The Government may allow middlemen in Defence deals as technical consultants.  As per a new policy under consideration, they will not be entitled to a bonus or success fee, and get payment from the vendor, who will declare so while negotiating the contract with the Indian Government. Talking about the role of agents, Defence Minister Manohar Parrikar said he would prefer to call them representatives or technical consultants.

“It exists in the Defence Procurement Policy (DPP) but is not clarified. It should be explained clearly so that bonuses, success fees and commissions are debarred,” he said.  Any other activity like technical information and attending meetings can be permitted to registered representatives, he said.

To repeated questions, the Minister said he would permit “agents” to be allowed with debarment of any payment which is related to business. “That means you cannot get a bonus out of an order, you cannot get success fees out of an order, you cannot get percentage out of this...You can definitely appoint a person for certain fees provided you disclose it to the department in advance,” he said.

The Defence Ministry is also open to reviewing all cases of blacklisted Defence firms on merit and has partially lifted a ban on Tatra trucks to enable the armed forces to procure spare parts for its Tatra trucks, Parrikar said. Tatra was banned in 2012 after the then Army Chief General VK Singh alleged that he was offered a bribe by a retired Army officer to clear a tranche of “sub-standard” trucks.

Elaborating upon the decision to give a conditional and restricted No Objection Certificate (NOC) to Tatra recently, Parrikar told journalists on Tuesday night the State-run BEMl was allowed to supply spare parts for the Tatra trucks as long as it does not deal with the British subsidiary of the company.  This subsidiary was banned by the previous UPA regime.

“We have lifted the restricted ban for technical and purchases of spares from the original company provided they have nothing to do with the people who have been blacklisted,” he said. Parrikar pointed out that one should not just go by the name Tatra as there are three to four companies which make the trucks.

“The company which has been banned is Tatra UK and we have permitted BEMl to deal with the original company which is owned by different people now,” he said, adding the condition is that they should not have relations with “questionable individuals.”  He said “a restricted Non Objection Certificate has been granted to BEMl, because we do need for Defence purpose Tatra vehicles. It has become critical for certain applications.”

Asked about the NDA Government’s policy on blacklisted firms, Parrikar said the “debarment principle” is also being worked out and pointed out the basic principle is in the interest of the armed forces. He added that based on merit and necessity, the Government can “consider after proper verification, lifting the ban or restriction to a reasonable level.”

The UPA Government had blacklisted several international companies due to alleged cases of corruption. The last major one was that of Italian Defence giant Finmeccanica in a Rs 3,600-crore deal regarding helicopters for VVIPs.

However, the Modi Government in August this year allowed Finmeccanica to do business with India but in a limited capacity.  It was banned from participating in future tenders but allowed to carry out ongoing contracts with the group.