By IANS
New Delhi : The government is taking steps to prevent cartelisation of ordinance factories’ suppliers, who had garnered orders worth Rs.4.72 billion last year, parliament was informed Wednesday.
“Measures to break cartel formation are reviewed and fine-tuned on regular basis,” Minister of State for Defence Production Rao Inderjit Singh said in a written reply in the Rajya Sabha.
The comptroller and auditor general had remarked adversely on the cartelisation in its report tabled in parliament in August, saying suppliers to 11 ordinance factories had quoted identical rates in 117 cases.
According to Singh, measures to break cartel formation were formulated by a committee in consultation with corruption watchdog Central Vigilance Commission (CVC) in July.
“The tender conditions as per the guidelines were modified by incorporating appropriate clauses (to prevent cartelisation),” he stated.
“Before completion of the procurement contracts, the reasonableness of the price is assessed (by) co-relating with the prices prevailing in the market, the wholesale price index and the last rate paid,” Singh added.
In reply to another question, Defence Minister A.K. Antony said 73 letters of intent/industrial licenses had been issued to various private sector companies for manufacturing a wide range of military products.
“Various steps have been taken during the last three years to encourage Indian industries to participate in defence production,” the minister said in a written reply.
These include measures to enable the private sector benefit from the offsets clause in big-ticket defence deals, maintenance of equipment procured from abroad and the provision of a level playing field, he added.
Issues like shared development cost and a minimum order level have also been addressed in the manufacturing procedure laid down in the Defence Procurement Procedure enunciated in 2006, Antony said.
Till 2001, only the eight defence public sector undertakings and 39 ordinance factories could produce military hardware and related items. In May of that year, the defence industry sector was opened up for 100 percent private sector participation, subject to licensing.