House informed about BEML's failure to keep decades-old promise

After nearly three decades and the import of parts for almost 8,000 military vehicles, the Defence Ministry’s efforts to indigenise Tatra vehicles for the Army through the Bengaluru-based Bharat Earth Movers Limited (BEML) is yet to pay off.

In 1983, BEML was chosen by the Defence Ministry for the indigenous production of Tatra vehicles because of their bulk demand.

The Army uses the Czech company’s all-terrain vehicles to transport tanks, launch missiles, tow guns, carry ammunition and as a fire tender.

Three years later, in May 1986, BEML signed an agreement for the licensed production of Tatra vehicles and spare parts with a validity of 10 years.

The following month, the company produced a project report claiming to achieve 86 per cent indigenisation by 1991 with the production of 1,030 vehicles.

By 2013-14, BEML achieved only 62 per cent indigenisation, despite the fact that the company assembled and supplied 7,942 vehicles in the last 30 years, the Comptroller and Auditor General (CAG) said in a report tabled in Parliament on Friday.

In a 2001 contract on the procurement of Tatra vehicles, the Defence Ministry purchased 1,070 high-mobility vehicles from BEML at a cost of Rs 285.72 crore.

There was additional expenditure on vehicles from Ashok Leyland (Stallion) and Telco (LPTA), both of which were approved for introduction into the Army in 2000.

Not only were procurements from BEML more expensive than the other companies, the public sector undertaking was paid 100 per cent interest fee in advance, violating the defence procurement procedure.

“On one hand, BEML was producing Tatra vehicles by importing major components from the original equipment manufacturer and on the other hand, alternative opportunities to local industries were not given,” the CAG said.

Incidentally, the level of indigenisation crossed 50 per cent mark in 2011-12, coinciding with the surfacing of the Tatra truck scam.
DH News Service