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Ordnance factories are now a ‘hurdle’ for armed forces. Corporatisation is the way out

OFB is a strategic asset that would flourish post ‘modification and modernisation’. Modi govt’s May 2020 announcement is a step in the right direction.

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Poor workmanship, deteriorating quality issues and lack of professionalism have plagued the workings of the Ordnance Factories (OFs) and associated organisations like the Director General Quality Assurance (DGQA). On February 2, 2019 at the Mahajan Field Firing Range, a burst cartridge QF 40mm HE, used in L/70 Air Defence (AD) gun, grievously injured a crew of five, including one officer. The L/70 ammunition was originally procured from Sweden and was being produced by the OF, after incorporating a series of safety mechanisms. Any person associated with this equipment will be aware that such an accident is well-nigh impossible, given the safety features of the system; and yet it occurred.

The inquiry revealed that the accident took place due to the bursting of the shell. The OF have been producing this ammunition for nearly half a century. The OF should have developed technologies which would have replaced manual handling and achieved a “zero defect” product. Yet, in the accident quoted above, it appears there was quality compromise both by the OF and the DGQA team.

Though five Army personnel were incapacitated, did anything change at the OF or the DGQA? Both the agencies instead accused the user of having mishandled the ammunition, notwithstanding the fact that the inbuilt safeties are supposed to cater to war conditions and nothing would happen to ammunition even if dropped by mistake. On the flip side, in one go, the faith of the entire regiment in the “friendly” ammunition was lost. That particular lot was segregated as per procedure. The gun crews became extra cautious while firing, which is very disadvantageous to AD personnel, who barely get two to three seconds to engage the enemy aircraft.

Also read: Army says ‘poor quality’ Ordnance Board ammo, mines have cost India Rs 960 crore since 2014

Such incidents involving Ordnance Factories’ products are, unfortunately, a repetitive phenomenon. In this context therefore, corporatisation of the Ordnance Factories as announced by the Government of India in May 2020 is a much desired and long pending step in the right direction.

The call for a strike on October 12, 2020 by the trade unions associated with the Ordnance Factories, seemingly with the tacit approval of the Indian Ordnance Factories Service (IOFS) group “A” officers, at a time when the Indian Armed Forces are in a state of high alert on the Line of Actual Control (LAC), speaks volumes about the priorities of the Ordnance Factory Board (OFB) leadership. The performance of the OFB needs to be evaluated against the backdrop of the objectives set for them, which include the following:

  • To supply quality arms, ammunition, tanks, military equipment, weapon systems, etc., to the armed forces;
  • To modernise production facilities to improve quality;
  • To equip themselves with technologies through transfer of technology (ToT) and in-house research and development (R&D); and
  • To meet customer satisfaction and expand the consumer base.

The OFB has failed on all four counts by miles. Neither is there any quality control nor have steps been taken to modernise the product profile. Numerous examples include the quality and costing of clothing items for soldiers, the 5.56 mm INSAS, vehicles, and tentage, among others. The absorption of technology through ToT just does not happen, with the ammunition for the Bofors gun being a case in point. Customer satisfaction is the last thing on the OF checklist. If the capacity utilisation is less than 50 per cent, the Ordnance Factories cannot ever think of expanding the consumer base.

One only has to go through the Comptroller and Auditor General (CAG) Report No. 15 of 2017 to understand whether the Ordnance Factories have “aided” or become a “hurdle” for the armed forces. The loss to the exchequer (despite having a limited defence capital budget) is huge, capacity utilisation remains below par, and the modernisation budget is less than one per cent of the OF revenue. Inefficient inventory management leads to cost escalation, while the OF outsource more than 50 per cent of their requirements. Time delays are exorbitantly high, overheads as a percentage of cost exceeds 25 per cent, and the cost of final products are more than what is available in the open market while the exports achieved over the years are insignificant.

Also read: Ordnance factories hit back at Army claims, cite export orders, accidents of other equipment

The OF spend on R&D is next to nothing. The OFB filed for just one intellectual property right (IPR) patent in 2016-2017 and none in 2017-2018. After the launch of “Mission Raksha Gyan Shakti” in 2018 by the Defence Minister, 154 and 106 IPRs were filed in 2018-2019 and 2019-2020, respectively. Capability and capacity do exist but it seems the ‘will to do’ does not.

