Opinion: Why GOCO is no GO

By Lt Gen N B Singh (retired)

The latest move of the government to hand over operations of its army base workshop (ABW) at Delhi to private corporates for handling close support and rebuild operations of front line tanks has left many within the Army flummoxed and must have certainly amused our adversaries. The move is one of the recommendations from the Lieutenant General DB Shekatkar panel and the Army has come out with a Request for Information (RFI) seeking responses from interested corporates.

Private bidders will be required to carry out overhaul of T72 and T90 tanks and field replaceable units of T90 and T72. T90 tanks form a significant part of the strike elements.

ABWs are the last port of call for force regeneration of combat equipment like naval dockyards and base repair depots of the air force. An Army with 70% obsolescent inventory needs to empower and modernize ABWs so that, its vintage systems can be kept mission capable. GOCO could become a self-defeat initiative of the Army much against the recommendation of the Sheketkar committee to corporatize ABWs. CAG in report no 36 of 2016 on a performance audit of ABWs had recommended the creation of base rebuild facilities for T90 and the introduction of a cost accounting system. COAS has talked of force preservation during the current crisis, apart from keeping troops fit, he needs to ensure that front line combat systems are kept mission capable 24x7, 360 degrees. It appears equipment capability is not on the radar, else the go-ahead for such a specious move, that could drastically diminish mission readiness of T90 tanks would not have come. Instead of consolidating organic maintainer capability at ABWs, privatizing rebuild operations is a case of tearing down the fences without knowing why they were put up.

Corporatization v/s Privatization

How has the Army misconstrued corporatization as being synonymous with the privatization of core rebuild operations of ABW? Corporatization is the process of transforming state assets or municipal organizations into corporations. These state-owned enterprises are organized in the same manner as private corporations. The Finance Minister had also explained this difference very succinctly in her press briefing on 16 May while talking about the corporatization of Ordnance factories.

Base reset capability supports field formations by providing subsystems and field replaceable units (FRUs) to keep weapons in Ready to Fight (RTF) condition. During the war, technicians move to battle areas to return damaged and dysfunctional systems back into action. During Kargil, maintainers from ABWs supported missiles and Bofors in the forward areas. Maintainer capability may not appear to be of operational relevance in times of low-intensity conflicts though even after 30 years, Bofors continue to remain the Army's principal firepower provider at the Line of Control due to ingenious maintenance support by ABWs. The future is certain to bring into sharp focus consequences of decision making that places a heavy emphasis on cost efficiency when risk appears low.The Government Owned Contractor Operated (GOCO) model in ABWs is akin to the privatization of core functions of Research & Referral and Command Hospitals, no amount of cost-effectiveness studies can provide the raison d'etre to privatize specialist medical treatment and surgeries of soldiers. Employees' Contributory Health Scheme is under stress as mounting bills of private hospitals cannot be cleared. So why the tearing hurry to privatize technical support of weapons and equipment? After all soldier and equipment readiness still remain the principal battlefield operating systems of the 21st century.

What is intriguing is the sheer velocity at which GOCO initiative is being driven without even a Plan B, riding roughshod over reservations by many to look before the leap. The report by PWC has identified spares support as a vital production holdup issue and logically spares supply should first be put on the block. Examples world over have repeatedly reaffirmed the futility of GOCO experiments for the privatization of organic national security assets. There is an inherent convergence of objectives in the private sector, to maximize profits and this could be at the cost of equipment readiness. Hollowness will set in silently like cancer without Army even getting a scent. Also, the livelihood of 13,000 civilian employees will be affected by this move, a fallout that may not have been appropriately conveyed to the Govt.

Organic Capabilities during National Crisis

The Corona pandemic has amply demonstrated the importance of organic infrastructure in times of catastrophe. During the current contagion, it has been public sector organic capabilities that have displayed rapid response abilities. The performance of the country's organic infrastructure during the Corona crisis has shown that it can provide goods and services in the stride and adjust to work surges by collaborating closely with private industry to meet demands. They rightly deserve a salute by gunfire. Keeping our security landscape in view, future wars cannot be ruled out and organic capabilities will become indispensable. One significant pitfall of privatization is that private owners could raise costs manifold, miss timelines, and decline to move to combat areas once Army skills wither away. Capability gaps were experienced by the US during the Gulf war, constraining them to recreate organic capabilities at the Anniston Army Depot and others. Privatization of core rebuild operations for an Army faced with the prospect of a two-front war cannot be justified on costs. Unreliable and dysfunctional weapon systems could end up putting the country in a position of extreme disadvantage and loss of esteem.

It would, therefore, be prudent to focus on the root cause of suboptimal performance by ABWs, analyzed in detail in the CAG report No 36 i.e. spares supply. The upcoming T90 rebuild facilities at an ABW, is an effort to create maintainer capabilities, so that T90s can be supported through life, till 2050 and beyond like Bofors. T90 is not in service in any country in such large numbers, hence an indigenous maintainer capability and supply chain is the sine qua non for keeping it mission capable till 2050 and beyond. Across the border, our adversaries have created impressive rebuild capabilities to support T80, Al Khalid, howitzers, etc. (even ordnance factories are under Army's control) while the Indian Army is attempting fancy footwork like GOCO.

Outsourcing Logistics

The private sector has developed very effective capabilities in supply chain management. It is these capabilities that need to be tapped by the Army. It makes sense to associate the private sector in logistic functions of ABWs as a first step, rather than core engineering operations. Supply chain management is a core competence of the private sector--- supply of spare parts, localization, and scaling up manufacture can be done on the fly. This step alone can generate a business of 2500 crores annually for the MSMEs. Once logistics of ABWs become contractor-operated, general reset operations may be given to the private sector. But handing over rebuild operations of tanks, guns, missiles at this juncture may result in a seismic shock. The fact is that most of the Army's equipment is of imported origin and the private sector does not possess knowhow to take on rebuild operations. A collaborative approach of public-private partnership that ensures that operational capability gaps are fixed is the way forward, in view of the uncertain situation at the borders.

In conclusion, I will end on the note that privatization of rebuild operations at ABWs is a certain NO GO both from cost and effectiveness angle. This experimentation besides squandering public money will severely erode the overall equipment readiness of the Army. Maintainer capability plays an important role in keeping weapons fit for combat and ABWs are an integral part of this capability. Putting this organic industrial base in a tailspin will only degrade the Army's ability to come out with all guns blazing whenever the contingency arises. With humankind facing a global crisis, organic capabilities need to be preserved and livelihoods sustained.

(Lt Gen NB Singh , PVSM, AVSM, VSM, ADC (retired) is a former DGEME, DGIS, and Member Armed Forces Tribunal. Views expressed are his own.)