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BAE SYSTEMS OPT OUT OF INDIA’S GUN TENDER

BAE SYSTEMS OPT OUT OF INDIA’S BIG TICKET GUN TENDER RAISES SEVERAL QUESTIONS
By Bulbul Singh

05 May 11. BAE Systems took a last minute decision not to take part in the multi-million tender of the Indian Army to procure 155mm/52 calibre towed gun. BAE Systems did not file its bid before the expiry of the date for the tender on April 28th.

BAE Systems decided not to take part in the re-issued tender, (it would have had significant edge with its 77B-5 gun) because the company found that the qualitative requirements in the re-issued tender had been watered down. An executive of BAE Systems said, “With watered down requirements in the tender, the competitive advantage of our gun would have been lost to another vendor. BAE Systems did not want to go through the exercise of fielding its gun for trials at large costs to the company and then find that another vendor has been selected due to lowered down requirements.”

The Indian Army plans to procure a total of 1,580 towed guns, out of which 400 units are to be purchased off-the-shelf and the remaining 1,180units are to be license-produced in India by the Ordnance Factory Board (OFB) using technology transfer.

Another executive of a global defence company said, “BAE Systems’ decision not to field their gun in the big ticket tender shows how global defence companies feel frustrated with the Indian defence procurement system which is often cumbersome, costly and not transparent.”

The current tender is a result of the cancelled tender issued in 2008 in which BAE Systems was the sole bidder, the second short-listed vendor Singapore Technologies, was blacklisted by the Indian government in mid-2008 for alleged involvement in corruption related to the state-owned Ordnance Factory Board.

BAE Systems’ gun was rated technically the best amongst all bidders. Bids were sent to defence companies in France, U.S., Israel and the Czech Republic.

It is however, intriguing why BAE Systems decided not to participate in the current tender.

One anonymous defence analyst said, “India is only waiting until it makes its own 155mm gun at DRDO facilities, thus the tenders will keep derailing on some change or another.”

“The purchase of 155mm/52 calibre guns is already behind planned induction.” said a senior Indian Army official. The Indian Army has requirements for over 2000 155mm guns, as it proposes to change all existing artillery guns to 155mm/52 calibre guns by 2025 spending over $4 billion.

India has not bought a single howitzer gun for over 24 years when it bought 410 Bofors FH 77B howitzers in 1987, which were also clouded in allegations of corruption and came to known as the Bofors scandal in which the former Prime Minister Rajiv Gandhi and late husband of Sonia Gandhi, President of the ruling Congress Party was alleged to have been involved in a payoff scandal. However, no charges have been proved so far but the ‘Bofors Scandal’ caused a political fallout on the Rajiv Gandhi government.

India is on the verge of buying 145 M-777 ULH howitzers. The ULH is being bought from BAE Systems GCS via FMS. BAE Land Systems, from whom Indian army is now buying the light howitzer, is also the current owner of the erstwhile Bofors AB which supplied the 155mm howitzers in 1987.

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