Corruption in Arms Deals - News and Analysis

Sagar G · Post by **Sagar G** » 26 Mar 2013 00:17

Austin wrote:DRDO approval is absolutely necessary to get the go ahead in foreign buy

No, DRDO's views are definitely taken when going in for a foreign purchase so as to be sure there is no Indian alternative present but DRDO is nowhere associated after the permission is given by MoD, the armed forces play there role after that.

Sagar G · Post by **Sagar G** » 26 Mar 2013 00:20

Austin wrote:DRDO still has a veto power when it comes to import

Since when did DRDO became more powerful than the Def Min or the PMO itself ??? Stop peddling BS.

ramana · Post by **ramana** » 26 Mar 2013 01:17

Pioneer

Bribes were taken confirms AKA

But not by whom!!!

With Defence Minister AK Antony confirming on Monday that corruption had indeed taken place in the `3,700-crore VVIP helicopter deal with AgustaWestland, the Government may have few options but to blacklist the Italian company and cancel the contract. “I do feel somebody has taken money,” Antony told reporters in Kochi.

The Minister’s admission clearly means the Italian company violated the integrity pact, which paves the way for the cancellation of the contract and blacklisting of the firm.

In a report in its Monday edition, The Pioneer quoted a Defence Ministry official as saying that more credible evidence will be required to act against the Italian firm, and action cannot be “impulsive or intuitive.”

However, Antony said, he would stand by the commitment he made to Parliament that no mercy would be shown to anybody. “The investigation has entered a crucial phase. We will surely take action, however powerful they may be,” Antony said on the sidelines of a programme at the Southern Naval Command headquarters in Kochi. Stating that the CBI was pursuing the matter vigorously, Antony said everything would become clear after some time.

“Please wait for some more time. Have no doubt that strict action will be taken against those involved,” he said, adding that the Defence Ministry was in the final stages of the preparation of a new procurement policy. Antony said that the new policy for procurement would pursue indigenisation very, very aggressively.

Asked about the proposal to raise the FDI limit in the Defence sector, he said: “At the moment, we are not for any hasty decision.”

Critics and observers, however, refused to attach much weight to Antony’s confirmation by saying that the Defence Minister was not making any new disclosure. They said the whole country knew that there had been corruption in the deal and that influential people could have been behind it.
{Must be the bad Internet critics. Nothing is good enough for them!}

The point now was to identify them and act against them, they argued. The Italian investigators had already indicated long back that there had been corruption in the deal and that Finmeccanica had paid bribes to the tune of `360 crore to win the `3,700-crore deal for the acquisition of 12 VVIP helicopters, for which a contract was signed back in 2010.

Meanwhile, the BJP on Monday hit out at the Government for not acting swiftly to prosecute all those who received the kickbacks and slammed its failure to identify the bribe-takers.

BJP spokesperson Balbir Punj pointed out that none of the culprits have been brought to book so far. He said that the Government is making vague statements about taking action but doing little in this regard.

The CBI has registered a case against 11 people including retired Air Chief Marshal SP Tyagi for alleged cheating, corruption and criminal conspiracy. It had also carried out searches in at least 14 locations including his home.

Antony’s confirmation of corruption in the copter deal has come at a time when the CBI had received several more documents of critical importance from Italy and the Defence Ministry. It is said that the agency had shared these documents with the Enforcement Directorate.

According to the agency, a part of the Rs 360-crore bribe in the deal could have been routed to people in India through Mauritius and Tunisia. The first information report of the CBI had mentioned names of some cousins of the former Air Chief and two middlemen from Europe among others.

RamaY · Post by **RamaY** » 26 Mar 2013 01:27

^ Anthony sounds 400%.

Shame on Saint AKA.

