IN sources told IHS Jane's that OTO Melara has offered its 127/64 LW - Vulcano gun system for 13 indigenously designed and built Shivalik-class frigates and Delhi-class destroyers.
OTO Melara emerged as the solitary vendor after BAE Systems declined to field its 127 mm/62 calibre Mk 45 Naval Gun System.
The November 2013 tender stipulated that three of the 13 naval guns would be imported and the remaining 10 licence-built by state-owned Bharat Heavy Electricals Limited (BHEL) at Haridwar, 200 km north of New Delhi.
The MoD also wanted the vendors to undertake production, quality control and timeline guarantees for the BHEL-produced naval guns but without providing the vendor with executive or supervisory authority over the public sector company.
BAE Systems opposed this arrangement, and in an official statement declared its unwillingness to accept the "disproportionate level of risk" in the tender.
Industry sources said OTO Melara has no such reservations as BHEL has been licence-producing its 76/62 Super Rapid Light gun since the mid-1990s. The contract will require special clearance by the MoD's Defence Acquisition Council, however, as India's defence procurement procedure (DPP) discourages solitary bids.
The DPP provides for exceptions based on operational exigencies, of which the 127 mm gun procurement is one, IN sources said.
OTO Melara will also require a special endorsement from the DAC for the 127/64 LW gun as it is a subsidiary of Finmeccanica. In January 2014 the MoD accused Finmeccanica affiliate AgustaWestland of corruption in the sale of 12 AW101 helicopters.
Thereafter, the MoD suspended all contracts with Finmeccanica and its subsidiaries, except those that were at an advanced stage of negotiation.
COMMENTClearance for the OTO Melara gun is unlikely to be problematic as defence minister Manohar Parrikar recently rejected blacklisting defence vendors as such a move would restrict India's materiel procurement options.
"Finmeccanica has 39 subsidiaries. Should we stop dealing with all 39? I don't agree. The military needs equipment," Parrikar told a Delhi-based television news channel on 12 December.
- OTO Melara's 127/64 LW - Vulcano gun system has been chosen to arm 13 Shivalik-class frigates and Delhi-class destroyers
- OTO Melara was the sole bidder for the requirement after BAE Systems decided not to go for the contest