The defence ministry has often made a case for bringing about transparency and accountability in defence acquisitions. Yet the process remains ambiguous. The controversy over the Rs 4,000-crore deal for the purchase of 12 AW-101 helicopters from Anglo-Italian company, AgustaWestland, is another pointer to this. Vice-Admiral Premvir Das (retd), former commander-in-chief of the Eastern Naval Command who has also served on the National Security Advisory Board, discusses the issue with Veenu Sandhu
What do you make of the allegation that specifications were altered in the tender during the period that S P Tyagi headed the Air Force?
When a decision is taken to procure a defence equipment, the initial specifications or qualitative requirements, as we call them are first drafted by a relatively junior rank officer. They are then revised and modified as they go up the decision chain and by the time they are finalised, several changes have been made. If the requirement is multi-agency, as it was in this case, then views of all of these are taken and further changes made. It is only then that they are frozen and a Request for Proposals (RFP) floated to possible suppliers by the Ministry of Defence (MOD). Thereafter,the specifications can be changed only with the approval of the defence minister. Therefore, the question of changes to specifications made before the RFP (it was only projected in 2005) is a non-issue.
Does the integrity pact which is mandatory in all defence procurement deals involving overseas contracts reduce chances of corruption?
Should it be made mandatory for foreign suppliers to appoint agents in India if they want to do business?
Anybody who wants to represent a manufacturer must be registered with the MOD. To my best knowledge, very few are registered. India is a huge market and there is immense inter-vendor and inter-country rivalry and cut-throat competition to get contracts through. This is where the agents come in. They persuade the foreign companies that they know the Indian system well and can help in getting things moved through the labyrinth of Indias decision-making process. This comes at a price. Some big companies have offices in Delhi and employ people as office staff whose names and emoluments are intimated to MOD. Others operate through representatives whom they reimburse for administrative and logistics assistance and for helping them through the bureaucracy. The details of these people are not known to the MOD as also the terms and conditions of their employment. The MOD should require all prospective suppliers to either set up offices in the country or reveal names of those who look after their interests and on what terms. This might not entirely put an end to the practice of paying commissions but will help in minimising it. We must also engage the governments of the vendor countries, but given our arms market size and intense vendor/country rivalry, it may not be possible to eradicate the practice. Sadly, this is true of major arms sales around the world, especially in countries like ours which are dependent on import-purchase of modern military hardware.
How does such a controversy affect the morale of the troops?
It is amazing that some foreigner somewhere makes a confession, for reasons yet unknown and we lose our balance and damn our own people, including those who have held the highest military positions and all without the semblance of an investigation! It seems to be an Indian trait to treat the word of a foreigner, especially from a western country, as gospel truth and trash our own people. Why are we taking the words of these people at face value? Is there more to theconfession than meets the eye? Are some local (Italian) political machinations guiding this or is it only part of inter-vendor rivalry in which one is trying to demolish the other? We do not know. I dont know if the former air force chief was involved; only our investigation will bring out the facts and he has, himself, demanded it. The argument that he met people representing a supplier at some exhibition is facile; at such places there are dozens of major vendors present and he meets so many of them. Does that make him suspect?We, especially our media, must be more restrained in targeting senior military leaders on evidence which until now is nothing more than one mans statement because that has a direct impact on the morale of a military service.
During the monthly meetings of theNational Security Advisory Board, did the issue of accountability and transparency in defence procurement come up frequently?
Yes. The Naresh Chandra Committee(a 14-member task force set up to review defence management and make suggestions for implementing major defence projects) has also recommended that while every effort should be made to identify and punish the guilty, we should exercise careful consideration before we start scrapping contracts which have serious detrimental effect on the countrys combat readiness. In short, dont shoot yourself in the foot. There are larger implications which need to be taken into account. This case, meanwhile, has at least shown us the flaws that exist in the system.
What do you make of the allegation that specifications were altered in the tender during the period that S P Tyagi headed the Air Force?
