Army awaits corruption probe, doesn't seek fresh howitzer bids

Calcutta News.Net
Friday 3rd July, 2009 (IANS)

The Indian Army will not issue fresh bids to buy the ultra-light howitzer that it badly needs for frontline defence. Instead, it will await the outcome of the probe into corruption charges against the Singapore firm, whose guns it had chosen for field trials. The firm is among seven 'blacklisted' on corruption charges.

India has not bought any artillery guns since the controversial Bofors deal in 1986. This year, after 10 months of evaluation, it had selected Singapore Technologies for field trials of the ultra light howitzers. Then the firm was blacklisted by the defence ministry, jeopardising the modernisation plan. All dealings with blacklisted firms are on hold.

The first consignment of guns for field trials was supplied by the Singapore firm on May 29 and was positioned for the trials by June 5, the date the blacklist came out.

'The Pegasus light howitzer (of the Singapore Technologies Kinetics) has been selected for field trials after 10 months of evaluation by the defence ministry's Technical Evaluation Committee. So at the moment the Indian Army will not be issuing fresh RFP (request for proposal) for the ultra light howitzers,' a senior Indian Army official said, requesting anonymity.

'We will wait for the conclusion of investigations in the matter,' the official added.

The ultra light howitzers are required by the Indian Army to counter the Chinese threat as heavy artillery cannot be moved in the mountainous terrain of the Himalayas.

Meanwhile, the Singapore firm has approached the defence ministry for clarification on the development even as it claimed that it is yet to receive an official order regarding the blacklist. The Singapore firm has been the frontrunner for a Rs.29 billion ($612 million) order for 140 ultra-light howitzers.

'ST Kinetics has since approached the authority for clarifications and presented to the MoD (Ministry of Defence) a list of all our business activities in India,' Gaius Ho, assistant vice president (corporate communications) of Singapore Technology, told IANS via email.

'While awaiting a response from the MoD, we have offered all cooperation to assist with any investigation as appropriate and hope that the MoD will quickly review the matter and clear ST Kinetics' reputation,' Ho added.

Singapore Technologies was one of seven firms the defence ministry blacklisted June 5 after its name cropped up in a case registered by the Central Bureau of Investigation (CBI) against former Ordnance Factory Board (OFB) chief Sudipto Ghosh under the Prevention of Corruption Act.

Allegations of money being transferred to personal accounts had prompted the defence ministry to 'put on hold' all dealings with the blacklisted firms.

'We want to clarify that ST Kinetics has not received any official advisory from the Indian authority on the CBI investigation, and is highly disappointed with the implication. We have not in any way contravened regulations imposed by governments of the countries where we conduct our business,' Ho said.

Singapore Technology was also a contender for a Rs.80 billion order for 400 155 mm/52-calibre towed artillery guns as well as the indigenous manufacture of another 1,100 howitzers through the transfer of technology route.

The Indian Army had purchased 410 Bofors 155 mm howitzers in 1986 but the deal was mired in corruption charges and the name of then prime minister Rajiv Gandhi was dragged in. The Supreme Court eventually found no wrongdoing but the taint stuck to Bofors, as a result of which it was not considered for the new order.

Corruption charges also knocked out the South African Denel gun, leaving Singapore Technologies the sole contender in the fray.

The Indian Army is now left with just about half of its 410 guns, with normal wear and tear and cannibalisation accounting for the remaining howitzers.

The other six blacklisted companies are Israeli Military Industries, BVT Poland and Media Architects Pvt. Ltd of Singapore and three Indian companies: T.S. Kishan and Co. Pvt. Ltd., R.K. Machine Tools and HYT Engineering Co.

(Ritu Sharma can be contacted at ritu.s@ians.in)

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