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CVC orders probe into navy contracts

CVC orders probe into navy contracts
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First Published: Tue, Jul 10 2007. 01 33 AM IST
Updated: Tue, Jul 10 2007. 01 33 AM IST
New Delhi: The Central Vigilance Commission (CVC) has asked the defence ministry to investigate a decision by the Indian Navy to award a contract to a Norwegian marine equipment supplier without floating an open tender.
“They (the ministry) have assured necessary inquiry,” said a senior CVC official who did not wish to be identified.
As part of the same effort, the CVC has, in addition, put out a circular that stipulates that all public sector undertakings need to advertise contracts awarded on nomination basis on their websites.
“We have noticed a trend wherein shipyards are being told by the navy as to who they should take supplies from. This is not correct,” says the vigilance officer.
The CVC asked for the navy investigation in response to a Mint article on 13 June.
Kongsberg Maritime AS, a Norwegian marine equipment supplier that is a wholly owned subsidiary of Kongsberg Gruppen, has in the last one year alone won three contracts worth Rs350 crore from the Indian Navy. It is not the sum, which is small by defence contracts standards, but the process of awarding the contracts without floating tenders that has triggered concerns about the navy’s practices.
Mint emailed a questionnaire to naval headquarters several times in the last fortnight seeking to know the details of the contracts awarded to Kongsberg Maritime but did not get any response.
Kongsberg Maritime, through an email, would only say that the company had no comments to make on the matter and that “all inquiries must be directed to our customer.”
Mint’s story had disclosed that the company was nominated for supply of Autonomous Underwater Vehicles (AUVs), worth around Rs260 crore, which were to be fitted onto six new survey vessels of the navy. AUVs are underwater robots that are used to map the seabed.
The National Hydrographic Office (NHO), the survey arm of the navy and the authority that awards the contracts, appears to have overlooked the basic norm of giving other companies a chance to compete in a tender before awarding the contract to Kongsberg. Two vendors, Hydroid Europe, an arm of the US-based Hydroid Llc. and Bluefin Robotics Corp., which is associated with the Massachusetts Institute of Technology, have written to the defence ministry seeking to know why they had not been considered for the contract.
Since then, it has emerged that Kongsberg Maritime was also awarded contracts for supply of other equipment, such as remote-operated vehicles and multibeam echo sounders, which use acoustic signals to map the seabed, taking the value of the contracts awarded to the company to around Rs350 crore.
Remote-operated vehicles are tethered underwater robots used for deep-sea surveys and multibeam echo sounders can help gauge the depth of the seabed, among other surveys, by measuring the time it takes for a pulse of sound to travel to the ocean floor and back.
One industry executive who is privy to the Kongsberg Maritime contract and who did not wish to be identified maintains that Alcock Ashdown (Gujarat) Ltd, a shipbuilder owned by the Gujarat state government, could have sourced the components at half the price. “Again, none of the other vendors were called to even put up their products for field trials,” says this person.
Mint couldn’t ascertain independently whether Alcock Ashdown could produce similar components and vehicles that Kongsberg Maritime has been asked to supply to the navy.
All three supply contracts were awarded to Kongsberg Maritime under the tenure of current NHO head Rear Admiral B.R. Rao.
People close to the NHO also claimed that Rao had recommended equipment supplied by Simrad, a part of Kongsberg Maritime, in 1992 for Goa Shipyard Ltd, which was building two survey vessels for the navy. A defence ministry committee, which had reviewed that decision, overturned the recommendation and called for open bidding and the contract eventually went to another bidder.
Mint also sent written questions about that contract to the naval headquarters but drew no response. Attempts to talk to Rear Admiral Rao were unsuccessful as a Mint reporter was told he was unavailable for comment.
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First Published: Tue, Jul 10 2007. 01 33 AM IST
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