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New blacklisting policy: No blanket ban on firms indulging in corruption

November 07, 2016 22:00 IST

The defence ministry on Monday cleared a new blacklisting policy that will do away with blanket bans on companies indulging in corrupt acts and approved projects worth over Rs 82,000 crore for purchase of fighter aircraft, tanks, rockets and mini drones.

Contrary to expectation, the Defence Acquisition Council, chaired by Defence Minister Manohar Parrikar, did not take a decision on the Navy’s proposal to purchase 12 US2I amphibious aircraft from Japan, though the issue came up for discussion.

However, it is expected that there would be some forward movement on this issue during Prime Minister Narendra Modi’s upcoming visit to Tokyo on November 11-12.

The DAC also gave Acceptance of Necessity to Indian Air Force’s plan to purchase 83 Tejas Mark 1A aircraft at a cost of Rs 50,025 crore, Defence Ministry sources said.

It also accorded AoN for the purchase of 15 Light Combat Aircraft being manufactured by Hindustan Aeronautics Limited for the Army and Air Force for a tentative cost of about Rs 2,911 crore.

AoN was also given for the repeat order of 464 Russian origin T90 tanks which are being manufactured by the Ordnance Factory Board for Rs 13,448 crore, besides for procurement of 598 mini UAVs at a cost of Rs 1,100 crore.

However, the most significant take away from the DAC is the clearance of the new blacklisting policy.

Though defence ministry officials remained tight-lipped about the features of the new policy maintaining it will be put up on website in the next few days, sources said it will ensure that while companies are dealt with harshly, it will not affect the modernisation process.

As per the new policy, the focus is on graded blacklisting and fines. This means that if a defence conglomerate is caught doing wrong in a particular project, it will be banned for a specific number of years from dealing in that particular segment only.

It can continue to pitch for projects in other segments.

“It will be a product specific ban rather than blanket blacklisting. Also, there will be an option for heavy penalties besides those in contract and even individuals can be banned,” a source said.

The new policy would also allow many of the stuck programmes, like the heavy weight torpedos for the six Scorpene submarines, to move ahead with clarity.

Image for representation only.

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