Sanku · Post by **Sanku** » 01 Apr 2013 19:29

Clearly Tyagi was important part of the conspiracy which resulted in the purchase of the AW heli's, but of course only a part, even CBIs report clearly lays out that he was after all a small fish. Who are the big fishes?

http://ibnlive.in.com/news/former-iaf-c ... 492-3.html

Former IAF chief SP Tyagi got cash for favouring AgustaWestland: CBI

New Delhi: Former Air Chief Marshal (retd) SP Tyagi received cash in return for favouring Anglo-Italian helicopter company AgustaWestland in the controversial Rs 3,600 crore VVIP helicopter deal, the report by Central Bureau of Investigation (CBI), a copy of which is with CNN-IBN, states. The report, however, fails to mention the amount that was paid to the retired Air Chief Marshal and the mode of payment. The report also adds that Tyagi's cousins received nearly 3,26,000 euros during the course of the deal and that around 20 million euros was routed to India through hawala although it is not known who got the bulk of the amount.

The report reiterates that it was during the tenure of Air Chief Marshal SP Tyagi and with his approval that the Indian Air Force conceded to reduce the service ceiling for helicopters from 4500 metres from 6000 metres. The CBI says that till then, the Air Headquarters did not want the ceiling to be reduced as it compromised safety of VVIPs in high altitude areas

The CBI report, however, remains silent on the role of the PMO, the SPG and the Defence Ministry in reducing the ceiling.

Austin · Post by **Austin** » 01 Apr 2013 20:52

AHQ will take orders from PMO and DM , Its not that AHQ on a fine sunny day decides to lower the spec without notifying and taking view from SPG , MOD and PMO as it directly impacts them , even if there is truth in the selective leak that GOI and CBI is now playing to the gallery via media.

I am sure there must be some communication on this matter and that should something CBI must also investigate and revel. The way it is being portrayed via media is Tyagi took all the decision on Westland chopper deal and all the money he made it via his relatives.

Looking at the past experience of CBI which is just an instrument in the hands of ruling party which is a the GOI ,they might make Tyagi look as the primary suspect and few other small players ,the others will just slip through , the main benificary will never be reveled or the case might just drag on for years till it fades out of public memory and ends up being one of the many corruption cases that ends up getting no where.

Surya · Post by **Surya** » 01 Apr 2013 21:36

its a good lesson for all other service chiefs

better to be stick your ground and be hounded out as gen VKS was - then give in and be a small cog and get fried later.

Tyagi compounded the fact by having his relatives be part of the deal.

pentaiah · Post by **pentaiah** » 01 Apr 2013 21:45

Tyagi is one who sacrifices

Tyagi did sacrifice

His honor
His country

All for a few dollars more

I was admonished and banished for suggesting corruption in forces.
I am sad that its all in public now.

Corruption will not end even if everything is made in India, the good thing when every thing is made in India is employment and the bribes will stay in India ok hopefully

ramana · Post by **ramana** » 09 Apr 2013 23:12

X-Post...

anmol wrote:More material from same site:

BJP leaders also a part of the deal

The heat of Italy’s helicopter scam seems to be hitting the BJP camp, too. It is believed that two party leaders, who are also the party spokespersons, have some interest in the Italian company’s competitors, and the both of them have a significant role to play in the matter coming to light and being played up. It is worth remembering that an entire caucus works together when it comes to the buying and selling in defence deals. Of them, a few are retired officials from the army, some politicians, businessman and Turks from the media. Former Army Chief V K Singh had indirectly pointed this out when he held the top army position. It is clear that a certain editor was also lobbying for a particular arms company. And when Singh did not give time to the editor for a meeting, the newspaper editor went against Singh.

anmol · Post by **anmol** » 15 Apr 2013 17:27

A.K. ANTONY NAMED MINISTER OF DEFENSE

Date:

2006 October 26, 13:07 (Thursday)

Classified By: PolCouns Ted Osius for reasons 1.4 (B,D)

1. (U) In an October 23 cabinet reshuffle, President of India
A.P.J. Abdul Kalam named Former Chief Minister of Kerala A.K.
Antony Minister of Defense. See paragraphs 3-7 for
biographical information on Antony.