When a decision is taken to procure a defence equipment, the initial specifications or qualitative requirements, as we call them are first drafted by a relatively junior rank officer. They are then revised and modified as they go up the decision chain and by the time they are finalised, several changes have been made. If the requirement is multi-agency, as it was in this case, then views of all of these are taken and further changes made. It is only then that they are frozen and a Request for Proposals (RFP) floated to possible suppliers by the Ministry of Defence (MOD). Thereafter,the specifications can be changed only with the approval of the defence minister. Therefore, the question of changes to specifications made before the RFP (it was only projected in 2005) is a non-issue.
Does the integrity pact which is mandatory in all defence procurement deals involving overseas contracts reduce chances of corruption?
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The integrity pact was initiated to reduce, and ideally prevent, chances of corruption through middlemenduring procurement through a clause in the contract between the MOD and the supplier. This clause requires the supplier not to deal through intermediaries and refrain from providing any commissions or indulge in bribing public officials. If contravened, the supplier can be called upon to forfeit all money paid till the act of commission comes to light and is in danger of being blacklisted. This is certainly a deterrent to the supplier but cannot by itself neutralise deliberate malpractice. Blacklisting is an option and, in earlier years, we have done this to companies in Sweden (Bofors), Germany (HDW), South Africa (DENEL) and Singapore (ST). What effect this has had on those companies is debatable but their dealings with India are stopped and this must have hurt them; it has certainly put our own modernisation back by more than two decades. Good examples are long range guns (155mm) for the army which are still nowhere on the horizon and construction of submarines for the navy which has been put back 25 years.
Should it be made mandatory for foreign suppliers to appoint agents in India if they want to do business?
Anybody who wants to represent a manufacturer must be registered with the MOD. To my best knowledge, very few are registered. India is a huge market and there is immense inter-vendor and inter-country rivalry and cut-throat competition to get contracts through. This is where the agents come in. They persuade the foreign companies that they know the Indian system well and can help in getting things moved through the labyrinth of Indias decision-making process. This comes at a price. Some big companies have offices in Delhi and employ people as office staff whose names and emoluments are intimated to MOD. Others operate through representatives whom they reimburse for administrative and logistics assistance and for helping them through the bureaucracy. The details of these people are not known to the MOD as also the terms and conditions of their employment. The MOD should require all prospective suppliers to either set up offices in the country or reveal names of those who look after their interests and on what terms. This might not entirely put an end to the practice of paying commissions but will help in minimising it. We must also engage the governments of the vendor countries, but given our arms market size and intense vendor/country rivalry, it may not be possible to eradicate the practice. Sadly, this is true of major arms sales around the world, especially in countries like ours which are dependent on import-purchase of modern military hardware.
How does such a controversy affect the morale of the troops?
It is amazing that some foreigner somewhere makes a confession, for reasons yet unknown and we lose our balance and damn our own people, including those who have held the highest military positions and all without the semblance of an investigation! It seems to be an Indian trait to treat the word of a foreigner, especially from a western country, as gospel truth and trash our own people. Why are we taking the words of these people at face value? Is there more to theconfession than meets the eye? Are some local (Italian) political machinations guiding this or is it only part of inter-vendor rivalry in which one is trying to demolish the other? We do not know. I dont know if the former air force chief was involved; only our investigation will bring out the facts and he has, himself, demanded it. The argument that he met people representing a supplier at some exhibition is facile; at such places there are dozens of major vendors present and he meets so many of them. Does that make him suspect?We, especially our media, must be more restrained in targeting senior military leaders on evidence which until now is nothing more than one mans statement because that has a direct impact on the morale of a military service.
During the monthly meetings of theNational Security Advisory Board, did the issue of accountability and transparency in defence procurement come up frequently?
Yes. The Naresh Chandra Committee(a 14-member task force set up to review defence management and make suggestions for implementing major defence projects) has also recommended that while every effort should be made to identify and punish the guilty, we should exercise careful consideration before we start scrapping contracts which have serious detrimental effect on the countrys combat readiness. In short, dont shoot yourself in the foot. There are larger implications which need to be taken into account. This case, meanwhile, has at least shown us the flaws that exist in the system.