The ministry has also written to the Central Bureau of Investigation (CBI) for further evidence in the case.

"Advice has been sought from the CVC and the law ministry on the further action to be taken in the case and future dealings with the firm," a defence official said, requesting anonymity.

"The ministry has written to the CBI seeking details of the case and the role of the blacklisted firms," he added.

Dealings with the seven companies were "temporarily put on hold" June 5 after their names surfaced in a CBI case against the retired chairman of the Ordnance Factory Board, Sudipta Ghosh.

The defence ministry's latest move is being seen as a fallout of the adverse impact of the blacklisting on the modernisation drive of the Indian armed forces because finding alternative suppliers to critical weaponry like artillery guns has been proving difficult.

"The decision is to put transactions on hold till further orders. We are assessing what is to be done. The order will be reviewed as and when the CBI provides evidence," the official added.

The immediate casualty of the blacklisting is the Rs.12 billion ($240 million) deal between IMI and the Indian Ordnance Factory Board (OFB) March 25 to revive a munitions factory at Nalanda in Bihar along the lines of IMI's ordnance factory in the Tel Aviv suburb of Ramat Hasharon, a project that had taken off after 10 long years.

"The blacklisting has once again put a question mark on the fate of the factory, which was to be the 40th ordnance factory in the country," another defence official told IANS, requesting anonymity.

Originally conceived in the late 1990s when George Fernandes was the defence minister, the Nalanda factory project went into limbo when South African defence major Denel, that was to collaborate in its construction, was blacklisted on corruption charges. The factory was to manufacture the propellant for the ammunition of the Bofors 155 mm howitzers and also Zitara carbines in collaboration with another Indian ordnance factory.

The Israeli firm had also been supplying Uzi and Tavor submachine guns to the Indian security forces and post the 26/11 Mumbai terror attacks, further orders had been placed for the guns.

IMI had also undertaken a project to manufacture a variation of cluster bombs in a joint venture with the ordnance factory at Khamaria in Madhya Pradesh.

The Israeli firm was also advising the Defence Research and Development Organisation (DRDO) on the development of the indigenous Arjun main battle tank for the Indian Army.

Besides IMI, the blacklisting of Singapore Technology is likely to derail the artillery modernisation programme of the Indian Army that has been hanging fire for over two decades and has been mired in controversy.

Singapore Technology's Pegasus ultra-light howitzer was a leading contender for the Indian Army's order for 140 guns worth Rs.29 billion.

The other blacklisted companies are BVT Poland and Media Architects Pvt. Ltd of Singapore and three Indian companies: T.S. Kishan and Co. Pvt. Ltd., R.K. Machine Tools and HYT Engineering Co.

The CBI had registered a case against the former OFB director general Sudipto Ghosh in Kolkata on May 17 under the Prevention of Corruption Act. The seven companies were mentioned in the First Information Report.

(IANS)

Comment

comments...

Issue of Nalanda Ordnance Factory is sensitive as it pertains to defence hence it should not be considered in context of discrimination. Because of getting contractor
blacklisted progress of work must have got effected but it will not make sense to completely cancel this project. Fear of conspirancy against Bihar to slow down the speed of progress can not be ruled out and Nalanda Ordnance Factory may be victim of it. It is not only unfortunate of NOF but Nalanda as whole which had not got proper place in development process comparing to other districts although it was famous for spreading education across world. Nitish Kumar and George Furnandes both had represented this constituency but being railway minister Nitish kumar could have done something for Nalanda just as Lalu Yadav had contributed to madhepora and chapra but he preferred his home, his old constituency. George Furnandes had at least contributed to Nalanda in large way what he could have done as Defense minister now it is the responsibility of present MP of Nalanda being sitting as opposition he can fight for preserve it if not in position to get more.

Farooque

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Please refer to the news that the work of the Nalanda factory is being postponed for one reason or the other published in the Bihar News dt 7th june 09. This is really very shocking specially when it is associated with a great internationally known place of Nalanda.

It appears that the central govt is specially interested in sidelining everything related to the state of Bihar for reasons not known. They have forgotten that whatever glory the country India has got in the world is due to the Magadh Empire whose illustrious son Chandragupta defeated all , even the most powerful army of Alexander the great. There is another glory associated with this region . Emperors of this unque place Magadh has always won in any battlefield and was never defeated.

Nalanda always deserves place of pride in india and therefore the factory of Nalanda must be opened immediately.
Why Bihar was not considered for opening Defence factories in the past when this state has produced most of the illustrious fighters ?It is itself a shameful matter.
If any person could have thought respecting glory of his country,it could have been most appropriote to honour the past Magadh state and establish the capital of india at Patna--the great place --Patliputra.However it is ridiculous that this country is taking ten years to open a small ordinance factory in this region----a matter of great shame!

Dhirendra Singh