Buy hook, buy crook

http://www.theweek.in/theweek/current/buying-unwanted-military-equipment.html

By Ajit Kumar Dubey | October 11, 2015

With the boom in the defence industry and the decentralisation of arms dealing, India may end up buying expensive and unwanted military equipment

It was an informal meeting, in the lobby of a five-star hotel in central Delhi. A rendezvous between the representative of a European helicopter manufacturer and a recently retired naval officer. It was arranged by a mutual friend, and it did not go well.

“I was shocked when the officer, who retired as captain, offered to swing a deal for supplying 14 medium-weight helicopters for the Coast Guard in our favour with the help of his Navy friends deputed in the Coast Guard,” the representative told THE WEEK. “The officer said he would make sure that the specifications of the helicopters to be procured would be similar to the characteristics of our helicopter so that when the tender came out, we would sail through field trials.”

A blacklisting spree under defence minister A.K. Antony had made the representative wary of the pitfalls of the defence procurement sector in India. He blocked the officer's number on his cellphone and refused to entertain the calls of the mutual friend.

With the boom in the defence industry, influencing deals is no longer the exclusive domain of big-shot middlemen. Small players, mostly retired defence personnel who have contacts at procurement directorates of the forces, have entered the business. “Ever since the military industry started booming a few years ago, there has been a trend of using retired military officers to push deals for Indian as well as foreign firms. Deals are being influenced even at the basic level,” said Deba R. Mohanty, a defence industry expert.

Some time ago, the Navy issued a request for information for a surveillance aircraft that could be deployed from an aircraft carrier. Strangely, the specifications sought in the initial procurement document were strikingly similar to the capabilities of the American E2D Hawkeye surveillance aircraft. And, the requirement was projected at a time when India was more than a decade away from owning and operating a carrier big enough to operate such an aircraft. At present, the Navy has only one fully operational aircraft carrier, INS Vikramaditya, which cannot be used to deploy such planes.

Another case related to the Navy is of the procurement of the Japan-made US-2 amphibious aircraft, which did not figure in the original procurement plans. But, after a commerce ministry delegation visited Japan in 2012, the two countries started discussing the development and manufacturing of the aircraft in India.

The Navy, sources say, is now being pushed to buy 12 such aircraft for $1.5 billion. The Coast Guard is being asked to buy six more to make the deal more economical. If the deal goes through, India would have the largest fleet of such aircraft—even the Japanese Maritime Self-Defence Force has fewer such aircraft.

“With the increasing pressure of pensions and salaries on the defence budget, the armed forces should be more prudent in spending each and every penny. Such things [as procurement of the US-2 aircraft] will lead to not just cuts in meeting their genuine requirements, but also to gaps in capabilities that are required,” said Captain (retd) Sunil Chauhan.

Some time ago, the Navy upgraded its fleet of 14 second-hand Sea Harriers from Britain spending more than 01,500 crore, which included the cost of equipping the aircraft with missiles and radars. “The upgrade was completed by the end of 2010. Today, they [the Sea Harriers] are facing operational problems and rarely fly. The upgrade was undertaken despite knowing very well that the country was getting MiG-29K fighters from Russia,” said an officer of the naval aviation wing.

A similar case is that of the proposed procurement of around two lakh assault rifles for the infantry. The Army framed specifications for interchangeable barrels for conventional warfare and counterinsurgency operations. But, when the tender was issued in 2013, foreign as well as Indian firms complained that the requirements specified were “unreasonable”.

“After several rounds of field evaluations, the vendors and the Army had the same realisation: that the requirements were unreasonable,” a defence ministry official told THE WEEK. “We had to quash the tender, resulting in another delay in providing robust basic weapons to infantrymen.” Sources in the ministry say a former Army chief was pushing for the selection of a particular rifle, but could not succeed.

Another case still in the making is the procurement of Apache attack helicopters from the US. Two years ago, the Air Force persuaded the defence ministry to buy 22 Apaches for its combat chopper squadrons. The Army, too, made a case to get 39 of such choppers for its aviation wing.

With the procurement of the first batch of 22 Apache helicopters expected to be cleared soon, the Air Force and the Army are engaged in a bitter battle over the ownership of the choppers. Sources agree that Apaches are required for providing firepower to the Air Force and the Army. But, according to them, there is no need for buying so many, at a time when Hindustan Aeronautics Limited is developing its light combat helicopters.

The Army also wants to buy howitzers from the US in a government-to-government deal. Owing to the cost of procurement, a decision was taken in 2010 to cap the number of guns at 145. A few years ago, say sources, a former Army chief pushed the lieutenant general in charge of acquisitions to prepare a case for buying more howitzers. “I was put under a lot of pressure,” the lieutenant general, who is now retired, told THE WEEK. “After I threatened to involve the defence ministry in it, the interested official backed out. But that was followed by a series of anonymous complaints against me.”

Public sector companies are not far behind in spending funds on developing unwanted equipment. Take the case of light utility helicopters for the Army and the Air Force. The government has decided to set up a joint production facility with the Russian firm Kamov for procuring the choppers. But HAL is continuing with the development of its own version of light helicopters, despite the Army making it clear that it would not require them.