A crucial opinion from the law ministry will determine if the government can award a military contract to the subsidiary of a banned defence conglomerate. The advice could also shape an overarching principle for future deals.
Italian defence giant Finmeccanica’s subsidiary Whitehead Alenia Sistemi Subacquei (WASS) emerged as the lowest bidder for a contract to supply heavyweight torpedoes for the Navy’s Scorpene submarines, the first of which is likely to get commissioned in September 2016.
India had last year banned Finmeccanica from taking part in future military tenders after its UK-based subsidiary AgustaWestland faced bribery allegations in the `3,727-crore VVIP chopper deal. The deal with WASS was put on hold in July 2014.
On Tuesday, defence minister Manohar Parrikar told Parliament that his ministry “has decided to seek opinion in the matter from the ministry of law and justice.” The Navy has been pushing for buying Black Shark torpedoes from WASS, calling it an operational necessity.
A government official said the law ministry’s opinion would be critical for the armed forces as it would set the precedent for dealing with banned firms.
There is no ban on ongoing contracts with the Italian defence major. The defence ministry imposed a partial ban on Finmeccanica last year but did not blacklist it following the attorney general’s advice that a complete ban on the group could affect the military’s combat readiness.
The first Scorpene submarine, Kalvari, is scheduled to kick off its year-long sea trials in October. Weapon trials will take place towards June 2016. “The Scorpene trials will not be affected by the acquisition of Black Shark torpedoes. We will use the German SUT torpedoes for the trials,” said a senior official.
Scorpene submarines are being built at the Mazagon Dock Ltd in Mumbai with technology from French firm DCNS under a `23,562-crore project called P-75.