BAE opts out of Indian Army’s towed guns tender

New Delhi, April 28 (IANS) British arms major BAE Systems Thursday opted out of India’s tender for 1,580 towed artillery guns with the deadline for submitting the bids comming to an end, a company official said here.

The tender was issued on January 28 under the Indian Army’s Rs.20,000 crore (Rs.200 billion/$ 444.8 million) artillery guns modernisation programme that has been hit by the taint surrounding the purchase of the Bofors guns 24 years ago.

The firm has the FH-77B05 155-mm 52calibre towed gun among its products that it could have offered, but will now not do so after a detailed assessment of the tender documents, the official said.

BAE Systems, however, is on the verge of signing a Rs.2,900 crore contract for 145 M-777 ultra-light howitzers. This gun is manufactured by the company in the US and the sale will be under the Foreign Military Sales route of the US government.

The tender for the towed guns seems jinxed, with the defence ministry cancelling the March 2008 tender in July 2010 and issuing a fresh request for information after BAE’s competitor Singapore Technologies Kinetics had sought more time for bringing its gun iFH-2000 for the trials in India, citing a single vendor situation emerging due to that development then.

Later, the defence ministry issued a Request for Proposals (RFP) for the gun in January which it did not send to Singapore Technologies Kinetics. The firm had, in 2008, found itself in a quandary after it was named in a corruption case against former Ordnance Factory Board chief Sudipto Ghosh by the Central Bureau of Investigation.

‘While we are certain that the FH-77B05 is the most capable 52calibre towed gun available, and it was specifically designed for and demonstrated to meet the Indian Army’s requirements as stated in previous RFPs, BAE Systems has, after very careful consideration, come to the conclusion that the company will not submit a proposal. The Ministry of Defence has been informed,’ Guy Douglas, head of communications strategic markets for BAE Systems told IANS.

The conclusion was reached following a detailed assessment of the new RFP, Douglas said.

‘We found that the new RFP includes technical and performance relaxations that allow less capable weapon systems to enter the competition. This significantly reduces the competitive advantage FH-77B05 derives from its greater capability,’ Douglas said, giving reasons for their decision to opt out of the race.

The FH-77B05 was optimised for the more taxing requirements of the previous RFPs, he said. ‘Therefore, the decision not to bid is a commercial one based on the high investment costs required to participate in a complex artillery competition of this nature, where the win probability has been reduced,’ he added.

However, on behalf of his company, Douglas made it clear that ‘the company’s commitment to India and the development of India’s domestic defence industry remains resolute.’

He said BAE Systems and Defence Land Systems India, its artillery partner through a joint venture with Mahindra and Mahindra, were ‘acutely aware’ of India’s requirement to upgrade its artillery capabilities and therefore ‘remain willing to fully assist’ the defence ministry and army achieve this aim.

Under the present tender for 1,580 guns, 400 units are to be purchased off-the-shelf and the rest 1,180 units are to be license-produced in India by the Ordnance Factory Board (OFB) after transfer of technology.

India had also sent the Jan 2011 tender documents to gun manufacturers in France, the US, Israel and the Czech Republic. The information on their responses to the tender is not known.