According to our sources, the Ordnance Factories Board, an arms & ammunition production division of the Ministry of Defence, ensured that only two companies bid for the plant
Bofors and controversy go hand-in-hand. DNA has learned that the tender process for a crucial ammunition plant for the Bofors gun was allegedly rigged.
According to our sources, the Ordnance Factories Board (OFB), an arms & ammunition production division of the Ministry of Defence, ensured that only two companies bid for the plant. Both these plants belong to the same parent company in Germany.
The tender for the ammunition plant at Ordnance Factory Nalanda (OFN) opened on March 20 2018. The two companies that sent their bids were Bowas Induplan Chemie of Austria and Dott Mariano Pravisani & C. s.r.l (DMP) of Italy. DNA found out that Bohlen Industrie GMBH, a holding company registered in Germany, holds a 100 per cent stake in Bowas and a 66.67 per cent in DMP.
The rigging came to light in September when competing firms complained. A copy of the complaint, accessed by DNA said that OFB officials colluded with Bowas and DMP "and are in advance stage of finalising the contract for personal gains." The complaint was addressed to the OFB and other investigating agencies, including the Central Bureau of Investigation (CBI).
"Your officers, in gross violation of rules, have shortlisted instead of rejecting their offer and given (them the) opportunity to amend their offers," one of the letters read. Another line in the complaint read: "You (OFB) are also fully aware that Bowas and DMP are owned by the same owner".
The Nalanda factory was established in 2006 to produce ammunition for Bofors gun. OFN needed five critical plants- NC/NG Paste Manufacturing, Single Base Propellant Plant, Triple Base Propellant Plant, Combustible Cartridge cases and charge assembly to produce BMCS Charge to be used as ammunition for the Bofors gun. Initially, the contract for these plants, worth Rs 1,160 crore, was given to Israel Military Industries Ltd (IMI).
However, CBI arrested the then OFB chairman in a bribery case and IMI's contract was cancelled. Since OFN had procured a Nitrocellulose (NC) plant and Nitroglycerine (NG) plant from other sources, they needed NC-NG Paste plant to run them.
In 2013, a tender for this plant was floated again, but dropped for unknown reasons. It was re-floated in 2016, but no company participated.
Another tender was floated in 2017, before the last one in March 2018, in which Bowas and DMP participated.
DNA found that according to the Competition Act 2002 and OFB's own pre-contract integrity pact, such bidding is against norms. According to Pre-Contract Integrity pact, accessed by DNA, "the bidder will not collude with other parties interested in the contract to impair the transparency, fairness, and progress of the bidding process, bid evaluation, contracting and implementation of the contract,"
In response to DNA's questions, OFB says nothing was out of line in the tender process. OFB's response read as: "OFB for OFN is carrying out the procurement of NC-NG paste plant strictly as per the rules and regulations, and following the prescribed procedure. It may further be noted that the processing of capital procurement cases at OFB, like the one being cited in your query, is done by a committee following complete fairness, transparency and with due diligence."
DNA emailed Bowas and DMP several times for a response, but received none.
TWO TO TANGO
- Officials at Ordnance Factories Board (OFB), a wing of the Defence Ministry, allegedly ensured that only two European sister firms participated in the critical ammunition plant bidding.
- Both firms, namely Bowas (Austria) and DMP (Italy), are owned by the same German holding company, Bohlen
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