2. (C) Our sources tell us that Congress Party President
Sonia Gandhi and PM Singh needed to get Pranab Mukherjee out
of his post as Minister of Defense because he was not
sufficiently zealous in raising funds for the party.
Mukherjee finally accepted the move after receiving
reassurances that he would remain in charge of the many
Ministerial Committees that help him maintain his domestic
power base. The shift of Mukherjee to External Affairs left
open the post of Minister of Defense, which A.K. Antony
accepted. Antony's opponents question his ability to thrive
in this high level, high profile position. His reputation
for integrity is expected to slow down pending deals, as
Antony learns the ropes and carefully examines all contracts,
including pending arms deals with the U.S. Antony will bring
much needed probity to defense acquisitions just before a
large number of big deals are about to be considered.
However, Antony faces a tough challenge since he will be
functioning under the shadow of Mukherjee and under pressure
from the heads of the army, navy, and air force, all of whom
want to replace dated equipment. Managing these
personalities will be a challenge for Antony.

----------------------------
A Politician with Integrity
----------------------------

3. (SBU) A former Chief Minister of Kerala, A. K. Antony is a
popular Congress leader in South India with a reputation for
honesty and integrity. A member of the Congress Working
Committee (the party,s highest decision making body) in
charge of Karnataka affairs, Antony is close to Congress
chief Sonia Gandhi, and one of her key advisors and her main
strategist in South Indian politics.

4. (SBU) A popular political activist since his student days,
Antony rose quickly in the Congress party, as president of
the Kerala University Student,s Union, a wing of the
Congress Party. He later headed the Kerala Pradesh Youth
Congress and the Kerala Pradesh Congress Committee. At age
37, Anthony was named the youngest ever Chief Minister of
Kerala in 1977. Refusing to back Indira Gandhi,s Congress
leadership during the Emergency, Anthony resigned to support
a "Third Force8 coalition of non-Congress left and
democratic parties. He was readmitted into Congress in 1982.

5. (C) Rajiv Gandhi admired Antony,s clean image and
appointed him General Secretary of the All India Congress
Committee and later, President of the Kerala Congress.
Antony won a seat to the Rajya Sabha in 1985 and again in
1991. In 1993 Prime Minister Rao named him Minister for
Civil Supplies. Antony resigned in 1994 to protest
allegations of Ministry inefficiency. In 1995, Rao again
appointed him Kerala Chief Minister, a position he held until
1996. In 2000 Antony led the party to victory in Kerala
elections to become Chief Minister in his own right. He had

NEW DELHI 00007358 002 OF 002

to step down in 2004, however, due to inner party conflicts.

--------------------
An Economic Reformer with Limitations
--------------------

6. (C) After Antony led the Congress return to power in
Kerala in 2001, the media characterized him as a "born again"
economic reformer who endorsed free-market policies. The
bold nature of some of his policies took many by surprise,
given his previous socialist track record. At the beginning
of his tenure as Chief Minister, Antony initiated reforms to
"change Kerala's (leftist) mindset." Even cynics applauded
when in March 2002, Antony enforced fiscal discipline,
defeating a 32 day government employees' strike that demanded
reinstatement of unaffordable perks. Antony's determination
to carry out an Asian Development Bank-aided "Modernization
of Government Plan" was another indicator of his commitment
to economic reform. He also liberalized education by
allowing several private engineering and medical colleges to
open in Kerala and championed the state as an investment
destination. His push for legislation to curb strident labor
demands won him immense middle class support.

7. (C) Antony has at various points in his career succumbed
to Leftist pressure and the demands of his constituents, for
example ordering the closure of the Kerala Coca Cola plant in
2004 citing drought and the non-availability of drinking
water.

--------------------
Personal Background
--------------------

6. (C) Born December 28, 1940 to a middle class Christian
family in Chertalai near Alleppy, Antony earned a B.A. and
B.L. (Bachelor of Law) from Kerala University. A professed
atheist, Antony keeps a distance from the Roman Catholic
Church, to which his family traditionally belongs. When he
was a boy, his father had a property dispute with a local
Catholic Church. As a result, the Church later refused to
give Antony's father ceremonial burial in the church
cemetery, triggering Antony's skepticism. Earlier in his
career, he consistently questioned the Church's motives in
education and advocated greater government oversight. In
recent years, his opposition to the Church has waned. His
wife Elizabeth is a devout Catholic who works at Canara Bank.
They have two sons, Anil and Ajit, both students.

