate world is driven by market forces, which means the GOCO model will be more costly. In most cases, private operators will want better infrastructure, which would have to be upgraded or replaced at government cost. Private operators may not have the expertise to deal with military equipment; they are also unlikely to absorb the existing manpower and will want a younger and better-trained workforce. Thus, it may be more cost-effective to reform the existing ABWs by improving the infrastructure and ensuring timely availability of spares and better work culture.

In my view, the GOCO model’s time has come because the Army has failed to reform the ABWs to make them more efficient and cost-effective. I would even recommend applying the GOCO model to our overstaffed, corrupt and inefficient ordnance factories. Yes, it is going to cost more, but when does better quality and efficiency come without additional cost?

Lt Gen H S Panag PVSM, AVSM (R) served in the Indian Army for 40 years. He was GOC in C Northern Command and Central Command. Post retirement, he was Member of Armed Forces Tribunal. Views are personal.

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  1. L&T and TATA have successfullythe manufactured a number of weapon systems duly employing a number of retired service officers

    ABWs have tremendous potential but are under utilised

    They have stood the test of the times and have been a life line for field army

    Army is unable to exploit their potential due to inherent spare problem and lack of support from top leadership for modernization

    GOCO is worth implementation as a pilot project.

  2. ABWs with lack of critical spares, lack of funds for modernization, not consulting EME from beginning of the weapon / platform Procurement process, and then not understanding these root causes by MGO upwards are the core issues. EME has always delivered in war and peace, and will continue to excel – trust them, support them, and you will not repent ever. GOCO hasn’t succeeded in other nations with better legal systems, conscription and Military industrial bases – not sure what gives you the confidence that it will be successful in India. Relook inwards and see what the GS has /has not done to help improve captive MRO capabilities. IAF and IN have a culture of ownership of these establishments, unfortunately IA seldom discusses and understands MRO.

  3. Now technology is use and throw hence maintenance period is very less hence GOCO will work….

  4. Goco is not gonna work and will be costlier too. The private players don’t have experience in dealing with military equipment for repairs and overhaul. Work culture in the need of war like EME can never be adapted by private giants and we all know how responsible will they be for equipment failure?
    To remove corruption in procurement of spare parts basically the quality and trained menpower where the specialized person in grouping policy can give better results.

  5. Article written by a retd general who I am sure has not in his life visited a base workshop, the only problem which the base wksp face are majorly of spares, corportise the spares part everything else to incl infra, skills and leadership is on par.

  6. Most of these articles are written for public consumption, by Rtd Infantry Generals, who are not Engineers, or don’t listen to Technical advises of senior EME officers.
    With the advent of technologies, and future warfares will be computer based,digitised, it is high time, Engineers are inducted and trained to handle,maintain,repair,refurbish, recondition,cannibalisation techniques.
    It is also not ot out of place to ask,,why the method now being suggested by the Rtd LtGeneral, was not implemented while he was in service?

  7. Sir, as per ABW manpower consult they systematic suffering with the over burden of staff, line and axillary type employees.
    It mean less Technician or more supporting force applied for the same.

  8. We do not have to take the costlier option of GOCO to bring in efficiencies in Army Base workshops, and that too, after eroding inherent capabilities of Armed Forces, it can easily be done at a much lesser cost by infusing some funds for upgrading infrastructure and revamping/ outsourcing spares provisioning. This way , Indian Army retains its core strengths of engineering support too ..

  9. GOCO is another avenue for large number of offrs to get re employment on retirement. Two offrs who are driving for implementation of GOCO will retire in next one year and have already booked a slot with industry for their job

  10. Unfortunately in Indian Army the maintenance agency is not consulted on any decision. The decision are taken by offrs who have no idea about MRO. Once GOCO fails you can’t recreate Base wksp overnight. What about the skill levels of combatants. From where we will get it overnight. The IAF and IN have their own in house MRO facilities including refit. Why no GOCO for them? It is because in IAF and IN thr maint are headed by engineers and not by Gen cadre offrs.

  11. Why not implement the same for the OFs first which have been lacking in timely provisioning of critical spares on a quarterly basis and thus forcing the workshops to either hunt for new suppliers which have MOQ issues else inflated spares supply in terms of time and cost.
    Skillset is the prime weapon in the hands of these workshops which are in addn an excellent platform for the field army to help them in undertaking critical repair being an internal part of the repair eco system.
    It’s first imp to fight the root cause of such delay in OHS rather than improvising a new system without knowing pros n cons n later adding a liability for the forces.
    Ground realities are always different from bookish knowledge.

  12. There is rampant corruption in this workshops, that’s the reason why this guy’s are resisting privatization..

  13. In the Indian conditions of high entropy, privatisation of system readiness is not advisable. As and when weapons get manufactured in the private sector, DLevel may be taken up by them. It is important to sort out the root cause of the problem which is plant readiness and supply of spares as overhaul kits. If these two core issues are taken up by the private sector in a collaborative spirit, the ABWs can get back to force regeneration as usual. GOCO has been a NO GO in most countries, its success in indigenous conditions of profiteering, corruption, trust deficit and military careerism is impossible. Once Army’s skills and competencies fade away, the reman cost by private sector will put the budget in a tailspin. Today the ABWs are an important lever of Engineering support even for front line troops besides providing an avenue for skill development of EME’s combatant workforce. Unreliable, malfunctioning weapons of any arm will only add to the vulnerabilities of the Infantryman. A pragmatic, graduated approach is called for.

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