The Defence Ministry on Wednesday scrapped the Rs2,700-crore proposed deal for acquiring two minesweepers for the Navy from South Korea following allegations of involvement of agents. India’s Defence procurement procedure does not allow agents in Defence deals and the Government has already en-cashed Rs3 crore bank guarantee furnished by the South Korean manufacturing firm Kangnam.
The deal was not inked after the allegations about agents surfaced and the Government decided to scrap it after Attorney General Mukul Rohtagi recently recommended the scrapping of the entire selection process for minesweepers. These specialised small ships detect and neutralise anti-ship mines.
Disclosing the decision to scrap the deal, officials said here on Wednesday that the South Korean firm was to build two ships while the remaining six were to be manufactured by Goa Shipyard limited under the transfer of technology pact. The shipyard will now build all the eight vessels, they said adding the entire contract is worth over Rs6,000 crore.
The price negotiation with the South Korean was completed in 2011 after the tender was floated in 2005 followed by trials. The previous UPA Government did not sign the deal after coming to know about involvement of agents, they said.
Goa Shipyard is permitted to collaborate with a foreign manufacturer for this project and the South Korean firm can participate in the bid as it is not blacklisted, officials said adding fresh tenders will be floated soon.