New Delhi: The move to involve private sector in the operation of the Army’s workshops is facing resistance from its officials.
Under the proposed Government-Owned Contractor-Operated (GOCO) model, private contractors were to operate the Army’s base workshops that repair and overhaul equipment from guns and vehicles to tanks and helicopters.
However, those against the move claim that it could increase the cost and that private companies in India didn’t have the skills to carry out this work. The model will also deplete the Army’s capabilities built over years to overhaul equipment, they said.
The matter has been raised with the Army top brass against the implementation of the GOCO model, officials said, adding that it needs to be reviewed.
Those supporting the model, however, say privatisation was important. The Army then doesn’t have to run workshops in remote areas and this is a way of reducing administrative flab, they said.
PricewaterhouseCoopers, which in January was selected as a consultant to attract private players for the project, has submitted a report to the Army, officials said.
The Army and the defence ministry didn’t respond to queries while PwC said it didn’t want to comment.
The eight base workshops established during World War II in different states are meant to keep the Army operationally ready at all times. The proposed GOCO model would allow the contractors to use Army’s infrastructure and manpower to carry out repair and overhaul work. Under it, the contractor would be responsible for the daily operations of the workshops, sourcing of spares and meeting targets, while the ownership of the workshops would remain with the Army.
Private firms are pushing for bringing in their own manpower, citing requirements of a younger and technically more qualified workforce, said an official. “Nobody in the country can do what the Army personnel at the workshops can do. They can strip a tank to the bare minimum for overhauling it, right to the nuts and bolts. We have the experience, which the private sector does not,” the official said and they fear private operators would poach serving officers to manage the facilities.
PwC has given several examples of countries like the US operating similar models with high-tech infrastructure and suggested that these could be replicated here as well, officials said. PwC also gave examples of assembly lines run by Indian private companies and suggested that the workshops could be revamped on similar lines.
However, Army officials told the consultancy firm that it wouldn’t be possible to have a similar set up like the US because of the limited budget and that there was no requirement of establishing additional infrastructure, as the existing machinery was enough to meet the requirements.
The GOCO model is based on the recommendations of a committee headed by Lt Gen (Retd) DB Shekatkar to enhance combat capability of the Army and reduce defence expenditure. When it was mooted, it was decided that private firms will not have to invest in land, infrastructure, machinery and manpower.
A question being raised from within the Army is whether private firms were capable of providing critical spares for equipment such as tanks. A reason why the GOCO model is being implemented is because questions had been raised about the Army’s capability to timely repair and overhaul its equipment. Officials said while the Army was capable of meeting targets, the delay was caused by the Heavy Vehicle Factory of the Ordnance Factory Board in Avadi, Tamil Nadu, not providing adequate spares on time.
Officials said private companies were interested only in the workshops that handled major equipment such as tanks, because the revenue generation opportunity was more. “An overhaul cost of a tank is Rs 8-9 crore,” an official said.
