MoD new blacklisting policy silent on banned firms

According to new rules, India can do business with banned companies if there is no available alternative in the market.

Published: 22nd November 2016 08:10 PM  |   Last Updated: 22nd November 2016 08:10 PM   |  A+A-

By Express News Service

NEW DELHI: After a year old deliberations, Manohar Parrikar led defence ministry has finally unveiled the 'guidelines for penalties in business dealings with entities' which appears to be more liberal than norms followed by previous UPA government.

Though the ministry claims to have simplified rules for blacklisting but the ministry is silent on the future of four foreign companies that were debarred for doing business in India for ten years by the then defence minister AK Antony.

The blacklisted companies include the Singapore Technologies, Israeli Military Industry, Germany's Rheinmetall Air Defence and Corporation Defence of Russia for their alleged involvement in a multi-crore ordinance factory scam. These companies have already moved court against the government decision.

Defence Minister Manohar Parrikar said that the Director General (Acquisition) will draw up a list as required under the new policy and hence old cases will also be looked into including about a dozen firms that were blacklisted, but it hit modernization program.

"That does not mean they will be taken out. Don't interpret... they will be examined. What is the status, how many years they have been blacklisted for and why they were blacklisted," Parrikar said on the sidelines of an event in the national capital.

According to new rules, India can do business with banned companies if there is no available alternative in the market. Like due to ban on key Israeli defence firms, production line at newly set up Nalanda ordinance factory could not take off.

But now, this will be allowed after due approval from the highest authority in the Service, not below the rank of Vice chief of concerned service.

Parrikar has been maintaining the stand that national security should not be compromised due to this blanket ban of erring defence firms.

New police also state that banning of business dealings, in turn, may be ordered only if a company accepts its misconduct, the CBI files a chargesheet against it or a court or tribunal finds it guilty.

But the fresh guidelines also makes it clear that the ban period will not be less than five years in the case of violations of integrity pact unlike the blanket ban of 10 years during the previous UPA government. But the new policy does not mention the maximum time period for ban.

And the company against which  ban was imposed, will be allowed to take part in new tenders for spares, upgrades and maintenance for weapon systems supplied earlier.

“The entity with which business dealings are suspended or banned, may with the approval of cometent authority, participate in the future RFP (tenders) for spares, upgrades, maintenance etc. for the equipment/ weapon systems supplied earlier by it, if the equipment which is the object of the contract is a propriety item and there are no available alternate sources of supply,” guidelines further states.

It is notable that multiple ongoing projects of Navy and IAF were hit due to blanket ban on business dealings with the company involved in malpractices.

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