Finmeccanica on the verge of being blacklisted; defence ministry expedites action

NEW DELHI: Finmeccanica, the Italian defence group which is on the verge of getting blacklisted, has several military systems in service in India. Several of its contracts in the pipeline have been stuck for years.

The defence ministry has accelerated the process to take action against the group, following the recent conviction of its former executives in Italy over corruption in a helicopter deal with India.But the government has clarified that the group’s ongoing projects will not be affected by the step.

The Finmeccanica group has supplied systems ranging from radars and guns for the Navy and is a prime contender for a $1-billion contract for a new range of Navy choppers. In the current form, blacklisting of Finmeccanica could affect work of its subsidiaries — Selex, Alenia and OtoMelara.

Selex, for example, is supplying the 3D L Band Air Surveillance Radar (RAN-40L) that will be installed onboard aircraft carrier INS Vikrant, being built in Kochi. OtoMelara is the main supplier of naval guns for warships of the Indian Navy and Coast Guard. It had a tieup with the government-owned Bharat Heavy Electricals for producing 76mm and 127mm Navy guns.

Alenia, which at one point was a leading competitor for a deal to replace the IAF’s Avro fleet, has fallen out of the race. The Navy’s new Scorpene submarines may have to do without a new torpedo as Finmeccanica subsidiary WASS was selected for the contract but there has been little progress on the deal.

Selex supplies communication and radars to Hindustan Aeronautics that are used on Navy and Air Force choppers. AgustaWestland, the British unit of the company that is at the centre of the scandal, was hopeful of a comeback into the Indian market for the Navy’s tender for utility helicopters.

It was even in talks with several Indian companies for a possible tieup. The defence ministry has made it clear that it will determinedly pursue the case against AgustaWestland. In its first official comment, the ministry said “publicly available information” on the case “clearly shows that the core issue in the matter is corruption”.