L&T, BEL consortia likely to bag Rs40,000-cr defence project

11 Feb 2015


Engineering major Larsen & Toubro will team up with Tata Power while state-run Bharat Electronics Ltd (BEL) and private sector Rolta India will pool in resources for developing $40,000-50,000-crore battlefield management system for the Indian Army, perhaps the first of the Narendra Modi government's 'Make' in India projects.

The defence ministry will fund two Indian consortia in developing the Rs40,000-50-000 crore 'battlefield management system' (BMS), a digital wireless network that will interlink soldiers and battlefield sensors through voice and data channels, providing a common battle picture to each soldier.

Reports said the defence ministry has selected two consortia - one comprising Larsen & Toubro (L&T) and Tata Power and another comprising Bharat Electronics Ltd (BEL) and Rolta India - which will act as development agencies.

The previous government had, in November 2013, invited bids from a dozen companies for appointment of development agencies for the 'make' category of the Defence Procurement Policy of 2013 (DPP-2013).

Both consortia will develop separate prototypes of the BMS system for which the defence ministry will reimburse 80 per cent of the expenditure. A special 'integrated project management team' (IPMT) of the defence ministry will select the better prototype, and both consortia will then bid for the contract to mass-produce the BMS for the military. The lowest bidder will get the contract to mass-produce the BMS.

The development agencies have been chosen on the basis of their technology and indigenisation plans.

Under the 'make' category, an Indian company must lead a project, though it could have foreign partners. At least 30-per cent of the system that is built must be indigenous.

The development and procurement of BMS networks, which includes developing software and building hardware to interlink soldiers within a combat unit and interlink the Army's 500 combat units, is estimated to cost up to Rs50,000 crore.

The agencies are expected to develop separate custom-designed networks for the Army's armoured, mechanised, infantry and special forces combat groups.

Meanwhile, two consortia - one led by BEL and the other comprising Tata Power, L&T and HCL, are developing another mobile digital backbone network called the tactical communications system (TCS) that connects front-line soldiers with commanders and support weapons in the rear.

These projects are expected to rope in micro, small and medium enterprises (MSMEs) for the project development as the MoD will be reimbursing up to 100 per cent of a company's development expenditure, provided 20 per cent of the work is outsourced to MSMEs.

Besides the trickling in effects to the economy, the BMS which pools inputs from battlefield sensors such as surveillance radars, seismic sensors, long-range optical sensors and thermal imaging devices, will also help plug into other components of the futuristic high-tech army.

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