Navy's Gun Procurement Plans Sail into Rough Waters - The New Indian Express

Navy's Gun Procurement Plans Sail into Rough Waters

Published: 19th January 2014 07:20 AM

Last Updated: 19th January 2014 07:20 AM

The Navy’s plans to procure weapons for future warships are at the risk of running aground. The force urgently needs 127mm guns, but its tender for 13 guns estimated at `1,500 crore finds itself in rough waters. To start with, there were only two vendors for the guns globally. While one has walked out of the tender, the other is facing uncertainty due to its parent company’s woes.

Sources said this could delay two key shipbuilding projects -- the seven follow-on Shivalik-class frigates and six Delhi-class destroyers -- that are in various stages of construction in domestic shipyards.

While UK’s BAE Systems has refused to bid, Italian Oto Melara, whose parent company Finmeccanica is facing corruption probes back home, is keen on participating in the tender.

Finmeccanica is also the parent firm of the helicopter manufacturer AgustaWestland, which is facing a probe over the allegations of bribes in a `3,727-crore deal for supplying AW-101 VVIP transport choppers to the Air Force.

The AgustaWestland contract was ‘terminated’ by the Defence Ministry on January 1, which is a precursor for the entire Finmeccanica group being blacklisted if the probe establishes wrongdoing on the helicopter manufacturer’s part. This has presented the Navy with a fait accompli. The tender is now on deathbed. The BAE’s non-participation leaves only one vendor in the fray and that is a strict no-no under the present Defence Procurement Procedure (DPP). The DPP stipulates that there has to be a competition (at least two competing firms) before the contract is awarded to the lowest bidder.

The Navy is facing the situation because the Defence Research and Development Organisation (DRDO) has not been able to design and develop a 127mm/5-inch gun indigenously.

“It is a pitiable state of affairs. We have not been able to develop an indigenous gun. Now, the search for a foreign gun too is virtually dead. In a single vendor situation, the tender is a non-starter,” a Naval officer told Express.

While a representative of Oto Melara in the country confirmed their participation in the tender, a BAE representative too confirmed their decision not to participate.

The Defence Ministry had issued the tender (Request for Proposals or RFP in defence parlance) to the two firms on November 12, 2013, and the companies were given time till March 2014 to respond.

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