Monday, April 16, 2012

Integrity Pact invoked against Israeli defence firm

Woes of Israeli Munition Industries (IMI) that has been banned from doing any business with India for the next ten years are yet to end. The Defence Ministry has for the first time invoked the Integrity Pact against a foreign firm for indulging in corrupt practices and encashed the bank guarantee of Rs 224 crore given by the firm. 
The Defence Ministry had signed the contract with IMI in 2009 to set up ordnance factory in Nalanda to manufacture ammunition for Bofors gun.

Update- Defence Minister AK Antony also reviewed performance of the Ordnance Factory Board (OFB) today. The Ministry has approved to provide an impetus of Rs. 15,000 crore to the OFB in the 12th Long Term Integrated Perspective Planning. 

Moreover, the Ministry says that the stalling of Nalanda factory following blacklisting of IMI will not be affect the Indian Army's ammunition acquisition as OFB in partnership with Defence Research and Development Organisation have succeeded in developing a bi-modular charge system indigenously. The system is presently under trial and will be given to the Indian Army for user trials SOON.

The ammunition manufacturing plant will be set up by OFB and cost will be half of the originally envisaged factory in Nalanda. 

It remains to be seen whether the home-built ammunition will pass the trials. As earlier the Army had rejected the OFB developed ammunition for its tanks. Also the time frame for the production of these ammunition remains ambiguous and the force can face artillery ammunition crunch (similar to the tank ammunition shortage it is facing now).

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