Italian firm in bid to stymie Tata border airfields deal

Selex Sistemi Integrati, Spa, an Italian company that has filed a petition in the Delhi high court alleging irregularities in the contract to modernise 30 airfields — many of them along on the Chinese border — is a major supplier of military equipment to China and Pakistan.

A document filed before the court by the Tata Power Company, which won the contract, says that Selex has been “supplying military equipment to Pakistan and China. The petitioner (Selex) on its website claims 75% market share of the Chinese air field market which finds no mention in the writ petition filed by the petitioner.”

The Tata company says that the “petitioner has also played a major role in supplying defence equipment to Pakistan and has armed these countries with sophisticated military equipment.”
By implication, the Tata petition seems to suggest that Selex’s court case is an attempt to delay a national security project by a party that has major interests in China and Pakistan, India’s military rivals in the region.

The Tata firm argues that “modernisation of airfield infrastructure is vital and necessary from the point of view of national security, given the current external threat, especially from China.” It also emphasises that the contract was won on merit. Modernisation of various airfields along the China border is crucial to India’s efforts to beef up its military capabilities to match that of the communist giant.

Of the 30 airfields that are to be modernised, 24 are along the Chinese and Pakistani borders. The Rs 1,000 crore contract is the largest won by an Indian private company in a global tender floated by the defence sector.

Supporters of indigenisation hailed the contract as a breakthrough for the Indian private sector, which has been kept out of lucrative defence deals by foreign firms and defence public sector units.
Selex, which lost out on the contract, took the unusual step of moving the Delhi high court alleging several irregularities in the tendering process. It demanded a stay, but that was not granted by the Delhi high court at the hearing on January 15.

Selex’s decision to move court is unusual, since this is not done in defence deals. Even when companies such as European giant EADS lost out after coming very close to signing mega deals, they didn’t go to court.

According a senior air force officer, any possible delay to the Tata contract is a cause for worry as the airfields are to come up largely on the sensitive China border. The officer said that any “clash of interest” involving foreign military firms is a “matter of grave concern” and a broader “national policy” should be drawn up while qualifying foreign firms for such sensitive contracts. “We have no means to verify if the court case is prompted by any other reason,” he said.

“For now the court has not granted a stay, so they (the Tata company) are going ahead with the work,” the officer said of the contract. But he would be worried if the project is delayed.