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 helicopter deal. Defence Minister Manohar Parrikar told the media that that the process for blacklisting Finmeccanica and its subsidiaries was already under way, and the Law Ministry had been sent a note, adding, “Wherever there is capital procurement of Finmeccanica and their subsidiaries, all requests for proposal (RFP) will be closed. I am very clear.” At the same time, he clarified that the firm would continue to conduct annual maintenance and supply spare parts for defence supplies already acquired, and that only fresh capital acquisitions were being cancelled.

Black Shark torpedo

The government has already withdrawn the RFP for heavyweight torpedoes for Socrpene submarines, which was won by Finmeccanica subsidiary WASS during the UPA regime. Significantly, Parrikar emphasised that national security “cannot be compromised” just because the company has done something wrong, further stating: “I cannot put six ships of mine out of commission because one spare part is to be imported from some company of Finmeccanica.” This means that even when Finmeccanica is blacklisted, which is likely soon, the firm is expected to continue annual maintenance and supply of spare parts of previously procured defence supplies – implying the blacklisting will remain ‘partial’.

Depending on what the money involved is what happens if Finmeccanica refuses to undertake annual maintenance and stop supply of spare parts till the partial blacklisting is in vogue despite the contract? Yes, India can take recourse to law but during the litigation period the acquisitions through Finmeccanica may remain unserviceable.

Finmeccanica has acknowledged recent statements by Defence Minister Parrikar but have not received any official communication. The firm has also said that business with India is very marginal, no new orders coming from the country have been included in the firm’s budget forecast and the contract for the supply of torpedoes was never formally signed and therefore never included in Finmeccanica’s backlog. Yet, the firm hopes that an agreed and transparent solution is found as soon as possible failing which, the firm will not refrain from assessing the situation given the limited size of the ongoing business in the country.

A.K. Antony in his decade-long tenure as Defence Minister, was notorious for blackmailing firms at the drop of a hat, though he was not the only one to do so. Even Bansi Lal as Defence Minister stopped the import of state-of-the-art 5.56 assault rifles for the then three commando battalions and three battalions of the Parachute Brigade in the early 1980s on the basis of an anonymous letter alleging bribes, resulting in the IPKF going against the AK-47 equipped LTTE, army forced to import 1,00,000 AK-47 rifles to partly equip units in IPKF and the DRDO taking 15 years to produce the 5.56 INSAS rifle which still has some 11 faults. Where Antony earned the dubious distinction of being equated with V.K. Krishna Menon in bringing the equipping state of the military down to 1962 level was because he blacklisted firms left right and centre, no effort was made to do so to have alternative arrangements in place to make up even the critical voids. Of course Antony’s tenure also saw sudden removal of firms from the blacklist; actions that were never explained obviously because of dubious under the table dealings in the closeted corridors of power.

In the instant case of Finmeccanica, sure ample evidence of bribes has emerged in the AugustaWestland helicopter deal and as indicated by Parrikar while the blacklisting process, if the blacklisting is for specific number of years, it will be mentioned in the blacklisting order. What would be the criteria for arriving the number of years the firm is to remain blacklisted is also unclear unless a lucky dip method is to be adopted or the clever bureaucracy is looking ahead to cut out the firm from future procurements in line with the Long Term Integrated Procurement Plan, to suit someone else.

However, the critical concern in the instant case is scrapping of a Rs. 1,800-crore contract for 98 Black Shark torpedoes from Finmeccanica that has thrown a spanner in the works of a critical strategic project – the construction of four Arihant class ballistic missile submarines (SSBNs). Three of the four SSBNs were meant to be equipped to fire Black Shark heavyweight torpedoes, whose purchase from Finmeccanica subsidiary WASS has been cancelled. This cancellation will mean modifications to the SSBN’s torpedo tubes and delay induction of the second vessel by two to three years. Arihant class SSBNs are the key to our nuclear triad of land, sea and air-launched weapons. Arihant is armed with the Type 53-65 Russian torpedoes and fire control system but Aridaman (second Arihant class submarine) presently in an advanced state of construction and equipped to fire Black Shark torpedoes is due to be inducted by 2018. Without torpedoes, Aridaman cannot defend itself albeit it will be commissioned without them. The Scorpene class submarines under construction are likely to meet the same fate. Not only is the Black Shark considered the best torpedo under present circumstances, going for an alternative implies cost and time delays because the fire control system of submarines under various stages of construction can only fire one type of torpedo – Black Shark in this case.

Has the MoD calculated the costs and time delays to undertake required modifications in the submarines to fire another torpedo? Having emerged as the lowest bidder in 2014, the Navy had pushed the case to buy Black Shark torpedoes citing “urgent operational necessity” which was accepted by the government.

This January, Director General of the classified project dealing with SSBNs wrote to the NSA warning of delays in the Aridaman if the torpedoes did not come on time, requesting option clause for 49 Black Sharks to be exercised to firewall the SSBN project from the bribery controversy.

Defence Minister Parrikar would do well not to blunder into the blacklisting like Bansi Lal and Antony, just to appease the Congress hollering why the firm has not been banned, even as equipping the military was least priority for the Congress. Sure individuals involved in bribes must be acted against but as Defence Minister, it is his responsibility to convince the government to be discreet enough at the time of concluding the steps against the Finmeccanica Group and their affiliates ensuring that there is no major negative effect on the preparedness of our armed forces, especially when the proposed blacklisting will only remain partial as discussed above.

The views expressed herein are the personal views of the author.