But final call after A-G’s opinion on the ongoing probe against AgustaWestland
In a major decision, India has put on hold all fresh procurements from Italian conglomerate Finmeccanica in the wake of one of its firm AgustaWestland’s alleged involvement in the VVIP helicopter scam. Finmeccanica is in the race for Defence contracts worth over Rs 30,000 crore.
The two orders issued recently by the Defence Ministry to Department of Defence Production and three Services besides Public Sector Units and Ordnance Factory Board say “there should be strict compliance to the directive that all procurement/acquisition cases in pipeline with Finmeccanica group of companies including, its subsidiaries and affiliates, should be put on hold.”
This directive will be effective till the Government gets Attorney General’s opinion on the ongoing probe against AgustaWestland by the CBI and Italian investigation into alleged bribes paid by some executives of Finmeccanica to bag Defence contracts, sources said on Tuesday. The Government will take a fresh view after getting the legal opinion, they added.
The Ministry has also directed all its departments to stop any kind of dealings with the firms named in the VVIP helicopter scam FIR, including AgustaWestland, IDS Tunisia, IDS Mauritius, IDS Infotech, Mohali and Aeromatrix Solution limited, Chandigarh.
Finmeccanica is the parent firm of AgustaWestland accused of paying kickbacks to the tune of over Rs 360 crore in the Rs 3,600 crore deal for supplying 12 VVIP helicopters to IAF. The Government cancelled the contract with Agusta in January this year.
After the scam broke out early last year, the UPA Government had decided to go slow on Defence deals with the Finmeccanica group but this is the first time it has issued orders to put the deals with the group on hold.
The two circulars may also hit Navy’s requirements for radars as Finmeccanica group company Selex is supplying radars for Indigenous Aircraft Carrier INS Vikrant.
Selex has already supplied 300 sets of high frequency communications systems to the Navy and is also supplying precision approach radars for enabling landing of military aircraft in bad weather.
It has also supplied more than 40 long range surveillance radars to the IAF. The informal ban is likely to affect the spare supplies and air space management by the force.
Navy’s requirement for Otomelara guns designed by another subsidiary of Finmeccanica and produced locally by the public sector firm BHEl, is also likely to be impacted as the 127mm guns are the main weapon of the Indian navy warships. The Government has also deferred a Rs 6,000-crore 16 helicopter deal for the Navy in which one of the two companies is linked to the Finmeccanica.
There are several deals such as the development of the indigenous Unmanned Aerial Vehicle Rustom for which Selex radars have been planned to be inducted. The Government is also taking a call on whether the ban would extend to companies in which Finmeccanica has stakes.