India bans Italian defence firm Finmeccanica from future contracts
NEW DELHI: India on Tuesday barred scam-tainted
Italian defence firm Finmeccanica from participating in future tenders while
deciding to carry out ongoing contracts with the group and its subsidiary
Agusta Westland, more than a month after putting all deals on hold.
The Defence Ministry issued an order on how to go
about dealing with Finmeccanica and its subsidiaries in the backdrop of
allegations of payment of kickbacks to the tune of Rs 360 crore in the Rs 3600
crore VVIP chopper deal which is under investigation.
Defence Ministry officials clarified that this partial
lifting of ban on Finmeccanica would not apply to AgustaWestland’s Rs 3,600
crore contract to supply 12 VVIP choppers to the Air Force as it has already
Over a month back, the Defence Ministry had put on
hold all the deals estimated to be worth over Rs 30,000 crore with Finmeccanica
and its subsidiaries in view of the CBI probe against the firm.
Subsequently, the new government had sought an opinion
from the Attorney General Mukul Rohatgi, who opined that blacklisting of
Finmeccanica would adversely affect the operational preparedness of the armed
The Ministry on Tuesday decided to continue the ban on
tenders where the firm has been declared as the lowest bidder. It also decided
to keep it out from tenders which are to be issued in future, Ministry
The Ministry has also ruled that the company would not
be considered for award of contracts in tenders where other vendors are also
At the same time, the ministry provided relief to the
firm as it allowed the armed forces to go ahead with the contracts that are
already under execution as ‘there is no reason to proceed with the contracts’.
The Defence Ministry also allowed the armed forces to
procure spares for upgrades and maintenance of equipment that has been procured
from the firm along with allowing participation of the company in tenders where
it is one of the sub-contractors or supplier to the main contractor of the
Indian government, they said.
The Defence Ministry order will help in the movement
in several deals such as the procurement of 16 multirole helicopters for the
Navy in which Sikorsky and Agusta Wetsland-led NH Industries are in the race
for the Rs 6,000 crore contract.
The decision to allow the firm and its group companies
as sub-contractors would help in the upgrade of Russian-origin Mi-17 and Kamov
helicopters as Finmeccanica group company Selex is part of it.
Decision to allow the scam-tainted group to continue
supplying spares would also help keeping operational over 300 sets of high
frequency communications systems of the Navy and more than 40 long range
surveillance radars of the Air Force.
The deals where Finmeccanica is lowest bidder and was
in the final stages of getting the contract was for DRDO's Rustom unmanned
aerial vehicle (UAV) project. It was also about to sign a deal with India for
supplying and transfer of technology of the Oto Malera guns for warships.
The multi-vendors tenders where it will now be kept
out include several navy and air force contracts to procure radars for air
bases, surface warships and air carriers.