Ministry to Hang Up On Anonymous Complaints that Delay Defence Deals

By N C Bipindra

Published: 08th Jun 2014

NEW DELHI: It has taken only a fortnight for the Narendra Modi government to pinpoint a major bottleneck in timely completion of defence projects. Minister of State for Defence Rao Inderjit Singh made it clear that the new government’s focus will be on removing the existing bottlenecks and to tackle issues facing the defence deals that are stuck due to “investigation” into each and every complaint that lands in the Defence Ministry.

To remove hurdles in ensuring smooth supply of urgently required military equipment to the country’s 13.1-lakh armed forces, the Defence Ministry henceforth, will not cancel or stop the procurement process based on “frivolous” complaints. It will proceed with the process till a court of law found substance in them and pronounced a sentence.

In the previous UPA regime, then Defence Minister A K Antony made it a practice to put on hold procurement of military hardware, even on the basis of anonymous complaints.

“One particular issue we would like to address is the deals getting delayed or cancelled or sent to investigation over anonymous and frivolous complaints, as was witnessed during the previous UPA regime,” he said to a specific query.

In nearly all defence deals, anonymous and frivolous complaints come on behalf of arms firms that have lost a tender or a contract. Such complaints usually raise questions on the procurement procedure followed or the winner‘s product not meeting the set standards. “Many a times, the complaints are from the defence firms that have lost a tender or a contract. They complain against procedures followed in the selection or try to mar the selection process itself in favour of their rival company. These complaints and anonymous letters delay the acquisition process,” Rao Inderjit Singh noted.

On other occasions, there are complaints of bribery or pecuniary benefits obtained by those officers who are part of the selection process.

While the armed forces are looking at quick procurement in view of the criticality of the situation and the urgent requirement that they have, their needs do not get fulfilled due to the long-drawn investigation into those complaints.

As of now, several key procurement projects of the armed forces are stuck over complaints, both anonymous and some frivolous.

One such procurement stuck over a decade now, after being cancelled once previously in these years, is the 197 Light Utility Helicopters for the Army and Air Force. In the latest tendering process, which began in 2008, has been moving forward in spurts and starts, getting derailed in the middle of 2013 again.

The procurement of the helicopters is key to the survival of Indian Army men posted in inhospitable Siachen Glacier, where the only means to transport goods and personnel is by these light utility helicopters.

The Defence Ministry has not decided to not to initiate action such as cancellation of deals or suspension of contracts while investigation is in progress, but to proceed with the procurement process. “Punitive action against offenders in such complaints would be taken against defence companies and individuals involved only after charges are proved in a court of law,” Rao Inderjit Singh said.

Earlier, action was being taken only on the basis of complaints. That scuttled acquisition plans, each and every time.

In fact, Antony had also admitted to such complaints landing on his desk on a number of occasions. But his response had always been: “We will never brush any complaint under the carpet. We will not dump any complaint into the dustbin. We will inquire into them.”

This stand of Antony had led to a large number of complaints reaching him. Most of the complaints were sent to the Central Bureau of Investigation (CBI) for a probe.

Between 2010 and 2013, the defence ministry had referred a record number of 90 cases to the CBI in those three years. The ministry had referred 22 cases each in 2010 and 2011 to the CBI. In 2012, the ministry sent 36 cases to the agency and in January of 2013, it referred 10 cases.

Antony admitted in the Rajya Sabha in March 2013 in reply to the members‘ queries that complaints alleging irregularities and corruption in defence deals are received from “various sources from time to time”.

Of these 90 cases, 42 were still under investigation, 41 cases were pending trial and five cases had been closed by the CBI after recommending administrative action. Since then, Antony had recommended 20-odd complaints more to the CBI in 2013-14.

Rao Inderjit Singh, who was the Minister of State for Defence Production in the UPA-I government was a victim of such complaints. Singh lost his portfolio after some complaints were sent to Antony against his junior minister alleging that he was involved in a defence land scam in Kandivili in Mumbai involving a private company called Neo Pharma Limited. The complaint was referred to the CBI in January 2012 and after a probe, the agency found nothing wrong against Rao Inderjit Singh and closed the case as such in March 2013.

However, the Defence Ministry under Antony had put the tendering process in cold storage. It’s a year since that action.

A letter purportedly written by a middleman claimed that a serving Brigadier of the Indian Army had sought a bribe of Rs 25 crore from a company that is not even in the race in the tender anymore.

Key Projects held up

M777 ultra light howitzers: In mid-2012, Defence Minister A K Antony received an anonymous letter complaining that the selection of the howitzers was not done as per the procurement procedure and that the gun, of which the Army required 145 units, had not met the standards. Along with the anonymous letter, a few pages of a report on the selection trial held on the howitzer were also sent as an attachment. The papers suggested that the selected gun had not met some of the parameters set on its performance. Antony ordered a probe into the matter and after a six-month probe into the complaint, no substance was found to proceed on the matter. Two years hence, the `3,500-crore contract signing is still pending.

Light Utility Helicopters: In December 2007, the `7,500-crore tender for 197 of the helicopters was cancelled by Antony after complaints emerged primarily from a rival company that the then winner Eurocopter (present day Airbus Helicopters) had not followed the procedures for selection. The complaint was that the company had not presented the helicopter it was offering for sale to India during one of the trials and hence was a violation of the procurement procedure. The Defence Ministry then went in for a reissue of the tender in 2008 after going through a four-year process in the now cancelled tender. Even the second tender faces the threat of cancellation. Neither of the two firms now in the race are responsible for the procurement process getting derailed in the middle of 2013. In an Italian probe into corruption charges against its firm AgustaWestland, the investigators stumbled upon a letter purportedly written by an arms middleman, claiming that a serving Indian Army Brigadier had sought a ` 25 crore bribe from the Italian company executive to favour the company in the tender. AgustaWestland was eliminated in the trial stage. Only European consortium Eurocopter and Russian Kamov are in the race.

http://www.newindianexpress.com/thesundaystandard/Ministry-to-Hang-Up-On-Anonymous-Complaints-that-Delay-Defence-Deals/2014/06/08/article2268521.ece