NEW DELHI — Italian company Oto Melara will not be permitted to participate has been debarred from participating in the Indian Navy's in a $400 million global tender issued recently by the Indian Navy to buy for 110 numbers of 30mm naval guns, because of an ongoing probe into Finmeccanica of Italy-the mother company, into alleged charges of corruption against its parent company, Finmeccanica, a source in the Ministry of Defence (MoD) said.

The tender issued under the "Buy and Make" category has been sent to Israeli companies Rafael and Elbit of Israel, South Korea's Samsung Techwin of South Korea, and British companies BAE Systems and EM Digital of United Kingdom.

An Indian Navy official said, "Since it was competitive bidding, Oto Melara could not have been allowed as per government policy," a Navy official said.

Prime Minister Narendra Modi's government said after coming to power in May 2014, said it would do no further decided not to do fresh defencse business with Finmeccanica and its sister companies pending a final opinion by India's Llegal Aauthorities in the case against the Italian group. , following the alleged involvement of Finmeccanica's AgustaWestland stands charged with in corruption charges in connection with India's purchase of VVIP helicopters worth $640 million in 2010, an MoD official said., and a probe by India's chief investigation agency, Central Bureau of Investigation (CBI) is ongoing still probing the alleged charges and no legal opinion has been received by the Legal authorities by MoD, the official added.


The Indian probe continues despite the fact that the Italian investigation that prompted it ended in the aquittal at trial of then AgustaWestland's then-CEO Giuseppe Orsi, who later became Finmeccanica's CEO, on corruption charges.


The Indian decision put on hold a long-pending deal worth $300 million for the purchase of 98 Black Shark heavy-weight torpedoes, manufactured by Finmeccanica's Whitehead Alenia Sistemi Subacquei (WASS) and urgently required for the six French-designed Scorpene submarines being built for the Indian Navy at state-owned Mazagon Docks in Mumbai.


"When various companies are able to offer a product to India, Finmeccanica companies are currently excluded from bidding," an Italian source said. "But if only two companies can offer a product, one of which is a Finmeccanica company, then it is admitted for the sake of competition. For smaller-calibrer cannons there are numerous contenders."


The latest naval gun tender for the purchase of 30mm naval guns was earlier issued in March 2013 but no overseas vendor participated because there was a condition of transfer of technology of gun barrel gun technology to state-owned Bharat Heavy Electronics Ltd. (BHEL), which will finally license produce the guns under license, the Indian Navy official said.

"The condition for transfer of technology of the gun barrel has been removed in the latest tender issued last week and we expect a good response from overseas companies now," the Navy official added.

Another Navy official (second one ) said, they would have preferred participation of Oto Melara's participation would have been preferred because India is already using 76mm naval guns being license-produced by BHEL under license from Oto Melara the Italian company, and Oto Melara's adding that the gun technology of the Italian company's gun technology is "superior."

Delay in acquiring the 30mm naval guns has led to "fFrequent overhauls of existing Oto Melara guns," said Shyam Kumar Singh, a retired Indian Navy captain.

The Indian Navy has in its inventory 76mm naval guns made by Oto Melara license produced by state owned Bharat Heavy Electricals Limited (BHEL), in addition to the Russian guns.

The Indian Navy needs the 30mm naval guns for over seven years, the Indian Navy official [second one] added.

The Navy Giving details of the requirement, the second an Indian Navy official [second one ] said, the Indian Navy plans to purchase 110 numbers of 30mm naval surface guns with electro-optical fire control systems (EOFCS) along with the ammunition. The technology transfer will be done in favour of Haridwar-based facility of BHEL, Chennai-based facility of state-owned Bharat Electronics Limited (BEL) facility will get technology for the integration of the gun system. The ammunition will be license-produced by India's state-owned Ordnance Factory Board for the ammunition.

"Defence Minister Manohar Parrikar has announced on several occasions that a new dDefencse Pprocurement Ppolicy [DPP], which could include policy changes in the blacklisting of overseas companies, will be announced," defense analyst Nitin Mehta said. "However, the new DPP of the new government is still awaited." said Nitin Mehta New Delhi based defence analyst.


Tom Kington contributed to this story from Rome. Email:

Vivek Raghuvanshi is the India correspondent for Defense News.

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