Centre to cancel all defence tenders bagged by Finmeccanica

The central government has decided to cancel all ongoing tenders for defence equipment won by Italy’s Finmeccanica as a precursor to blacklisting of the firm which is being investigated for bribery in the AgustaWestland VVIP chopper deal.

This was disclosed by Defence Minister Manohar Parrikar, who also said that the process for blacklisting Finmeccanica and its subsidiaries has already been started and a note for the same sent to the Law Ministry.

"Wherever there is capital procurement of Finmeccanica and their subsidiaries, all Requests for Proposal will be closed. I am very clear,” he said.

However, he said, the annual maintenance and import of spare parts of already acquired defence supplies will be continued with the firm and only fresh capital acquisition is being nixed.

The government has already withdrawn the RFP for heavy weight torpedoes for Socrpene submarines which was won by WASS, a Finmeccanica subsidiary, during the United Progressive Alliance regime. The government is now working out the alternatives.

"The blacklisting process has already been moved. If there is a blacklisting for a specific number of years, which will be issued in the order, there will be no transaction by the Defence Ministry with that company for capital procurement for that many years," he said.

He stressed that the Ministry has already put on hold new transactions with the company.

"In revenue acquisition, where contracts have already been executed, annual maintenance and import of spare parts will be permitted where it is absolutely essential but with proper certification from concerned authority in order to ensure that platform or equipment remains operational,” he said.

Emphasising that national security ‘cannot be compromised’ just because the company has done something wrong, he said, “I cannot put six ships of mine out of commission because one spare part is to be imported from some company of Finmeccanica.”

Asked what will happen to projects in which Finmeccanica would play a crucial role in supply of equipment, Parrikar said, “Is there only one product in the whole world? There will always be products by Russian companies, American companies or some others, may be slightly costlier and difficult to get.”

A number of naval platforms under construction like four destroyers of the 15B (Visakhapatnam-class) and next seven ships of the Shivalik class stealth frigates are designed to be armed with the 127mm Otomelara main gun. Otomelara is a Finmeccanica firm.

The gun was to be inducted into the navy’s training schools too.

The navy was also in talks to induct short-range surface-to-air missiles from European consortium MBDA, in which Finmeccanica has a stake.

Also on the anvil were torpedo counter-measure suites through a joint programme of state-run Bharat Dynamics and Finmeccanica besides collaboration on network centric warfare prototype between Bharat Electronics and a subsidiary of Italian firm.

Finmeccanica subsidiary Selex ES is also involved in the supply of RAN-40L 3D air surveillance radars for the 40,000-tonne indigenous aircraft carrier which is under construction at Cochin Shipyard.