Opinion Op Ed 10 May 2016 Arms and the middlem ...
The writer is former lieutenant-governor of Andaman and Nicobar Islands and Puducherry

Arms and the middlemen

Published May 10, 2016, 1:01 am IST
Updated May 10, 2016, 1:01 am IST
A file photo of AgustaWestland (AW101) VVIP Airforce Helicopter. (Photo: PTI)
 A file photo of AgustaWestland (AW101) VVIP Airforce Helicopter. (Photo: PTI)

Corruption in Indian defence deals date back to the 1948 jeep scandal when the pesky and brazen V.K. Krishna Menon, India’s high commissioner to the UK, ignored the protocols and signed a deal for 200 jeeps with a foreign firm and India only received 155. Since then, Bofors, HDW submarines, “Coffingate”, Tatra trucks and many such deals are symptomatic of the continuing taints that have afflicted the various defence deals. In almost all these deals, murmurs about the nexus between shady arms dealers and politicians of the ruling dispensations (of all political persuasions) did the rounds.

However, the conviction rate of any Indian politician or bureaucrat of any significance in the defence deals has been virtually zero and the “blacklisting” of tainted firms has resulted in unprecedented difficulties for the Indian defence forces. Bofors, the Swedish manufacturer was blacklisted in 1987 and the ban was lifted only in June 1999 when Bofors proved its mettle in the Kargil war, albeit, badly crippled for want of spare parts.

A similar experience was faced by the Indian Navy when the German submarine manufacturer, HDW, was suddenly blacklisted on disclosures of kickbacks after having supplied four submarines. The HDW blacklisting forced the authorities to deal with dodgy companies to secure spare parts and keep the fleet operational at exorbitant prices. Even in the current melee about the AgustaWestland helicopter scam, questions on the maintenance and spare parts of the three helicopters already inducted and the Naval Sea King helicopters abound, with no clarity on managing the eventuality, and its repercussions.

Strangely, efforts to tighten the screws on corruption have only made the process more complex as it gets mired in intrigues that further require “insiders”.
Individual arms deals often run into billions of dollars with long-term maintenance and technology support contracts. The process is bureaucratic, highly competitive and long-winding. Hence, it is susceptible to influencers who can circumvent, accelerate and grease palms with “speed money” to keep the deal moving in a particular direction, till fructification.

Two systemic changes introduced have been the formation of a Technical Oversight Committee, and the almost naïve, honour-based Integrity Pact (since 2006), which has an undertaking by the bidders that they have not paid/will not pay bribes, etc. with appropriate penalties (this was made compulsory for all procurement deals above Rs 100 crore). Politically, indecision, procrastination or blacklisting could be kosher, but militarily it is disastrous as it perpetuates the risks to the soldiers and the nation. Against an authorised strength of 42 fighter squadrons, the Indian Air Force has only 33 — the tender for 126 medium multi-role combat aircraft (MMRCA) was done in 2007, yet despite Rafale’s selection in 2012, we are still haggling with Dassault Aviation over the base price fixation for the first 36 fighter aircraft in 2016.

There is an urgent need to simplify, shorten and insulate the workings of the core selection team from the competing vendors. This team needs enhanced participation of soldiers rather than tenure-based bureaucrats (the director-general of acquisition, defence ministry, is an IAS officer), and, critically, the answerability of decisions to Parliament rather than the government. This will go a long way in curbing the enthusiasm of ruling politicians, fixers and lobbyists in the ultimate preference of a weaponry, which ought to be decided only on the service requirements.

A fast-track court (perhaps, even military) to convict any individual seen to be meddling in a deal, in a time-bound manner, will ensure adequate deterrence and distance. Last but not the least is the acceleration of private participation in defence industry to harness the technological, entrepreneurial and cost advantages afforded domestically. Currently, the much-bandied “Make in India” private industry thrust accounts for less than one per cent of the defence budget, signalling India’s tentative steps towards the new defence procurement procedure. Globally, private sector for defence industry fuels the domestic economy. Even a pacifist country like Sweden regularly supplies armament to countries with questionable human rights track record like Saudi Arabia, Bahrain or Egypt.

At the end of the day, scale of defence deals are reflective of our political abilities (or failures) in managing foreign affairs with our neighbouring countries, as indeed our domestic affairs. Unsettled international border disputes, multiple insurgencies and secessionist movements within the country and frequent requisitioning of the armed forces for managing natural and man-made disasters is squeezing the capability and capacity of the defence forces to its limits.

Given the current status, India’s reliance on international defence deals for critical sustenance and efficacy of the over-stretched and under-equipped defence forces is complete and necessary for at least the next two to three decades (India is the top arms importer, accounting for 14 per cent of the global arms trade). So with the financial stakes expected to continue running high in the near future (Rs 78,586 crore has been allocated for capital expenditure in the current year’s defence budget), coupled with existing systemic inefficiencies will ensure the curse of “influencers”. Unfortunately, the AgustaWestland narrative is more focused on political blame-game rather than the critical task of simplifying the procurement process with adequate transparency, build-in.

The lure for defence deals thrives on the inherent red-tapism and lack of conviction of “influencers” in the multiple scams so far. Meanwhile, the soldiers’ remains exposed, under-involved and inadequately equipped to handle the conventional and unconventional demands that are enforced upon them to guard the borders and within.

 

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