Congress questions Rs 45K-cr submarine contract to Adani

The Congress on Wednesday put brakes on a decision the defence ministry is to take on Friday to award a Rs 45,000-crore contract to manufacture six submarines to a joint venture of Adani Defence System and Technology Ltd with the government-run Hindustan Shipyard Ltd.

Its spokesmen Randeep Singh Surjewala and Jaiveer Shergil alleged that it was a clearcut case of promotion of crony capitalism by Prime Minister Modi to help his Gujarati friend Adani, violating all norms and despite the empowered committee of the Indian Navy rejecting his joint venture on three grounds.

They said the ball is now in the court of Defence Minister Rajnath Singh on whether he plays the Modi card to benefit Adani or not. He has to take the final decision on the contract either on Friday or maybe the next working day of Monday and get the approval of the Cabinet Committee on Defence that is headed by the Prime Minister. The spokesmen told a Press conference here that the empowered committee had shortlisted two firms -- the government-run Mazgaon Docks & Shipyard and Larsen & Toubro -- out of five bidders in the expression of interest invited by the Navy in April 2019.

They said the Prime Minister is, however, pushing the entity that was not suitable for the contract, particularly since it had no experience of building ships or submarines and did not meet the requirements of the defence procurement procedure of 2016.

Adanis could bid because the qualifying conditions in the contract included experience in power generation that his firms had. His firm was, however, rejected outright as "not eligible" on not one but four grounds by the empowered committee that it had no experience of ship building, nor did it submitthe SPV or Joint Venture (JV) agreement nor Hindustan Shipyard Ltd had taken the government permission for the JV as a government entity.

Surjewala circulated newspaper clippings of the Press conference of Hindustan Shipyard MD on September 28, 2019, 11 days after close of the bids on September 11, 2019, that they were in the process of forming a JV and that the government's permission will be taken thereafter. It clearly shows Adani's firm neither had the JV nor government's nod to Hindustan Shipyard for the joint venture at the time of bidding for the venture.

He also claimed that the Ministry of Defence (MoD) on Wednesday removed from its website an amendment on the credit rating that required 'A" rating if the contract is for +Rs 1,000 crore. Adanis have claimed the rating of triple B on account of its power plants, but that rating is much below "A" and that too when the contract is of Rs 45,000 crore and not just Rs 1,000 crore.