Corporatisation of OFB: Defence Ministry moves to hire consultant, workers’ federations say ‘game plan exposed’

In the fourth tranche of the Atmanirbhar Bharat initiative, Finance Minister Nirmala Sitharaman had, on May 16, announced the decision of corporatisation of OFB for “improving autonomy, accountability and efficiency in ordnance suppliers”.

Moving ahead with its plan to corporatise the Ordnance Factory Board (OFB), the Ministry of Defence has invited Expression of Interest (EOI) cum Request for Proposal (RFP) for the selection of a consultant for strategising and implementing the proposed corporatisation. In response, three main federations of the ordnance workers have said the move has “exposed the government’s game plan”.

The invitation for EoI cum RPF, published on the website of Department of Defence Production (DDP) of the MoD, is titled ‘EOI cum RFP for selection of consultant for providing strategic and implementation management consulting services to assist the Ministry of Defence in the process of corporatisation of the Ordnance Factory Board.’ It states “The DDP of MOD invites EOI cum RFP from reputed India-based consulting agencies to provide management consulting services covering topics like strategic future growth,optimal operational strategy, organisational restructuring and other related implementation issues with respect to transition management, financing, legal aspects etc, to assist the MOD in the process of corporatisation of the OFB, a project initiated by the DDP.”

Outlining the scope for the consultant, the MoD invitation for EOI cum RFP says, “The consultant shall work in close interaction with the DDP to produce a comprehensive report for corporatisation of OFB, keeping in mind the background and goals. This must enable the DDP to determine the best-suited model for converting OFB into one or more corporate entity(ies), in light of the existing financial, legal, operational and economic scenario…The project will consist of two phases of approx. six months each. In the first phase, the overall strategy, vision and operating model along with financial and legal implications and detailed roadmap for implementation will be outlined by the consultant. In the second phase, the consultant shall support in implementation, project management through the entire project roadmap and co-ordinate and monitor the progress of the corporatisation process and until its completion. The Consultant will also assist the DDP in presenting matters before the Empowered Group of Ministers (EGoM).”

In a joint letter, the general secretaries of the three federations stated, “The game plan of the government is totally exposed on the proposed move to corporatise the 41 ordnance factories. On one side, the drama of the high level official committee (HLOC) meetings continues, and on the other hand, the MoD has floated a RFP.”

The HLOC was formulated in September last year after the three federations had called a strike to oppose the corporatisation move, which was initiated last year. Back then, the federations had rejected the terms of reference of the HLOC. On June 5 this year, the HLOC again initiated the dialogue with the federations of the workers and gazetted officers of the OFB.

The three key federations of defence workers, which represent close to 85 per cent of the 82,000-strong workforce from 41 ordnance factories across the country, have strongly opposed the proposed corporatisation since its inception. The strike ballot called by these federations against the proposal had concluded on June 17, in which workers had voted in favour of an indefinite strike. However, considering the situation along the Line of Actual Control (LAC) with China, the date of the strike is slated to be announced later this month.

The three federations are Bhartiya Pratiraksha Mazdoor Sangh (BPMS), an arm of RSS affiliate Bharatiya Mazdoor Sangh, federation of Left unions All India Defence Employees’ Federation (AIDEF) and the Indian National Defence Workers’ Federation (INDWF) of the Congress’s INTUC. The federations have argued that a corporate entity would not be able to survive the unique market environment of defence products, which have a very unstable demand and supply dynamics.

In the fourth tranche of the Atmanirbhar Bharat initiative, Finance Minister Nirmala Sitharaman had, on May 16, announced the decision of corporatisation of OFB for “improving autonomy, accountability and efficiency in ordnance suppliers”.

The OFB, an umbrella body for ordnance factories and related institutions, is currently a subordinate office of the MoD. It is headquartered in Kolkata and is a conglomerate of 41 factories, nine training institutes, three regional marketing centres and five regional controllers of safety.