During the tenure of Manohar Parrikar as the Defence Minister, the Ministry of Defence had constituted a Committee of Experts headed by Lt Gen DB Shekatkar (Retired) to identify areas that could be made more efficient.
Among the committee’s mandates was ways and means to cut down manpower by bringing in the private sector,
without of course loss of productivity. Though our armed forces with its long borders and vast mountainous terrain that it has to defend will require a manpower intensive army, yet, should we be able to outsource certain activities we will be able to reapportion the manpower savings for new organisations we need to create.
One such area of focus of the Shekatkar Committee was the Army’s Electrical and Mechanical Corps (EME); that maintains almost everything starting from rifle to guns, tanks and helicopters. Its vast manpower resources have specialised skills. Its assets are distributed in layers with repair elements right upfront integrated with the combat units, followed by assets at brigade, divisional and corps levels that attend to progressively more and more critical repairs, refurbishment, overall of equipment and even designing, research and development, and manufacturing.
At the apex of this tiered repair echelons are the Army Base Workshops (ABWs). There are Advanced Base Workshops also that deal with very sensitive equipment; however they are not part of the issue in focus.
The Army has a total of eight ABWs, located across the country. Each one of these workshops specialise in a particular family of weapons and related equipment. Their location and mandates are tabled beneath.
Put together, the ABWs have an annual turnover upwards of Rs. 10,000 crore. Civilian staff accounts for over 75 % of the strength, yet there is a pool of military manpower that can be freed and redeployed should these be privatised.
Certain other army assets for maintenance of equipment are the station workshops that support static formations like sub-areas and area headquarters and their units. A host of them are located in Tier 1 & Tier 2 cities that are well served by private companies that provide equipment to the army. The station workshops could again be either taken over by private players, or pruned, by handing over repair and maintenance of certain equipment e.g., vehicles.
There are of course certain problems and drawbacks in privatisation. Foremost among these is loss of trained manpower. Maintaining a missile is a very different story as compared to any product in the civil market. Obviously, the process of transfer of assets would have to be protracted with expertise being gradually absorbed by the private industry.
The model that the government is opting for is ‘Government Owned Corporate Managed (GOCO)’. These assets will be operated by the private industry for agreed upon terms.
Private enterprises for taking over these assets would surely include the big players in defence manufacturing sector. It’s essential to also provide opportunities for smaller establishments that have top-end technical skills in the required areas. The MSMEs and SMEs may not be adequately equipped to manage an entire ABW, however there expertise needs to be utilised in the privatisation run.
The issue of selection of private parties could also be linked to the Strategic Partnership model that the Defence Procurement Procedure 2016 has mandated. A company nominated as the Strategic Partner in a particular area e.g., tanks, could be considered a formidable partner for the ABW servicing equipment of that sector – the two ABWs based in Delhi in this case. With global players forming partnerships with nominated Indian Strategic Partner companies, the ABWs will benefit from the trickle-down effects of Transfer of Technology.
However, a deeper analysis is required to work out a plan that has the potential to succeed. It’s doubtful to visualise private companies queuing up to take over ABWs. These have huge work forces that are barely productive. Private companies will insist on the government pruning the workforce before they step into the minefield. Glancing through a CAG report gives a fair idea of how these ABWs are operating as industries.
Even if private companies take over these ABWs, they will require huge investments in training of employees. With the army personnel being withdrawn from these establishments, the work ethics, or whatever ethics still survives in those yards, will crash.
It would be advisable for the government to offer a handsome voluntary retirement scheme for civilian employees before the project is progressed. The army should also be ready for disruptions in its equipment maintenance resources.
The ABWs are commanded by Brigadiers. The Corps of EME will lose eight flag rank appointments. They will be sore if not compensated elsewhere.
Every man who can be scraped from the Army’s logistics tail and added to its combat teeth is welcome. However, what if the exercise starts with reducing the military manpower in these establishments and fails to progress thereafter?
A huge political will would be required to undertake a successful exercise. With over 75% of the strength being civilians the government may as well be prepared for a protracted trench-battle with most non-saffron parties and even allies pouncing on it. The rumblings are already audible with civilian defence employees planning major movements in early 2018.
Brig SK Chatterji (Retired)