Army's Government-owned, contractor-operated (GOCO) Model

• The Indian Army’s ambitious plan for modernising Army Base Workshops (ABWs) and implementing the ‘Government-owned, contractor-operated (GOCO)’ model is “delayed”.
• The original timeline for implementing the system lapsed in December 2019.
• The implementation of GOCO model is fraught with risks and operational challenges.

About GOCO:

• Indian Army in January 2020 initiated the process of identifying potential industry partners to implement the GOCO model for its base workshops and ordnance depots intended to improve operational efficiency.
• This model was recommended by Lt. Gen. DB Shekatkar (Retd.) committee to enhance combat capability and re-balancing defence expenditure.
• It is one of the major reforms the army was considering in order to improve its combat capability while reducing spending.
• In it, the assets owned by the government will be operated by the private industries.

Eligibility for private entities:

• The service provider should be an Indian registered company with at least 10 years of working experience in related domains and have an average annual turnover of ₹50 crore for each of the last three financial years.

Issues

• In GOCO model, the assets owned by the government will be operated by the private industries.
• In such cases, there are possibilities of protraction of assets and the expertise being absorbed by private industry.
• The military manpower involved in the workshops is only 25% and 75% are civilian staff.
• The private companies might insist on rationalizing the workforce. The ratio of 75: 25 will become difficult to maintain.
• The modernisation of ABWs was also plagued by administrative inefficiency and delays in deciding whether to execute the modernisation project on a turnkey basis or through a combination of procurement and work.

Significance

• The best technologies grow at a faster rate.
• The private companies need not make investments on land, machinery and other support systems.
• The missions are set by the government and the private sectors are given full independence in implementing the missions using their best practices.
• Targets are achieved in a shorter time frame.
• It also boosts competitiveness among the private entities paving the way to newer technologies.

Army workshops / Ordnance factories

• Total 8 workshops in India located in Jabalpur, Allahabad, Meerut, Kirkee, New Delhi, Agra, Bengaluru and Kankinara.
• Only Bengaluru workshop manufactures spares.
• Rest are involved only in overhauling.