After allowing foreign investment upto 49% in defence sector, the defence ministry is now turning its attention towards the decisions taken by the former UPA government of blacklisting foreign defence firms. It is learnt that the government is likely to review former defence minister AK Antony's move to blacklist foreign firms.
AK Antony had blacklisted four overseas defence firms on the charge of alleged corruption and canceled defence projects worth billions midway during procurement process during seven years of his stint in the ministry. In fact, over cautious Anotny even forwarded more than 50 complaints related to various defence deals to the CBI and Enforcement Directorate for investigation, which ultimately resulted in delay in procurement process.
"Ministry of defence is considering a review of major decisions taken by the previous government which include blacklisting of foreign firms. Armed forces have already concern over non-availability of critical weaponry due to ban on defence firms," a senior defence ministry official told dna.
In fact, during their interaction with the defence minister Arun Jaitely, three Service Chiefs i.e. Army, Navy and IAF, have apprised him about the impact on defence preparedness resulting out of this ban.
A week before, joint secretary (aerospace) KK Pant of the defence ministry made a detailed presentation to the Attorney General Mukul Rohatagi on the issue. Though the meeting was to discuss future course of action against global aero-engine firm Rolls Royce which is facing a probe regarding alleged corruption issue, blacklisting issue too was discussed with the top law officer. In February, the defence ministry had put on hold all future maintenance contracts with the Rolls Royce till the CBI probe completes.
According to a senior official, defence ministry had to sign a very crucial contract with Rolls Royce for maintenance and overhaul of the six types of aircraft engines in the AJT Hawk, Jaguar, Avro, Kiran MkII and Sea Harrier military aircraft and Sea King helicopters.
The defence ministry officials maintain that although all of these steps, which were aimed at promoting transparency and weeding out corruption, ultimately led to shortages of weaponry and equipment.
"Such moves not only created critical gaps in defence preparedness, but also cost of some equipment has also gone up tremendously after after the cancellation of the tenders. For instance, shortage of ammunition and artillery (howitzers) happened due to restricting armed forces to do business with those foreign firms".
The canceled tenders include a $720 million VVIP helicopter deal with AgustaWestland due to charges of corruption. A mid-air refueler tender worth more than $250 million was issued in 2007, canceled in 2009 and restarted in 2010. Proposal to procure 197 light utility helicopters for Army and Air Force, was canceled in 2008 and issued again in 2009. The project is still in limbo.
Foreign firms blacklisted by AK Antony
Israeil Military industries
Singapore Technologies
Rheinmetall Air Defence
CDR, Russia
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