Ajay Banerjee
Tribune News Service
New Delhi, November 28
In an effort to strike a balance between tackling corruption in defence deals and having a method to deal with foreign companies who pay bribes, the Ministry of Defence (MoD) will address the contentious issue of ‘blacklisting’ companies in the forthcoming new Defence Procurement Procedure (DPP).
The MoD is all set to do away with ‘uniform blacklisting’ of foreign companies which were found guilty of offering bribes.
A new policy is being considered and ‘blacklisting’ a firm may not be good option as it just forecloses options for India.
The challenge is from corrupt elements on the one side and cutting down on the delays in equipping the forces with the best equipment, weapons and aircraft on the other.
Defence Minister Manohar Parrikar today told an annual conference of the industry body PHDCCI, “The blacklisting issue will be addressed in the DPP”.
He said he would welcome positive criticism of DPP “which will help us correct it”.
A committee headed by former Union Home Secretary Dhirendra Kumar, after talking suggestions, submitted a report on DPP and suggested that misdeeds of an entity or its employees should not be visited on the equipment or system.
In other words, it has been suggested that there is no need to block the supply of equipment in case some bribery charge emerges.
The MoD banned the Bofors artillery gun in the late 1980s. Since then, there has been no artillery gun purchase. Recently, the purchase of AgustaWestland helicopters was stopped midway. In both cases, suspected bribery charges emerged.
The question before the MoD is how to deal with foreign companies who — despite being the best in their class — offer bribes or are forced to offer bribe to bag contracts in India.
There would be no ‘blanket bans’. This will be in line with the decision the MoD took in August last year when it did not blacklist Finmeccanica, which owns AgustaWestland but offered a solution of graded punishment which ensured that no ongoing project would suffer.
The company was contracted to supply 12 AW 101 helicopters for VVIP travel in India which was mired in allegations of kickbacks. The deal was stopped midway.
Then, the MoD took a decision that the company would go ahead with all other contracts under execution; continue supply of spares and upgrades to India.
However, all contracts in which the company had been declared lowest bidder after competition shall be put on hold till further orders. The MoD said that in case of fresh tender or request for proposal, Finmeccanica would not be invited.