India bans Finmeccanica from bidding contracts after graft allegations

NEW DELHI: India today barred scam-tainted Italian defence firm Finmeccannica from participating in future tenders while deciding to carry out ongoing contracts with the group and its subsidiary AgustaWestland, more than a month after putting all deals on hold.

The Defence Ministry issued an order on how to go about dealing with Finmeccannica and its subsidiaries in the backdrop of allegations of payment of kickbacks to the tune of Rs 360 crore in the Rs 3600 crore VVIP chopper deal which is under investigation.

Defence Ministry officials clarified that this partial lifting of ban on Finmeccannica would not apply to AgustaWestland's Rs 3,600 crore contract to supply 12 VVIP choppers to the Air Force as it has already been scrapped.

Over a month back, the Defence Ministry had put on hold all the deals estimated to be worth over Rs 30,000 crore with Finmeccannica and its subsidiaries in view of the CBI probe against the firm.

Subsequently, the new government had sought an opinion from the Attorney General Mukul Rohatgi, who opined that blacklisting of Finmeccanica would adversely affect the operational preparedness of the armed forces.

The Ministry today decided to continue the ban on tenders where the firm has been declared as the lowest bidder. It also decided to keep it out from tenders which are to be issued in future, Ministry officials said.

The Ministry has also ruled that the company would not be considered for award of contracts in tenders where other vendors are also participating.

At the same time, the Ministry provided relief to the firm as it allowed the armed forces to go ahead with the contracts that are already under execution as "there is no reason to proceed with the contracts."