7. (C) Antony has traveled to Japan, France, the UK, the
former USSR, and Yugoslavia. He refused an International
Visitor (IV) grant offer from the USG in the 1980s, anxious
to avoid leftist criticism. In meetings, Antony comes across
as soft-spoken, serious, and unassuming. Always clad in
cottage-spun Khadi (handspun cotton), dhoti, and shirt, his
appearance reflects his "Gandhian simplicity." Antony has
been frugal with time and hospitality, has preferred short
meetings, and usually avoids offering visitors the customary
coffee and snacks. His English is basic, adequate for
substantive conversation related to his work, but not good
enough for small talk.
PYATT

Sanku · Post by **Sanku** » 23 Apr 2013 22:24

From rediff

15:12 VVIP chopper deal: CBI freezes ex-air chief's accounts: The CBI has frozen accounts of all the accused, including air force chief SP Tyagi, in the VVIP chopper deal. The CBI, which has charged former air force chief SP Tyagi with corruption and conspiracy in the VVIP chopper deal, has said in its First Information Report (FIR) that he and his three cousins were bribed 4,26,000 euros or Rs. 2.98 crore to swing the contract for AugustaWestland. The FIR mentions as evidence a letter written by the retired air chief marshal in 2005, in which he allegedly approved scaling down the flying height of the helicopters from 18,000 feet to 15,000 feet.

Austin · Post by **Austin** » 28 Apr 2013 20:26

VVIP chopper deal: Singling out an individual is wrong

In the ongoing investigation of bribery and corruption in the VVIP helicopter deal, the Central Bureau of Investigation, or CBI, appears to have made up its mind that the then Indian Air Force (IAF) chief, Air Chief Marshal S.P. Tyagi, was instrumental in swinging the deal in favour of AgustaWestland.

News reports attributed to CBI sources imply that technical requirements were tweaked by the then air chief to enable the Italian helicopter AW101 to emerge as the winner in the contested deal.

As was to be expected, the Indian media, especially electronic - went hoarse in the throat and wild in gestures - and continues to do so - to expose the erstwhile chief without bothering to look at the whole episode in a holistic and professional manner. Whether guilty or not, in the eyes of the nation, he is already damned.

There are two major aspects of the 'deal' which need to be probed thoroughly before arriving at any conclusion. One, whether the erstwhile chief could and/or did influence the laying down of the SQRs (Service Qualifying Requirements) to enable the selection of any particular helicopter. And, two, whether there was a case of illegal transaction of money favouring some middlemen and individuals who claimed to have the wherewithal to swing the deal in a particular direction.

Allegations have indeed emerged in Italy that Italian/ European businessmen raised bribe money and paid it to top officials of Finmeccanica, the company which owns the British AgustaWestland, and some Indian businessmen. A probe is on in Europe based on communication intercepts and accounting paperwork the middlemen had prepared for their own requirements.

Soon after the scandal broke out, the Indian Ministry of Defence (MOD) issued a Fact Sheet on February 14, 2013 on the chronology of the important procedural milestones of the deal. The MOD deserves credit for not hiding behind the facade of secrecy and putting the facts in public domain, but where it failed was to assure the people that its defence procurement systems are robust enough not to be influenced by any one individual irrespective of the rank or status he may wield.

In the midst of all the cacophonous accusations hitting the ceiling was just a lone voice of sanity, that of former defence and external affairs minister Jaswant Singh, when he remarked:, "We should not make wild allegations against a former air chief. It is not in the interest of both the Air Force and the country. The probe is on. Let's wait."

A distinguished soldier and an able statesman, he understood well the destruction such media hype can cause to the very fabric of the armed forces.Nonetheless, due to the media trial, MOD referred the case to CBI, the country's prime investigating agency.

At this stage, it would perhaps be prudent to chronologically look at the various events as revealed by the MOD fact sheet which finally led to the selection of the AW101 as the helicopter of choice for induction into the IAF. It reveals that an acquisition process for VVIP helicopters commenced in March 2002 and culminated in the EC-225 of M/S Eurocopter being found the sole helicopter suitable for acquisition, after flight evaluation of the three out of the four vendors who had responded to the RFP.

At that time, the EH-101 (or AW101) of AgustaWestland, or any other VIP helicopter (barring the EC-225), was not certified for an altitude of 6,000 meters.

