Stench of the Arms Bazaar
by Sandhya Jain on 10 Apr 2012 29 Comments
It is now obvious that the controversy over the Army Chief’s date of birth had one goal - to install in position persons considered useful by politicians, bureaucrats, and officers linked to the arms lobby. The Supreme Court erred grievously when it forced Gen. VK Singh to withdraw his petition. He remains in the awkward position of having 1951 as his birth date for all awards and promotions till the rank of Maj-Gen, and 1950 for subsequent elevations as Lt. Gen., Corps Commander, and Army Chief.

The Court did not clarify if it regarded the Attorney General’s opinion that a whimsical ‘line of succession’ should not be disturbed, as binding. Now, as whispers grow that sectarian bias influenced the choice of proposed successor, the Prime Minister should rise to the occasion, settle the dispute in the General’s favour, and keep him in office to clean up the sewer flowing into Army HQ.


Gen. Singh is being hounded for acting decisively in the Sukhna land scam; Adarsh Society scam; trying to clean up military purchases and reporting attempts to bribe him to the Defence Minister; and writing to the Prime Minister about critical gaps in our defence preparedness.


Powerful arms dealers got his letter leaked to the press, hoping the scandal would end Gen Singh’s tenure. Mercifully, Mr AK Anthony quickly ordered an enquiry and the Intelligence Bureau cleared Gen. Singh and Army HQ. India is one of the world’s largest arms importers, and the defence budget for 2012-13 is Rs. 1.94 lakh crore. It is a haven for arms dealers as the political leadership has long favoured an opaque procurement system in order to corner huge funds, ostensibly for elections.


But, after the letter scam, the UPA ended years of prevarication and on 2 April 2012 cleared the five- and 15-year perspective plans of the armed forces. Mr Anthony told the Army to streamline its acquisition process to fix accountability for slippages, compress the timeframe for technical evaluations and trials, and proposed more financial powers to Service HQs for speedier acquisition of weapon systems and platforms.


Too many UPA defence deals are dubious, such as the 2010 Augusta Westland helicopter deal with the Indian Air Force, for 12 VVIP helicopters at a whopping Rs. 3,566 crore. Italy is investigating allegations of corruption at parent company Finmeccanica, including the Indian deal. Company insiders say slush funds were generated after a “sudden escalation” of price by 10 million Euros. Strangely, the Public Accounts Committee and Comptroller & Auditor General have not taken note of the Italian investigation.


Gen Singh became inconvenient when he refused to sign for more all-terrain Tatra trucks in 2010, calling them sub-standard (with no proper facility for maintenance), and grossly overpriced at Rs one crore each, when available in Europe at Rs 40 lakh/truck. He famously shunned a Rs 14 crore bribe, and sought to widen the suppliers list by seeking additional proposals from Ural, Tata and Ashok Leyland.


The Tatra deal was signed in 1986 when Mr Rajiv Gandhi was prime minister & defence minister. The original manufacturer, Tatra, was a Czech firm, but British citizen Ravi Rishi somehow routed the sale via his firm, Vectra Ltd, making profits at both ends. A Czech Republic former police officer, Vaclav Laska, has now sought a probe into this deal, saying that from 2005, Tatra supplied complete knock-down kits (CKD) to India’s state-owned BEML Ltd, which assembled the vehicles. But Vectra Ltd often purchased the CKD kits at below production cost, causing losses of at least 10% per kit to the Czech company. Thus, all profits went only to the British company; the Czech Republic also lost income tax due from Tatra.


In India, the CBI is investigating “unknown” BEML officials who colluded with Vectra to supply Tatra trucks violating Defence Procurement rules, and allowed change of currency from US dollars to Euro.


Other questionable defence deals include the $11 bn Dassault Rafaele for 126 fighter medium multi-role combat aircraft (MMRCA), which Mr MV Mysura Reddy, MP and member, standing committee on defence, claims was manipulated by some members of the evaluation committee. The French Rafaele has not been purchased by any other country; it was seen as a failure in precision bombing during the recent NATO air campaign in Libya.


Experts say Rafaele is no match to SU-30, and India should have managed with SU-30 and Tejas, as Rafaele lacks the capability to fire at enemy planes beyond visual range. The Russian R77 rocket used in SU-30 is almost as good as USA’s AMRAAM. Also, Rafaele involved no meaningful technology transfer. It is inferior to China’s fifth-generation Chengdu J-20; the $6 bn+ French submarines are also no match for PLA’s nuclear-powered vessels.


The evaluation committee allegedly manipulated to eliminate the single-engined Saab Gripen on grounds that twin-engined aircraft are safer; statistics show both are at par. Moreover, as Saab was bankrupt, India could have purchased the company itself at the price of the MMRCA deal, thus gaining advanced technology and solving the problem of developing a suitable engine for Tejas, instead of depending on foreign firms.


The issues are hardly so complex as to be incomprehensible to babus in the Ministry; yet our modernization programme is lagging by decades because of the bureaucracy’s stranglehold over the process. For instance, the Tactical Communication System, mooted in 1996, has barely moved in 16 years!


Defence PSUs merely import foreign equipment, though their mandate is to procure technology from vendors and indigenise production. The Army Chief complained that the Army does not have ammunition for tanks and artillery, though there are 39 ordnance factories and nine PSUs under the Ministry!


In the past 50 years, the DRDO has not developed a single major equipment in time, or as per specifications. Yet no equipment can be imported without DRDO accepting inability to develop the product in the necessary timeframe. It scuttled a deal to import Weapon Locating Radars in 1997, and the Army had to fight in Kargil without WLR, suffering extra casualties as it could not locate and neutralise Pakistani artillery effectively. To date, DRDO has not produced WLR.


But the kneejerk reaction to blacklist companies alleged to have paid bribes has seriously affected our military preparedness and deprived us of access to some of the best equipment. We need to weed out the illicit profiteering fixers; not the legitimate arms vendors.


The author is Editor,

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