HomeIndian DefenceDefence Ministry inks Rs 39,000 crore deals; L&T bags record contract

Defence Ministry inks Rs 39,000 crore deals; L&T bags record contract

The defence ministry signed acquisition contracts worth Rs 39,125 crore on Friday, including the largest military deal for an Indian private sector company, that went to engineering major Larsen and Toubro (L&T).

The contracts included acquisition of upgraded fighter jet engines, supersonic cruise missiles, close-in weapon systems and high-power radars.

Cleared by the Cabinet committee on security (CCS) last week, five contracts were inked in the presence of defence minister Rajnath Singh and defence secretary Giridhar Aramane at South Block, with deliveries to start in the next two to three years.

The announced procurement of close-in weapon systems (CIWS) for the air force is the single largest procurement contract awarded to an Indian private sector entity (L&T) till date, at Rs 7,668.82 crore. The diversified conglomerate is also in contention to supply similar systems to the army.

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The CIWS has been a longstanding requirement of the armed forces to replace legacy systems from the 1970s. They have gained importance in recent years, given airborne threat such as drones, which larger anti-air systems are unable to track or shoot down.

The CIWS consists of air defence guns, as well as tracking and search radars linked to a central command system. The project is expected to generate 2,500 jobs annually. L&T will also provide Rs 5,700 crore of high-powered radars that will replace existing long-range radars of the air force with modern active aperture, phased, array-based radar that offer significantly more range and ability to pick up targets that are difficult to track.

MSME Involvement, says L&T
“The direct and indirect employment generated by this project would be approximately 1,000 people per year over five years,” a defence ministry official said. L&T said the projects will be executed at its manufacturing facilities, with extensive involvement of micro, small & medium enterprises. “Winning these complex hightech projects competitively after extensive trial evaluation is a testimony to our capabilities in design, development, precision engineering and manufacturing of advanced platforms and systems for the Indian armed forces,” said Arun Ramchandani, head of the defence business at the company.

The largest contract inked on Friday, at Rs 19,518 crore, was for the procurement of Brahmos missiles for the combat and training requirements of the Indian Navy.

This will generate employment of 900,000 man-days, ministry officials said. Besides, a Rs 988-crore contract for ship-borne Brahmos systems was also signed. Hindustan Aeronautics (HAL) will supply RD-33 Aero Engines for MiG-29 aircraft at a cost of Rs 5,249 crore. These engines will be produced at the Koraput division and will sustain operational capability of the fleet for its residual service life.

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