If the IOFS officers who are at the helm of affairs of the OF had even minuscule responsibility and accountability then things would not have come to such a pass. But the officers from the cadre are also the monitors in the Department of Defence Production (DDP) under the Ministry of Defence (MoD). Since there is no one to “monitor the monitors”, it becomes a case of “all is well”.

Some suggestions that the government could follow post-corporatisation include permitting the lateral entry of professionals with proficiency to head the Ordnance Factories; ensure in-house R&D; form joint ventures (JV) with private industry; weed out inefficient workers; close down Ordnance Factories which focus on manufacture of low technology items or those that are easily available in open market; and disinvest and monetise to raise capital for modernisation, etc.

The Ordnance Factories are a strategic asset that would definitely flourish post “modification and modernisation”. They should fulfil the desire for indigenisation but, at the same time, help achieve US$5 billion export target by 2025.

Brigadier Akhelesh Bhargava (Retd.) was Chief Instructor PROMEX. Views are personal.

This article was first published by Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA), New Delhi.

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  1. OFBs need to be overhauled completely and be made “accountable and responsible” for their products. The Trade Unions must be curbed since these are defence related installations.
    After having served in the Armed Forces for more than 3 decades, I hold the right to express my discontent and dissatisfaction at the performance of these cash-guzzling mammoths.
    Either OFBs be completely discontinued or be forced to compete with private players. Otherwise they are likely to be more dangerous than the enemies on the battlefield.
    It’s ridiculous that despite 41 Ordnance Factories, we are unable to produce reliable weapon systems, ammunition and other equipment.
    About 95% soldiers wear equipment purchased out of their pockets from local market (Made in India). It’s sad to see that OFBs cannot manufacturers decent uniforms and shoes, let alone reliable weapons and ammunition.

  2. Dear patriotic indian citizens,
    just imagine the situation that a war is going on with enemy countries and our soldiers are dependent on private sector supply for ammunitions and armaments….Is it really trustworthy that the private firms would supply it uninterruptedly with all requisite quality standards, at the normal cost???
    The answer would be a big big “NO”. !!!

    Don’t believe it ??….Just remind the prices of N95 masks that you might had bought in recent months of covid-19 pandemic ….Many people purchased it with cost 2000Rs per piece….which hardly costs 50 Rs per piece to manufacture…..This very simple example will clarify the policy of private corporates who work only for money.
    & The dedicated War Reserve organisation of truly indian people for the india, established through parliament act, having service experience of about 220 years.. had never been at back front under such war emergencies…. & Hence The Most Trusted & War Tested Force behind our Armed Force is OFB.
    And it’s dedication and trustworthiness towards national interest can never be questioned.
    OFB can set the highest standards of quality & quantity production of arms and ammunition if the political will & honest,corruption free mindset of the country’s leadership is desirable for it.

    Respected Mr author, Just put off your negative mindset about OFB in national interest. Otherwise future generations would never excuse such negative journalism in national interest.

    • After serving in the armed forces for more than 3 decades and having seen the performance of OFBs, I agree 200% with the above report. With 41 OFBs, about 95% soldiers still wear normal and combat kits procured from local market (of course, Made in India by private companies).
      In case of war-like situation, one shudders to think if we still depend upon OFBs who continue to fail during the peacetime. Your Trade Unions look more dangerous than the actual enemies we face in the war zones.

    • Forget about politics, talk about the OFB organisation and workforce itself. Incompetent, lethargic and visionless people are more dangerous than the enemies.
      Faulty weapons and ammunition cause more harm than the enemies.
      OFBs cannot manufacture decent uniforms, let alone arms and ammunition.

  3. Non has commentted on the lack of political will to improve the OFs. For fifty years OFs have been milk cows for a class of people. Now if army is complaining of their products, let government employ ex service men and officers who in collaboration with IITs, DRDOs and Industry improve the product range. (But must keep the IAS and local politicians away). Now, ex army guys know what to deliver and where to scout for technology. This rehabilitats the once committed soldier during war to prove his commitment to his comrade in his peace time vocation. Whats the problem. Who’s complaining?!.

