Not scared of Finmeccanica’s threat on reconsidering projects: Govt

“If you have any queries on this, the Defence Ministry, in an appropriate manner, will respond to it. But let me say one thing as a spokesperson of the Union Cabinet that our government does not get scared of any threat,” said Union Minister Ravi Shankar Prasad.

He was responding to a question on Italy’s Finmeccanica’s, tainted in the alleged VVIP helicopter scam, warning of reassessing its ongoing projects of supplying components and essential services if an “agreed and transparent solution” was not found in the backdrop of on-going blacklisting process.

“If Finmeccanica has some issues, it should write directly to the Defence Ministry (instead of making public statements). The matter will then be looked into,” said top Defence Ministry sources, in a terse message to the Italian arms conglomerate.

Leonardo-Finmeccanica, in a statement on Tuesday, had said, “The company hopes that an agreed and transparent solution is found as soon as possible to shed light on current initiatives and future business opportunities.”

“Should this not be the case, the company will not refrain from assessing the situation given the limited size of its ongoing business in the country (India),” it added.

This came after the Defence Ministry had initiated the process to formally blacklist Finmeccanica and its subsidiaries like the UK-based AgustaWestland, which are embroiled in the VVIP helicopter scam, by writing to the Law Ministry.

Defence Minister Manohar Parrikar had said that the government had decided to cancel all ongoing tenders for defence equipment won by Finmeccanica as a precursor to blacklisting of the firm, which is being investigated for bribery in the AgustaWestland VVIP helicopter deal.

Parrikar had said that only fresh capital acquisition was being cancelled and the firm would continue to conduct annual maintenance and supply spare parts for defence supplies already acquired.

The ministry has since August 2014 imposed a “partial ban” on Finmeccanica, under which all new deals are proscribed but contracts under execution, supply of spares and maintenance deals are being allowed to continue unhindered.

Under the graded ban, all procurement projects, where acquisitions from Finmeccanica had been selected but the actual contracts had not been inked were also put on hold. But the government is now going to scrap all pending proposals, with the first being last month’s cancellation of the Rs 1,200-crore proposal to buy the Black Shark heavy-weight torpedoes from a Finmeccanica subsidiary for the six Scorpene submarines under construction at MDL.

Similarly, the projects to acquire 127mm Otomelara medium-range super-fire guns for warships, Selex radars, torpedo-decoy systems, short-range surface-to-air missiles and the like from Finmeccanica and its subsidiaries are now being scrapped.