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September 1, 2015

Defence ministry asks vendors to disclose foreign partners in air defence gun deals

 

The defence ministry has asked all Indian vendors keen on participating in a mega air defence gun contract to disclose their foreign collaborators, as well as the source of technology and production capability.

The move comes weeks after ET reported (August 3) that Indian firm Bharat Forge had written to blacklisted German company Rheinmetall asking for a possible collaboration on the project, besides accurately predicting the agenda of a high level defence ministry meeting in July.

In a firm official note dated August 18, the Army has asserted that it would not consider any Indian company for the Rs 16,000 crore contract unless details are shared within the next two weeks. It is also learnt that following the note, Rheinmetall has written to the defence ministry, saying that it has no valid partnerships with any Indian private company and has offered to revive a partnership with the Ordnance Factory Board for the contract.

"Vendors desirous of participating in the approved acquisition scheme related to procurement of Air Defence Gun (Successor) with Ammunition for which Request for Proposal (RFP) is to be issued shortly are required to submit Appendix E by 13 September.

No repeat No vendor will be considered for this scheme if its Appendix E is not received by due date," the Army note says. Appendix E specifies the need to share details of technology partners and foreign collaborators.

While the formal request for information (RFI) for the mega gun project was closed in May 2014, the unusual move to reopen the process after a year is expected to bring clarity on which foreign companies are collaborating with Indian firms for the contract.

The air defence gun project was to be executed by Rheinmetall Air Defence (RAD) with the Ordnance Factory Board (OFB) in 2008, but was shelved after the company was blacklisted in corruption charges.

ET has also learnt that the German company has offered to revive this 2008 contract with the OFB. Rheinmetall, which is fighting the blacklisting order in Indian courts, has also clarified in a letter sent last week that it does not have valid agreement currently with Indian private companies for the contract.

In fact, RAD has asserted that it retains the IPR on the 35 mm Oerlikon revolver guns and no Indian company has the right to sell its products.

Sources indicated that in response to the RFI that was sent last year, one of the Indian companies may have offered the Oerlikon gun as a solution for the Indian army, leading to confusion given that RAD is currently banned from participating in any Indian defence program.

With the Army now reopening the RFI, it remains to be seen whether more Indian private companies will participate in the contract. The RFI last year got a very lukewarm response, with even the state run OFB choosing to stay away.

econoictimes

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