The government has withdrawn the tender for purchase of 98 torpedos for Scorpene submarines which a subsidiary of chopper scam tainted Italian defence conglomerate Finmeccanica had won during the UPA regime.
The government action by default means that Finmeccanica will not be considered for the over Rs 1,200 crore deal for which it is likely to float a fresh tender. The subsidiary of the Italian company will not be eligible for the fresh process of selection under new rules.
The government might also go in for a direct purchase of torpedos given the "critical necessity" as the first submarine is slated to be handed over to the Navy by September end.
"The tender for the heavy weight torpedos have been withdrawn," defence sources said adding that an alternate is being worked on.
Sources said that the SeaHake torpedos from Germany's Atlas Elektronik and France's F21 torpedos are being considered which could eventually become a 'Make in India' programme as such torpedos would be needed for other submarine projects which are in the offing.
Black Shark torpedoes, made by Whitehead Alenia Sistemi Subacquei (WASS), a subsidiary of Finmeccanica, had emerged the lowest bidder to arm the Scorpene submarines, the first of which will be handed over to the Navy by September this year.
However, the proposal to acquire it had been stuck for long. Various controversies had surrounded the deal which former Defence Minister A K Antony had not signed on.
The deal eventually got embroiled in the VVIP chopper scandal and it got dragged on, sources said.
The Navy had been pushing for it citing "operational necessity". However, sources said Defence Minister Manohar Parrikar has now decided to go for an alternative.
If the issue is not resolved fast, the Navy would be inducting the first Scorpene submarine without its main anti-ship attack system.
Sources said the Scorpene class submarines' have already been customised to integrate its fire control system with the Black Sharks.
Integrating another type of torpedo, will not only cost extra but also more time, the sources said.
Six submarines are being built at the Mazagon Dock Ltd with technology from French firm DCNS under an over Rs 25,000 crore project called P-75.
