Blacklisting policy for tainted defence deals approved

November 08, 2016 12:00 am | Updated December 02, 2016 02:14 pm IST - NEW DELHI:

The government on Monday approved the long- pending policy for blacklisting firms involved in corruption in arms purchases. The Defence Acquisition Council (DAC) also accorded approval to begin the procurement process for fighter jets, tanks and attack helicopters cumulatively worth over Rs. 82,000 crores, all produced domestically.

The DAC headed by Defence Minister Manohar Parrikar also reviewed all capital acquisition proposals of the armed forces currently under way.

“The DAC considered and approved the guidelines for suspending and banning business dealings with entities. Details of the blacklisting policy will be put up on the Ministry’s website in a few days,” Defence Ministry sources said.

The government has stated that instead of blanket blacklisting of firms involved in corrupt practices, heavy fines could be imposed and banning would be the last resort.

In several instances in the past, banning of firms had adversely affected defence preparedness as major military platforms were grounded due to lack of spares and support.

Nod for procurement

In other decisions, the DAC accorded approval for issuing Acceptance of Necessities (AON) for the purchase of 83 Light Combat Aircraft (LCA) Tejas worth about Rs. 50,025 crore and 15 Light Combat Helicopters (LCA) worth Rs. 2,911 crore, both manufactured by Hindustan Aeronautics Limited (HAL).

An AON is the first step in the long process of acquisition under the Defence Procurement Procedure (DPP).

The government has also re-designated the two projects under the recently created Indigenously Designed Developed and Manufactured (IDDM) category under the DPP.

Behind schedule

The Tejas jets are the improved Mk-1A variant with specific limited improvements in capability as sought by the Indian Air Force. However, the project for reconfiguration is running behind schedule and the Final Operational Clearance for Mk-1A is expected only in 2018. Air Chief Marshal Arup Raha had recently said that these jets would be inducted in about 5-7 years’ time.

The LCH is a 5.8 tonne multirole attack chopper indigenously developed and manufactured by HAL. Of the 15 Limited Series Production helicopters, 10 are for the IAF and five for the Army.

IAF has already committed itself to procuring 65 and the Army 114 of these helicopters.

Two other AONs have been approved for the Army. These include 464 T-90 tanks from the Ordnance Factory Board (OFB) for Rs. 13,448 crore in a repeat order and 598 mini Unmanned Aerial Vehicles (UAV) under ‘buy Indian’ category, estimated to cost Rs. 1,100 crore.

Clearance was also given for issuing a Request For Proposal (RFP) for procurement of six additional Pinaka Multi-Barrel Rocket Launchers at a total cost of Rs. 14,633 crore.

The Centre is expected to impose heavy fines, and consider a ban as

the last resort

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