NEW DELHI, July 22 (UPI) -- India's defense ministry has delayed again the purchase of towed heavy artillery guns worth more than $2.5 billion in the wake of a corruption scandal.
The move further disrupts the decade-long procurement process for more than 1,500 guns to replace the army's aging Bofors units, some around 20 years old.
The defense ministry acted on recommendations from the Central Bureau of Investigation earlier this month that the military blacklist firms that are allegedly involved in corruption cases.
"The towed-gun trials that were to happen this month will not happen immediately," a defense official said. "It could take a few more months."
It is the third postponement of the trials for the long-range guns since 2002.
The CBI wrote to the defense ministry to recommend blacklisting of foreign firms Singapore Technologies Kinetics, Israel Military Industries, Zurich's Rheinmetall Air Defense and Russian Cooperation Defense. Also recommended for blacklisting are two Indian firms, T. S. Kisan and Company and R. K. Machines Tools.
No charges have been laid against any firm after 18 months of investigations.
But in May 2009 the anti-corruption wing of the CBI arrested the retired former director general of the Ordnance Factory Board, Sudipta Ghosh, following a raid at his home in Bidhannagar, a modern planned community for wealthy people near Kolkata, formerly Calcutta.
Also arrested was his aide, Kanailal Das.
Ghosh, who retired from the OFB the previous month, is accused of taking bribes from various suppliers including Singapore Technologies Kinetics, with Das allegedly playing the role of middleman.
STK was competing against the United Kingdom's BAE Systems to deliver 400 155mm .52-caliber towed artillery guns, as well as indigenously manufactured 1,180 howitzers through a transfer-of-technology contract.
The deal is part of a major planned contract that includes 814 mounted gun systems, 180 self-propelled wheeled guns and 100 tracked guns.
There are fears that the entire tender process might be scrapped and restarted, said Brig. Khutab Hai, chief executive officer of the Mahindra Group's Defense Land Systems India, which will manufacture around 55 percent of the BAE Systems FH-77B-05 howitzer if it wins the contract.
"If STK is blacklisted, I apprehend that the MoD might entirely scrap the tender for towed howitzers, on the grounds that there is now just a single vendor," he said.
"But, remember, three companies had bid in this tender, Rheinmetall, STK and BAE Systems. Even if the other two are eliminated for various reasons, this was never a single-vendor situation."
Rheinmetall was dropped from the list when Indian procurement authorities realized it was working with banned South African company Denel.
The selection of a suitable 155mm, .52-caliber towed howitzer began in 2002 when the defense ministry began evaluations of guns from BAE Systems, Israeli firm Soltam and Denel.
Trials were conducted up to 2006 but were inconclusive. Also, in September 2005 Denel had been blacklisted for alleged corruption.
The current tender was launched in 2008.
The two guns currently in the running -- STK's Indian Field Howitzer-2000 and the BAE Systems FH-77-05 -- reportedly are lying idle at the Pokhran Field Firing Ranges in the desert state of Rajasthan, awaiting further notification from the ministry of defense.