Nalanda ordnance factory put on hold: Government

A corruption case involving an Israeli firm and a former head of Nalanda ordnance factory has delayed the plans to set up the munitions manufacturing unit in Bihar, parliament was told Monday.

India's 40th ordnance factory at Rajgir in Bihar was to be set up jointly with Israel Military Industries (IMI), which is under the Central Bureau of Investigation's (CBI) scanner for the bribery case.

"In view of the case registered by the CBI against Sudipto Ghosh, former DGOF (Director General Ordnance Factory), and others, it has been decided by the ministry of defence to put on hold for the present all procurement with IMI till further orders," Minister of State for Defence M.M. Pallam Raju told parliament Monday.

The Israeli ammunition firm was scheduled to complete the project to revive the factory on the lines of the IMI's ordnance factory in a Tel Aviv suburb by August 2011 under the Rs.12 billion deal.

Originally conceived in the late 1990s when George Fernandes was the defence minister, the Nalanda factory went into limbo when South African defence major Denel that was to collaborate in its construction was blacklisted on corruption charges.

The factory was to manufacture the propellant for the ammunition of the Bofors 155 mm howitzers and also Zitara carbines in collaboration with another Indian ordnance factory.

A review committee report in July 2007 gave the go-ahead to the project and it was finally approved by the government in January 2009.

All dealings with IMI were put on hold June 5 after its name surfaced in the bribery case against the retired chairman.

The CBI registered a case against Ghosh May 17.link