The navy plans to buy Black Shark torpedoes for its Scorpene submarines - under-construction at a yard in Mumbai - from Whitehead Alenia Sistemi Subacquei (WASS), a subsidiary of Italian defence conglomerate Finmeccanica embroiled in a chopper scam.
After a desperate push by the navy that has called the torpedoes an “operational necessity”, defence minister Manohar Parrikar referred the proposed acquisition to the law ministry a few months ago but no guidelines have been issued so far.
The law ministry’s opinion on the case will be hugely significant as it will decide if the government can award military contracts to subsidiaries of banned companies, shaping an overarching principle for future deals. WASS had emerged as the lowest bidder for supplying the heavyweight torpedoes for the Scorpene submarines, the first of which will get commissioned late next year.
India, however, banned Finmeccanica last year from taking part in future military tenders after its UK-based subsidiary AgustaWestland faced bribery allegations in the Rs 3,727-crore VVIP chopper deal. The deal with WASS was put on hold in July 2014.
“No decision has been taken on the Black Shark deal. It’s still with the law ministry…the government knows we require the torpedoes urgently,” a senior navy officer said.
There’s no ban on ongoing contracts with the Italian defence major. The defence ministry imposed a partial ban on Finmeccanica last year but did not blacklist the company following the attorney general’s advice that a complete ban on the group could affect the military’s combat readiness. The NDA government has advocated a flexible approach in dealing with such firms if the military’s combat readiness is at stake. The Centre is working on new defence procurement rules that will have specific guidelines for arms agents and blacklisted firms.
In August, Parrikar told Parliament that his ministry “has decided to seek opinion in the matter (WASS torpedoes) from the Ministry of Law and Justice.” The first Scorpene submarine, Kalvari, is scheduled to kick off its weapon trials towards June 2016. Six submarines are being built at the Mazagon Dock Ltd with technology from French firm DCNS under a Rs 23,562 crore project called P-75.