Defence minister AK Antony told parliament on Monday that the Centre had decided to put on hold work on the complex in the light of the ongoing CBI investigation into alleged corruption.
he massive ordnance factory complex that George Fernandes sanctioned for his Lok Sabha constituency Nalanda when he was the defence minister seems to be following his political fortunes.
Defence minister AK Antony told parliament on Monday that the Centre had decided to put on hold work on the complex in the light of the ongoing CBI investigation into alleged corruption by former ordnance factory board chairman Sudipta Ghosh.
The investigators have found that “Ghosh received kickbacks from Israeli Military Industries (IMI)”, which was given the contract for building the Rs1,200-crore complex in Bihar days before the general election was announced earlier this year.
This is the second time after Fernandes left the ministry of defence (MoD) that the project has been put on hold. Strangely, on both occasions the reason given was alleged corruption. The factory was sanctioned by Fernandes, a gift to Nalanda that sent the trade union leader from Karnataka three times to the Lok Sabha.
The cabinet committee on security approved the project in 2001 for manufacturing the bio-modular charge system for Bofors guns. Originally, the NDA government of AB Vajpayee engaged South African firm Denel. But it got embroiled in corruption cases and the UPA government blacklisted it in 2004.
MoD sources said the project was put on hold in 2005 because of the political nature of its location and the Denel blacklisting. Antony said the cost of the project had gone up in the meanwhile and an expert committee had been appointed to decide its future. The government had no option but to allot more money since it had already spent Rs306.04 crore on the complex.
Days before the general election was announced, the government awarded a Rs1,200-crore contract to IMI for the complex. But in recent weeks, it has emerged that the company may have influenced the ordnance factory board under Sudipta Ghosh through illegal means to win the contract.
“The project deadline is August 2011. However, in view of the case registered by the CBI against Sudipta Ghosh, former director general, ordnance factories, and some others, it has been decide” by the MoD to “put on hold for the present all procurement cases with Israeli Military Industries on whom the contract for supply of the bi-modular charge system plant has been placed.”
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