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India may sue Polish firm over armored recovery vehicle contract

June 16, 2017 (Photo Credit: Raveendran/AFP via Getty Images)
NEW DELHI — The Indian government may file a lawsuit against Polski Holding Obronny of Poland, formerly known as Bumar, for allegedly not honoring a contract to supply full technology transfer for key systems of armored recovery vehicles, or ARV, to be manufactured in India by state-owned Bharat Earth Movers Limited for the Indian Army.

“Despite an undersigned contract [worth] $275 million signed in January 2012 for supply of 204 ARVs, the Polish company has ... not given critical technology transfer for ARVs to be manufactured by BEML in India. The Polish company also refused to open performance bank guarantee of $100 million for technology transfer of critical systems for ARVs, and despite several reminders, PHO has refused to honor its commitment," according to an Indian Ministry of Defence official, who spoke to Defense News on condition of anonymity.

“India is now actively pursuing to file a lawsuit again PHO for not honoring [its] commitment, and [the Indian] government will now recover liquidity damages,” the MoD source added.

BEML bagged an order from the MoD in November 2011 to produce 204 ARVs with full technology transfer from PHO for the Indian Army’s Russian-made T-72 main battle tanks.

Under the contract, 50 percent of the ARV was to be homemade by BEML, and PHO was to provide full critical technology transfer to crucial subsystems, according to a BEML executive, who spoke on condition of anonymity. “We are now actively seeking other alternatives to complete this program”.

Per the contract, each ARV would cost $1.4 million and be supplied within three years. The currently Army faces an acute shortages of ARVs, an Army official said.

PHO, then Bumar, and BEML entered into an agreement in 2003 and have since been producing ARVs for the Indian Army. The November 2011 contract was a repeat order.

The MoD did not float a global tender for ARVs, but rather nominated BEML and Bumar for the program since it was a repeat order, the MoD source said.

The Army uses ARVs for recovery and repair of broken-down T-72 tanks and BMP-1 and -2 infantry combat vehicles.

BEML-built ARVs are based on Russian-made T-72 tank hulls, armed with a 12.7mm machine gun and equipped with a crane able to lift up to 15 tons.
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