  4. I fully agree. I worked for over three years there and I can tell you the workers don’t work over 3 to 4 hours and yet get overtime. They drink and play cards and at drop of hat strike. Useless good for nothing guyd

  5. What amount of moned does the corporate provide you for development of your post retirement luxury Mr Author

  6. India won four wars with the arms supplied from these ordinance factories why suddenly people are having doubts now. Maybe Chinese products are better than those produced by ordinance factories as far as overtime is concerned if there is shortage of workers or cader are not filled up then govt has to give OT. Private sector never follow labor laws they are scumbugs while govt has to follow all rules which are set by them. OTHER SIDE OF FENCE IS ALWAYS GREEN.

    • It’s “Ordnance” and not “Ordinance”. How are we going to produce world class arms and equipment with such education and knowledge?

  7. I grew up in Kanpur, near OFC. My dad was in private sector while rest of the neighborhood was employed in OFC. My dad always used to come back home until after 8/9 PM and I never saw someone from neighborhood returning from work after 5 PM – the work day used to begin at 9 AM for both my dad and the OFC employees. Dad paid exorbitant income tax so that these OFC leeches can get their salaries and pensions while whiling away at work.
    Such is the reality of OFC and other PSUs.

    • Yes, you have made the case for transfer of all assets to failed businessmen like Anil Ambani.

      Public sector is bad, but when private sector is run through crony capitalism, monopoly capitalism and a Hindu oligarchy, India is not going to go far.

  8. If ofb employees go on strike in this period this will mean that they are the real traitors. Gov. Of India must replace this entire family by patriots. This can we’ll be achieved by gradual induction of new ideas in the form of joint ventures, privatisation and by means of creating competition between ofbs and private or jv-ofbs.
    India needs an immediate and amicable resolution to this big crisis. Let ofb employees enjoy the best of salaries and perks but at the same time should be made responsible for the overall performance and in that respect every emoyee’s job security should be made directly proportional to his over all performance.

  9. Why don’t you take your own responsibility? Army officers are deputed or seconded to organizations viz DGQA, DRDO etc. For what purpose they are deputed. If there are issues then why not take proper action in lieu of army??

  10. There are numerous factual inaccuracies in this article. Ordnance Factory Board need to take serious introspection. But I , sincerely , request everyone to take into account warlike equipments are involved here. We must address issues related to Quality & Reliabilities OFs produced Equipments at the earliest. I am sure , we Indians can .

  11. Im an ex soldier, im strongly supporting to remove ordinance factorie from manufacturing military equipments. Worst quality equipments. Weapons are very poor standard compared with western countries

  12. Corporatisation of the OFB should be taken up on fast track . How many more lives will be lost before the government does something.? Also, speed breakers that OF are – in today’s world our army deserves much better .than what these redundant , rusted , OF produce .

  13. The OFC is a disgrace to the country and burden on the ex-chequer. All defence personnel who got injured and lost their limbs must file a suit against the ministry of defense, staff union leaders, politicians who support this inefficient organization in supreme court and see that professionalism enters in this not so admirable OFCs. The staffs who are working in the OFCs doesn’t bother about our nation and its personal who man the country but getting fatty sums from the GoI. The time has come for this government to act decisively.

  14. Another trend now emerging is even DRDO reluctant to work with OFB and is more comfortable transferring technology and collaborating with private industries . Some of the OFB units are total sham

    • This Institution had killed itself years back.
      Total sarkari babu attitude of working 9 to 5 officially with a confirmed salary at the end of the month and yearly bonus, a govt accommodation to live and a secure pension. No sense of responsibility or dedication.
      Products that have been produced are all poor in quality.
      My question is why should they be paid from my pocket?
      Let them work hard to earn their livelihood.

  15. They have become utterly corrupt and lazy because of lack or transperancy and accountability. A few obnoxious and equally corrupt suppliers run the roost supplying below pat quality and getting away with it.
    Time for a big overhaul to bring in efficiency, efficacy and accountability.

  16. No R and D , no advanced equipments……give ofb gold and ask for an jewellery, don’t give them silver and ask for golden ornament…..
    Govt. And army always blame ofb , whom should be responsible for the improvement and change in programme, GOVT.OF INDIA or OFB……
    Family should be maintained by the head of the family……papa is responsible……Think it’s the inefficiency ……..of ???????

  17. Private bodies like print etc will recommend only corporatisation of govt bodies . These private agencies want privatisation all across country because they tbemselves are private bodies. Even private companies in India procure equipments from China etc and sell the products with tag of Indian made.

    Good to ban chinese apps……………..but what about Chinese phones and other electronic equipments which are being procured in million figures?

