New Delhi: Nearly 14 years ago, the Ministry of Defence cleared the proposal for a towed artillery gun system under the ‘Buy and Make’ category that was meant to be the backbone of India’s fire assault. A final decision on this is still awaited.
All eyes are now on the second defence negative import list, which is expected to be out soon, to see if the 155mm x 52 caliber towed artillery gun is on it.
Sources in the defence establishment told that the list has been submitted but a physical meeting has not taken place due to the second wave of the Covid-19 pandemic.
The meeting to review and clear the decision is now expected next week.
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While the artillery gun was there in the first negative list released on 9 August 2020, and the embargo was to kick in from December 2020, the date was was subsequently changed to December 2021.
With the deal yet to be signed, eyes are on whether the cut-off date will remain or extended again.
The reason for extending the date was that while the indigenous Advanced Towed Artillery Gun System (ATAGS) is being built, a separate process is also on to get similar guns from the global market and making them in the country under the ‘Make in India’ initiative.
This race was primarily between Israel’s Elbit Systems and France’s Nexter, and Elbit’s Autonomous Towed Howitzer Ordnance System (ATHOS) emerged the winner.
The process for acquiring towed guns began in 2001 as part of the Army’s Field Artillery Rationalisation Plan, which had been drawn up in 1999. Multiple requests for proposal (RFPs) were issued. In the last RFP, which was issued under the UPA government, only the two companies mentioned above participated, sources said.
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Nearly 14 years ago, the Ministry of Defence cleared the proposal for a towed artillery gun system under the ‘Buy and Make’ category that was meant to be the backbone of India’s fire assault.
Elbit emerged cheaper than Nexter
In March 2019, following what was meant to be an exhaustive ‘Field Trial Cum Evaluation Process’ spread over several years, which saw several ups and downs, Elbit Systems was declared the lowest bidder (L1).
The deal was for the supply of 400 guns and indigenous production of the remainder 1,180 guns by Ordnance Factory Board (OFB), under a full Transfer of Technology (TOT) process.
Sources in the defence establishment said the price of Elbit Systems’ ATHOS was lower by 40 per cent compared to the price of its competitor — Nexter’s Trajan gun.
Sources in know of the bidding process said the cost per gun, which weighs less than 15 tonnes and has a fully automatic loading system, put forward by Elbit was less than Rs 11 crore per piece. This is also significantly lower than the estimated cost of the ATAGS, which is said to be anywhere between Rs 16-18 crore.
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However, since the bid opened in March 2019 and the completion of the cost negotiation process in July that year, a final decision is pending.
In December last year, the Israeli government also wrote a letter to Defence Minister Rajnath Singh to push for this deal.
However, the Defence Research and Development Organisation (DRDO) has gone on record to oppose any import plans, saying that its ATAGS was better than ATHOS and is the gun of the future.
Elbit’s offer
Earlier last year, the Israeli firm also wrote to the Indian defence authorities, stating that in case they prefer to acquire only the first 400 towed guns, the related cost corresponding to TOT can be deducted from the total contract price.
This was due to a line of thinking in the defence establishment that 400 of these guns (for 20 regiments) can be procured from Elbit to “overcome operational voids in the medium artillery in HAA (High Altitude Area) along the northern borders”.
However, sources said the figures in the RFP cannot be changed in the middle of the process.
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In the letter, Elbit Systems had offered the TOT for the future 1,180 guns as an option for India, at the same cost as mentioned in the commercial offer made.
Elbit also said it has finalised the approach and strategy to achieve 70 per cent indigenisation within the contract of the first 400 towed guns, starting from the first guns.
The company’s argument was that the ATHOS is tailored to the special requirements of the Indian Army and it has invested tens of millions of dollars in the design and development of the gun in accordance with Army requirements and in the field trials.
The sources said Elbit also promised to supply the guns much earlier than the contract delivery schedule — the first six guns within 10 months from contract signing, and an additional six guns within 14 months.
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According to the Israeli firm, all the remaining guns will be delivered according to an accelerated delivery schedule, which will ensure finalisation of the deliveries not later than 54 months from contract signing, instead of the 72 months stipulated in the draft contract.
In its communications with the Indian defence establishment, Elbit said the ATHOS will end up being an indigenous gun — mass produced, assembled and integrated in India.
Highlighting that it has a joint venture (JV) with Indian firm Bharat Forge, the Israeli company said the technology and design will be fully transferred to the JV and OFB, enabling the ATHOS to be mass-produced in India.
Incidentally, Bharat Forge is also involved with the ATGS development along with the Tata Group.
This report has been updated to reflect that the import embargo date for the artillery gun was extended to December 2021.
