Black­list­ing is not the an­swer

In cases of al­leged cor­rup­tion in de­fence deals, as a mat­ter of pol­icy, the Min­istry of De­fence must sep­a­rate of­fence from the con­tract and deal with the for­mer rather than can­cel the con­tract it­self and jeop­ar­dise na­tional se­cu­rity.


The At­tor­ney Gen­eral has ad­vised the gov­ern­ment that a ban on the Ital­ian con­glom­er­ate Fin­mec­ca­nica, whose UK-based sub­sidiary Agus­taWest­land is en­meshed in the VVIP he­li­copter scam, would jeop­ar­dise the bat­tle-readi­ness of the armed forces and im­pinge on na­tional se­cu­rity. Black­list­ing Fin­mec­ca­nica along with its sev­eral sub­sidiaries that sup­ply weapon sys­tems, radars and am­mu­ni­tion to the In­dian armed forces, is not ad­vis­able since the on­go­ing CBI in­ves­ti­ga­tion and the sub­se­quent trial in the VVIP he­li­copter scam could take over a decade to be com­pleted. The gov­ern­ment has also de­cided against black­list­ing Rolls-Royce cur­rently un­der the CBI scan­ner for al­legedly pay­ing hefty com­mis­sions to In­dian agents to se­cure con­tracts. The de­fence min­istry will clear those projects with Rolls-Royce that are cru­cial for op­er­a­tional ur­gency and na­tional se­cu­rity.

A.K. Antony can pat him­self on the back for be­ing the “long­est serv­ing Min­is­ter of De­fence”. But as far as the In­dian Armed Forces and the na­tion at large are con­cerned, Antony’s ten­ure as the Min­is­ter of De­fence will be known more for scams in deals per­tain­ing to pro­cure­ment of mil­i­tary hard­ware, black­list­ing of sev­eral lead­ing aero­space and de­fence firms from South Africa, Sin­ga­pore and even Is­rael with whom the na­tion had for long en­joyed a ro­bust re­la­tion­ship, even dur­ing the cold war era. Antony’s some­what misplaced ob­ses­sion for hon­esty, per­sonal in­tegrity, trans­parency and his pen­chant for or­der­ing in­ves­ti­ga­tions at the slight­est hint of mis­de­meanour in the pro­cess­ing of ten­ders, slowed down the pro­cure­ment process that is al­ready sub­ject to in­tense scru­tiny by a multi-lay­ered bu­reau­cracy.

Antony was also some­what trig­ger-happy in or­der­ing can­cel­la­tion of con­tracts not only in the last minute but even half way through its ex­e­cu­tion. The ten­der for ar­tillery guns for the In­dian Army was can­celled five times leav­ing the In­dian Army even to­day with­out a re­place­ment of the ob­so­lete Bo­fors guns. The most re­cent case was that of the con­tract for 12 AW-101 he­li­copters for VVIP travel. Can­cel­la­tion of this con­tract after the de­liv­ery of three plat­forms to the In­dian Air Force (IAF) and pay­ment of 45 per cent of the con­tract value made in ad­vance to the orig­i­nal equip­ment man­u­fac­turer (OEM), has been a source of con­sid­er­able em­bar­rass­ment for the IAF that is left with no ro­tary wing air­craft for VVIP travel. The IAF is left lit­er­ally hold­ing the baby with three Agus­taWest­land AW-101 he­li­copters on its inventory that it can­not use as the OEM is dis­cred­ited and no prod­uct support would be avail­able for the ma­chines. The IAF has no op­tion but to retrofit for VVIP travel, the newly in­ducted Mi-17 V5 drawn from the op­er­a­tional fleet.

The ad­vice by the At­tor­ney Gen­eral to the NDA gov­ern­ment not to im­pose a com­plete ban on the Ital­ian con­glom­er­ate Fin­mec­ca­nica, re­flects a good un­der­stand­ing of ground re­al­i­ties. Fin­mec­ca­nica and its sub­sidiaries are al­ready in­volved in sev­eral on­go­ing de­fence projects in In­dia in­clud­ing the $20 bil­lion ten­der for 126 medium multi-role com­bat air­craft (MMRCA) the Rafale air­craft from Dassault. Fin­mec­ca­nica holds a 25 per cent share in MBDA, a joint ven­ture with Air­bus and BAE Sys­tems, which is in the race to sup­ply the Me­teor air-to-air mis­sile for the MMRCA fleet. Also, Fin­mec­ca­nica is in the race for In­dian mil­i­tary con­tracts worth over $6 bil­lion, rang­ing from he­li­copters and air­craft to mis­siles and guns. Projects that are cur­rently on hold in­clude the ` 1,800 crore deal for 98 “Black Shark” heavy-weight tor­pe­does for the Scor­pene sub­marines be­ing built in In­dia. Th­ese tor­pe­does are man­u­fac­tured by White­head Alenia Sis­temi Subac­quel (WASS), a Fin­mec­ca­nica sub­sidiary. Fin­mec­ca­nica also has a stake in the Euro­pean NH-90 he­li­copter that is in the race for the multi-role he­li­copters con­tract for the In­dian Navy. Im­pos­ing a com­plete ban on the company in ques­tion at this stage would un­doubt­edly be un­wise as it would prove coun­ter­pro­duc­tive.

In the case of the pro­posed black­list­ing of Roll­sRoyce, the At­tor­ney Gen­eral has main­tained con­sis­tency in his as­sess­ment of the sit­u­a­tion. The In­dian Navy and the IAF are all heav­ily de­pen­dent on Roll­sRoyce for the main­te­nance of aero-en­gines in­stalled on fixed wing air­craft, he­li­copters and fast-pa­trol ves­sels. For the IAF, Rolls-Royce en­gines power the Jaguar, Avro, Em­braer Legacy jets, C-130J Su­per Her­cules, Hawk Ad­vanced Jet Train­ers and Ki­ran Mk II jet train­ers. In the In­dian Navy, Rolls-Royce en­gines are fit­ted on the Sea Har­ri­ers.

In cases of al­leged cor­rup­tion in de­fence deals, as a mat­ter of pol­icy, the Min­istry of De­fence must sep­a­rate of­fence from the con­tract and deal with the for­mer rather than can­cel the con­tract it­self and jeop­ar­dise na­tional se­cu­rity. It is in­deed for­tu­nate that the NDA gov­ern­ment has be­gun to shed the legacy of the past and the in­ter­est of na­tional se­cu­rity, has adopted a far more prag­matic ap­proach to deal­ing with al­le­ga­tions of cor­rup­tion in de­fence deals.

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