Israeli firm’s blacklisting impacts Indian armed forces’ modernisation

June 10th, 2009 - 3:15 pm ICT by IANS  

New Delhi, June 10 (IANS) The blacklisting of an Israeli armaments’ firm and six other companies on corruption charges will adversely impact the modernisation drive of the Indian armed forces as finding alternative suppliers could prove difficult, officials say.
All dealings with Israeli Military Industries (IMI) were “temporarily put on hold” June 5 after its name surfaced in a Central Bureau of Investigation (CBI) case against the retired chairman of the Ordnance Factory Board Sudipta Ghosh.

“The decision is to put transactions on hold till further orders. We are assessing what is to be done. The order will be reviewed as and when the CBI provides evidence,” a defence official said.

The immediate casualty of the blacklisting is the Rs.12 billion ($240 million) deal between IMI and the Indian Ordnance Factory Board (OFB) March 25 to revive a munitions factory at Nalanda in Bihar along the lines of IMI’s ordnance factory in the Tel Aviv suburb of Ramat Hasharon, a project that had taken off after 10 long years.

“The blacklisting has once again put a question mark on the fate of the factory, which was to be the 40th ordnance factory in the country,” another defence official said, requesting anonymity.

Originally conceived in the late 1990s when George Fernandes was the defence minister, the Nalanda factory went into limbo when South African defence major Denel that was to collaborate in its construction was blacklisted on corruption charges. The factory was to manufacture the propellant for the ammunition of the Bofors 155 mm howitzers and also Zitara carbines in collaboration with another Indian ordnance factory.

The Israeli firm had also been supplying Uzi and Tavor submachine guns to the Indian security forces and post- the 26/11 Mumbai terror attacks, further orders had been placed for the guns.

IMI had also undertaken a project to manufacture a variation of cluster bombs in a joint venture with the ordnance factory at Khamaria in Madhya Pradesh.

The Israeli firm was also advising the Defence Research and Development Organisation (DRDO) on the development of the indigenous Arjun main battle tank for the Indian Army.

The Ordnance Factory Board was also working on an IMI proposal to jointly develop a bomb capable of penetrating two-metre-thick concrete.

IMI apart, the blacklisting of Singapore Technology is likely to derail the artillery modernisation programme of the Indian Army that has been hanging fire for over two decades and has been mired in controversy.

Singapore Technology’s Pegasus ultra-light howitzer was a leading contender for the Indian Army’s order for 140 guns worth Rs.29 billion.

“The Pegasus guns were to be field-tested this summer in Rajasthan. The blacklisting would definitely derail the whole programme,” an army official said.

The other blacklisted companies are BVT Poland and Media Architects Pvt. Ltd of Singapore and three Indian companies: T.S. Kishan and Co. Pvt. Ltd., R.K. Machine Tools and HYT Engineering Co.

The CBI had registered a case against the former OFB director general Sudipto Ghosh in Kolkata May 17 under the Prevention of Corruption Act. The seven companies were mentioned in the FIR.

Although no chargesheet has yet been filed by the CBI, the defence ministry “put on hold” all the dealings with the firm till further orders.

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