All new procurements from Finmeccannicca put on hold

The decision could hamper military modernisation

August 06, 2014 02:17 am | Updated 02:17 am IST - NEW DELHI:

The government has put on hold all new procurements from the Italian firm Finmeccannicca — the parent company of helicopter manufacturer AugustaWestland, which has come under a cloud following allegations of corruption regarding an aborted deal for 12 VVIP helicopters for the Indian Air Force (IAF).

The Department of Defence and the Department of Defence Production have issued separate circulars, instructing all three services, public sector firms, the Ordnance Factory Board, and departments concerned to suspend “all procurements/acquisitions cases in pipeline with Finmeccannica group of companies, including its subsidiaries and affiliates.”

The government has scrapped the helicopter deal following allegations that kickbacks to the tune of Rs. 360 crore were involved in the deal, which would have amounted to Rs. 3,600 crore.

The Ministry has also asked Indian defence entities and departments to cease dealings with any affiliated firms, including AgustaWestland, IDS Tunisia, IDS Mauritius, IDS Infotech, Mohali and Aeromatrix Solution Limited, Chandigarh.

The latest orders could hamper military modernisation, including the Navy’s efforts to acquire radars for its projects, such as the indigenous aircraft carrier.

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