Ban list: Defence minister Manohar Parrikar to review Vectra case

NEW DELHI: Manohar Parrikar has made his opinion against random blacklisting of defence companies that complicate modernisation of the forces, but he will now have to walk the talk on a specific case involving a group against which restrictions had been put in place but has since been cleared of charges by investigative agencies.

The minister, who has repeatedly spoken against the ‘blacklisting culture’ of the last government, is set to take a call on whether a banned company against which investigations have now ceased and been discarded should be awarded a new contract by the armed forces.



Sources say that Parrikar, who has also promised to put in place a new policy that would legalise and regulate middlemen or consultants in the defence business, has to shortly take a decision on an Army contract that involves the Ravi Rishi owned Vectra group. The minister is likely to take the opinion on the matter of his key advisors at an apex level meeting on modernisation on Saturday.

While the contract itself is small – valued at around Rs 25 crore for a set of 195 truck mounted lifting device (TMLD) – the key question is whether Vectra, which has emerged as the key contender, should be allowed to take further part in negotiations. Dealings with the group had been restricted since 2012 when defence minister AK Antony referred a case involving the company to the Central Bureau of Investigation. It was General VK Singh – now MoS in the External Affairs Ministry – who lodged a complaint with Antony alleging that retired Lt Gen Tejinder Singh had tried to offer him a bribe. The allegations had queered the pitch for the UPA government facing several other allegations of scams.

However, after a two year probe, CBI closed the case in July 2014, citing that there was no evidence to support charges on discrepancies in the supply of 7,000 Tatra trucks to the Army by BEML since 1986. But even after the closure, restrictions have remained on dealings with Vectra and Tatra.

In December, Parrikar partially lifted the ban on Tatra, allowing it to supply parts to the Indian army through BEML provided that the dealings were done directly with the Czech company and not through ‘questionable individuals’.

The decision to restart supplies was taken after nearly 750 trucks, some of which are used to carry strategic systems, went off the road due to a lack of spares. The Vectra contract that is set to come up for discussions soon is a TMLD system that is used to load and remove missiles and armament from mobile firing platforms.

A series of crippling restrictions on dealings with foreign companies in the past few years have severely affected modernisation of the forces. Major firms that remain on the restricted list are Italy based Finmeccanica that has been banned because one of its subsidiaries – AgustaWestland – is under investigation.

Another major supplier of the armed forces, Rheinmetall that has dozens of sub companies, is banned as its subsidiary on Air Defence systems is undergoing a probe.

The thought process in the new government is to lift such blanket bans and be more targeted in punishing individuals or companies accused of indulging in corrupt practices.

While the details will emerge in a new defence procurement policy that is set to come up soon, it is expected that norms will be set in to minimise the barring of companies.