November 4, 2014

Auditor no to Navy’s Rs 6,000 crore deal

 The attorney-general (A-G) has recommended cancellation of a proposed defence deal for the acquisition of eight minesweeper vessels, estimated to be worth about Rs 6,000 crore, from the South Korean Kangnam Corporation after allegations of involvement of middlemen, official sources in the ministry of defence (MoD) have confirmed. 
The MoD had sought the view of A-G Mukul Rohatgi in the matter. The government may now find it difficult to ignore the opinion of the A-G and the deal could soon be cancelled, much to the dismay of the Navy, which is desperate to add more minesweepers to its fleet.
In the process to acquire eight minesweeper vessels for the Indian Navy, South Korean Kangnam Corporation had already been declared as the lowest bidder from a list of three vendors and was expected to clinch the deal. The allegations had first surfaced during the tenure of the previous UPA-2 government.
Fears are being expressed that such a move could adversely affect the operational preparedness of the Navy. Minesweeper vessels clear the waters of enemy mines in the event of a conflict.
According to the proposed deal, Kangnam Corporation was to supply two minesweepers to the Navy, while the remaining six were to be built in India through technology transfer.
The Modi government had, in August this year, scrapped a seven-year-old global tender worth thousands of crores for the acquisition of 197 helicopters for the Army and IAF after the acquisition process was mired in allegations of corruption.

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