New Delhi: To prevent derailment of armed
forces acquisitions and to uphold principles of natural
justice, India has decided to provide opportunity to defence
firms named in shady under-dealings before blacklisting and
keeping them out of future contracts.
The decision comes in the wake of legal advice to the
Defence Ministry with regard to a couple of artillery gun
manufacturers named in police cases of corruption against
former Ordnance Factories Board chief Sudip Ghosh, leading to
the delay in purchase of much-needed howitzers for the Army.
"Basically, the High Court has held that merely on FIR we
cannot blacklist. We have to provide an opportunity and then
take a decision. This process is going on. Some procurements
have been put on hold," a top Defence Ministry official said
A decision on blacklisting cannot be taken "until and
unless we give notice and consider their replies", as ordered
by a high court in one of the cases relating to a `barred`
company, he said.
Admitting that Bofors scandal in the late 1980s had tied
the Defence Ministry`s hands from procuring guns to strengthen
the Army`s artillery capabilities in the last two decades, the
official said, "artillery has been one of the problem areas,
one of the voids...that stares you in the face.
"But after a long time now, trials for two of the four
artillery guns that Indian Army requires are going on," he
India will buy 145 of the 155mm/39calibre Ultralight
Howitzers M777 from the US under the Foreign Military Sales
(FMS) route for an estimated USD 650 million for which trials
are currently in progress.
In a multi-vendor situation, India is looking at
procuring 180 of 155mm/52calibre wheeled self-propelled guns.
"Hopefully we will be able to get these. The Ultralight
Howitzers is through the FMS route and the other is a
multi-vendor situation," he said.
Asked about the delays in purchasing the artillery guns,
he said, "We have many of the companies for artillery
guns involved in some case or the other."
To a query on the prudence of `blacklisting` firms in all
future deals, he said it was India`s way of announcing to the
defence firms that they "cannot fiddle with Indian laws,
rules, regulations and processes."
The Defence Ministry had in May last year `blacklisted`
seven firms and put on hold all deals with them. Foreign
companies Israeli Military Industries, Singapore Technologies,
BVT Poland and Media Architects of Singapore; and Indian firms
T S Kishan and Company, R K Machine Tools and H Y T
Engineering Company were among those who had come under the
scanner in the CBI-registered corruption case against Ghosh.
In July this year, the Defence Ministry received a
recommendation from the CBI to `blacklist` foreign firms
Singapore Technologies Kinetics (STK), Israeli Military
Industries (IMI), Zurich-based Rheinmetall Air Defence (RAD)
and Russian Cooperation Defence, apart from Indian firms T S
Kisan and Company (New Delhi) and R K Machines Tools
However, it was later decided that the `blacklisted`
companies participating in the artillery guns tenders would be
allowed to join the trials of their weapon systems in Indian
conditions. But contracts would not be awarded till they were
absolved in the court cases relating to the corruption cases.
In June, the CBI had filed a 2,700-page charge-sheet in a
special CBI court in Kolkata against Ghosh, the former
Director General of Ordnance factory Board and 11 others on