Monday, 1 September 2014

Mahindra & Mahindra prefers consortium for defence; in talks with BAE, others

NEW DELHI: Learning from past experience in bidding for defence orders in India, Mahindra & Mahindra has decided to go the consortium way and is talking to global players, including erstwhile joint venture partner BAE.
"What we have discovered was that it's better to work as consortium because we have so many areas of interests right now," Mahindra Group Chairman and Managing Director Anand Mahindra told PTI in an interview.

Last year in February, the group had ended its joint venture with BAE Systems by buying out the partner's 26 per cent stake. The JV was formed in 2009 with plans of supplying artillery howitzers and anti-mine vehicles to the Indian armed forces.
"We dismantled the JV because we ran out of patience. Nothing was happening," he said.
Mahindra said that with the new government led by Narendra Modi in place, things have started to move now.
"They are moving. In certain areas like defence, RFPs (request for proposals) are being floated now," he said.
Elaborating on the group's decision to form consortium rather than enter into JVs, he said: "It's just a practical decision, which we have taken that given the number of areas we are in, we are probably better off bidding for large projects... JV is not the right way to do it. The right way to do is through consortium."
When asked about global players that the group was talking for such projects, Mahindra said: "We are in fact talking to the BAE again and to all the others... We are talking to BAE for the same bid, but we are saying that we do not know, so let's not go through the JV thing once again. Let's form a consortium."
He said while the easing of FDI norms to allow up to 49 per cent in defence was welcome, what was more important was to take "quick and transparent" steps.
"Suddenly we find out RFPs are being made. Will it be followed up? Will spending be carried out? Will the process be quick and transparent?" he wondered.

Mahindra further said: "Even at 26 per cent we had the partner BAE and they were ready to do business. That's not the problem. The problem was is the process of procurement happening. Is it happening transparently and predictively? And that's what will change defence and get production in."
Source :Economics TImes

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