Agusta Scam: All defence contracts by Finmeccanica to be cancelled

The government has decided to cancel all ongoing tenders for defence equipment won by Italy's Finmeccanica as a precursor to blacklisting of the firm which is being investigated for bribery in the AgustaWestland VVIP chopper deal.

This was disclosed by Defence Minister Manohar Parrikar, who in an interview to PTI also said that the process for blacklisting Finmeccanica and its subsidiaries has already been started and a note for the same sent to the Law Ministry.

"Wherever there is capital procurement of Finmeccanica and their subsidiaries, all Requests for Proposal (RFP) will be closed. I am very clear," he said.

However, he said, the annual maintenance and import of spare parts of already acquired defence supplies will be continued with the firm and only fresh capital acquisition are being nixed.

The government has already withdrawn the RFP for heavyweight torpedoes for Scorpene submarines which were won by WASS, a Finmeccanica subsidiary, during UPA regime. The government is now working out the alternatives.

"The blacklisting process has already been moved. If there is a blacklisting for a specific number of years, which will be issued in the order, there will be no transaction by Defence Ministry with that company for capital procurement for that many years," he said.

He stressed that the Ministry has already put on hold new transactions with the company.

"In revenue acquisition, where contracts have already been executed, annual maintenance and import of spare parts will be permitted where it is absolutely essential but with proper certification from concerned authority in order to ensure that platform or equipment remains operational," he said.

Emphasising that national security "cannot be compromised" just because the company has done something wrong, he said, "I cannot put six ships of mine out of commission because one spare part is to be imported from some company of Finmeccanica."

Asked what will happen to projects in which Finmeccanica would play a crucial role in the supply of equipment, Parrikar said, "Is there only one product in the whole world? There will always be products by Russian companies, American companies or some others. Maybe slightly costlier and difficult to get".