    Moreover, the concern is that even corporate bodies in country like India donot have workman to innovate warfare equipments…………….only game being played by current govt. is to privatise govt agencies and these private bodies are owned by merchant class thereby indirectly effecting poor netizens of country. Corporate bodies fund political parties during election campaigns and take return benefit from govt in power. These corporate bodies compel govt to privatise all govt bodies in order to reap illegal benefits in form of increased price of services that is currently being offered at lower price by govt bodies.

    For example , BSNL never charged higher SMS costs during festivals but private cellular companies charged higher SMS costs during festivals.

    Truth is that India’s technology is hundred years behind technology of developed nations because in India courts deliver justice to a rape victim after verifying affluency status.

  18. The whole diagnostics suggest a case for improving OFB, but the recommendations say’ Get Ambani’. Sad. Too biased. Pure Modi voice.

    • Finally, the purpose is to fatten Ambani, not improve India’s defence. In turn, Ambani will finance the BJP.

  19. Non officer staff of Ordnance Factories draw overtime in excess of regular working hours, even if there is no production. Overtime is comparable to their salaries. Also DGQA nad Ordnance Factories are under same vertical in MoD hence inspection by DGQA is always suspect

  20. I also have heard from several people who have bought the civilian rifles n revolvers made by the very same ordinance factories about their pathetic quality and performance. It’s shameful that these institutions take no pride in making these simple weapons. Can you expect from them to produce weapons to help our brave jawans protect our motherland.

    • Don’t forget the wars in past like.. of kargil, where ordnance factories ammunition were used by our army and we dominated and discarded the enemy back to where it look at the people like you..betraying themselves and blaming ordnance factories..just because they want’s a failure of government. The rules and obligations they have imposed over ofb..are itself outdated..and they think corporatisation is the only solution. It’s pity over this government..that they can even manage the ordnance factories. And shame on people like you.!!

      • Even during Kargil war, many soldiers lost their lives because of crap INSAS. There is a reason why the Indian Army hates INSAS rifle. Also read about Operation Parakram which took place after Parliament attack where many soldiers lost their lives because of faulty equipment manufactured by OFB. The number of people who lost their lives were more than the casualties in the Kargil War. There is a history of incompetence and faulty equipment associated with the OFB. And the army is forced to buy the arms of OFB even if they dont like it. When the soldiers go out for war, they should be able to trust their equipment. If they themselves are apprehensive about their own equipment, how do u think they will fight properly? U should read more and not be biased about the govt when u talk about matters which relate to national security.

  21. An insightful article by Brig. Akhelesh Bhargava!
    Kudos to Modi’s Govt. for it’s bold decision to corporatise Ordnance factories. This would bring in more accountability, new technologies, and professionalism.

  22. I recall about 22 yrs back army had full freedom to procure mosquito nets from trade. Trade ditched them and jawans were facing a different enemy mosquitoes major general from ordnance came to me at oef kanpur to save them. We geared production line and supplied full quality as promised by physically delivering it to cod kanpur and informing major general who came to me. It is a matter of record and can also be testified by the then officers well this was a clothing item those who feel arms ammunition ordnance can be procured at critical times please think again .exercise caution. Improvement of Ord fy possible credentials of brig bargava needs check

    • There is zero credibility to what u r saying . If anything army purchases from OFB its because of the policy . Given free hand they will dis associate with OFB . Shoddy jobs and unionized culture of OFB is well documented . This socialism era white elephants should be closed ASAP

  23. This looks like a third party one sided mostly gives prejudicial report!! Well I am not completely against corporatisation but we need to understand other side of the story as well…Do research part of OD or its comes under the domain of DRDO? I am sure moving forward towards optimization and technological advancements is the best way forward

  24. This OF should be shut down. The employees are a bunch of useless jokers..a waste of space and money.. They have not produced any worth while weapon in the last 7 decades. Dump them

    • If print is arm Dalal, then what have OFB contributed to self sufficiency that we are importing basic ammunitions for decades !!! Think

  25. This is the best suggestion so far. I recommend that OFB employees go on strike so that they can be fired…… …….. cheers.

    • Yes man, I can’t agree more with your suggestion. Over time , everything needs to be changed . The lathargic OFB employees have now become stubborn too. There are 2 options available for them , end the indefinite strike and get back to work or get fired without any warning , the choice is theirs . They don’t want to work hard , that’s the reason they are opposing corporatization !!!

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