New Delhi, August 29:

Though India and China boast of a new ‘strategic partnership’, New Delhi still appears to be leery of Beijing when it comes to allowing Chinese participation in the sensitive defence and telecom sectors.

An example of this is the Indian Navy refusing permission on security considerations to oil exploration major Oil and Natural Gas Corporation (ONGC) to purchase speedboats from a Chinese firm that had quoted the lowest in a global tender. The government has also put on hold Chinese telecom giant Huawei Technologies’ proposal to invest $60 million — again on security grounds. So even while the Indian and Chinese governments have pledged to resolve long-standing border disputes and boost trade and economic cooperation, New Delhi has reservations about Beijing’s entry in certain areas.

The decision to acquire Immediate Support Vessels (ISV), or medium speedboats, for all offshore installations and facilities of ONGC was taken at a meeting of the Offshore Security Coordination Committee (OSCC) in October 2001. Consequently, the Offshore Defence Advisory Group (ODAG) of the navy worked out the broad specifications of the vessels. A global tender was floated by ONGC and a technical evaluation committee was formed prior to the opening of bids. The broad specifications for the speedboats were that they should be 23 metres long, have a draught of 1.5 metres and attain a maximum speed of 28 knots. The lowest bidder (L1) was a Chinese firm and ONGC expressed its inclination to award the contract to the Chinese. But the ODAG recommended the “disqualification of the Chinese firm on grounds of its being detrimental to national security. We were told security risks were involved if the Chinese firm was given the bid,” said an ONGC official.

Highly placed sources said that a note from the navy vice chief was then sent to the defence secretary explaining the circumstance of the bids. “To annul the contract to the Chinese, the defence ministry’s approval was obtained to modify the Staff Requirements (SRs) for a patrol craft with better sea-keeping capability and robustness,” said sources. The ODAG was then directed to draw up fresh specifications and the process began all over again. Almost four years after global tenders were invited for the purchase of speedboats, the specifications are still being scrutinised by various directorates in the naval headquarters. “There has been no decision on the vessels. These matters take time,” said a senior naval official. Last September, at the OSCC meeting, it was decided to scale down the cost of each craft within Rs 100 million (IC from the earlier quoted price of Rs 1 billion IC. That there has been a qualitative change in the relationship between the two countries was evident during the visit of Chinese premier Wen Jiabao in April. But in some matters, especially in the defence sector, many officials in the security establishment still view China as an adversary.