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India penalises Israeli defence firm for
contract breach
Monday April 16, 2012 08:18:22 PM,
IANS
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New Delhi: For the
first time in its history, India has imposed a penalty on a
foreign defence vendor for breach of contract in the establishment
of ordnance factories for manufacturing bi-modular charges for the
Indian Army's 155mm howitzers at Nalanda in Bihar.
The Indian defence ministry officials, though, did not provide the
worth of the guarantee provided by the Israeli Military Industries
(IMI) that had signed the Rs.12 billion ($260 million) contract
for setting up the factories in Nalanda.
The IMI was a couple of months ago banned from participating in
any tender of the Ordnance Factory Board (OFB) following the
Central Bureau of Investigation (CBI) recommending that it be
blacklisted along with three other global and two Indian firms
after their names figured in a graft case filed against former OFB
director general Sudipto Ghosh in 2010.
Under the Nalanda factory contract, IMI had signed an 'integrity
pact' under which it had promised not to indulge in any
malpractice.
"This integrity pact had been breached and hence the defence
ministry encashed the bank guarantee given by the IMI," the
official said here.
This information was given by the OFB officials to Defence
Minister A.K. Antony at a review meeting of their performance and
functioning at the South Block here.
He was also informed that the OFB has now tied up with the Defence
Research and Development Organisation (DRDO) for indigenising the
bi-modular charges that have already undergone trials.
"OFB is now hopeful that it will be able to offer the indigenous
bi-modular charges for user trials to the army soon," the
officials said.
The meeting is part of a series of such review that Antony has
been holding with officials of the ministry, three services,
defence public sector undertakings and others.
The meetings have been taking place in the backdrop of army chief
Gen. V.K. Singh alleging that a retired lieutenant general had
offered him a Rs.14 crore bribe to clear an order for 600 military
trucks.
Following the army chief's revelation, Antony ordered a CBI probe
into the bribe offer.
In the wake of the CBI probe, Antony assured the OFB officials at
the review meeting that "honest officers have nothing to fear" and
that they will get the full support of the ministry.
Antony also asked the officials to complete implementation of the
OFB's Rs.15,000-crore modernisation plan for the 12th five-year
plan on time. He also asked them to meet targets on producing
quality products for the armed forces.
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