In November 2003, the then National Security Advisor (NSA) and the principal secretary to the prime minister convened a meeting voicing concern that the mandatory requirements stipulated by the IAF had resulted in a single vendor situation. It was also noted that the prime minister and president have rarely made visits to places located beyond 4,500 meter altitude.

The meeting decided to modify the mandatory altitude requirement to 4.5 km whilst leaving the 6 km altitude to be desirable. Security officials from the Special Protection Group (SPG) that guards the VVIPs asked for a minimum cabin height of 1.8 metre to facilitate rescue movement in case of an emergency. Notably, police and intelligence officials protecting the VVIPs are generally tall. SPG is controlled by the PMO (Prime Minister's Office).

In the words of the MOD, "In pursuance of the above directive, the ORs (Operational Requirements) were deliberated at length between the NSA, SPG/PMO, MOD and the IAF between March, 2005 and September, 2006 and the above-mentioned changes were incorporated."

In addition, after further deliberations between the aforesaid agencies the quantity of helicopters proposed for procurement was revised from 8 to 12 by adding 4 helicopters in non-VIP configuration for security reasons. IAF's VIP Squadron has had 8 helicopters generally.

It seems clear that the newly introduced cabin height parameter of 1.8 metre becoming a mandatory requirement could have played a major role forcing Eurocopter to leave the scene without responding to the new RFP issued on September 27, 2006.

While chronicling the various steps till the conclusion of contract awarded to AgustaWestland on January 18, 2010, the MOD insists that the procurement case was progressed in accordance with established procurement procedure with all stages of procurement being followed meticulously, it is silent on whether the entire SQR process was revisited as per the procurement procedure.

It is obvious that critics have homed on to this lack of information to base their speculations that the process was misused by someone to select a 'favoured' vendor. The media, and the CBI, seem to have lost no time in latching on to the erstwhile chief, during whose tenure the revised RFP was issued, to be the man responsible for tweaking the SQRs/ORs for pecuniary gains.

But, without overly commenting on the cumbersomeness of the defence procurement procedure, what stands out clearly is that no single individual can influence the outcome of a defence deal on his/her own.

India Strategic has had some access to the documents showing how the new SQRs were debated in a final meeting, held before the issuance of the revised RFP. It is clear that all the new parameters were agreed to unanimously - one by one - by the representatives of all the agencies mentioned earlier, and that while IAF was represented by top officers at this meeting, the air chief himself was not there.

Simply put, the decision was collective, unanimous, and signed by each participant in agreement.

The new parameters included the minimum cabin height of 1.8 metre (propagated by the SPG for security reasons), a drift-down down altitude with one engine inoperative of not less than 1,500 metres (for reasons of VVIP safety) and, of course the earlier agreed to lower service ceiling of 4,500 meters, among others.

After the Field Evaluation Trials that followed, the Staff Evaluation Report concluded that only AW101 helicopter was fully compliant with all SQRs based on which, AgustaWestland was finally awarded the contract to supply 12 (8 VVIP-configured and 4 non-VVIP) AW101 helicopters to the IAF at a negotiated price of Euro 556.262 million.

It may also be kept in mind that similar trials in the US also had led to the selection of AW 101 just around then.

Now that a bribery scandal connected with the deal has broken out, everyone seems to be baying for the blood of a lone individual, as also for outright cancellation of the VVIP helicopter deal. In the opinion of the writer, it is nothing but a knee-jerk reaction on both counts.

As brought out in the March Edition of India Strategic, it would be foolhardy to cancel the entire contract at this advanced stage of execution. The quality of the helicopter should be kept in mind which undoubtedly crowns it to be the top-notch helicopter in the world for VVIP travel.

And, while all possible penalties should be levied on the errant company as per the provisions of the contract, blacklisting of the companies, as India has been doing, will prove to be counter-productive to the much-needed, ongoing and massive modernisation programmes of the armed forces.

Similarly, singling out one particular individual for the entire selection process could prove to be counter-productive.

The investigating agencies need to do the right thing by getting to the bottom of the case and bring to book anyone and everyone involved, but not on the basis of knee-jerk reactions and media trials.

The investigation should not end up by destroying the reputation and morale of only the services and servicemen, while the real arms agents move on to the next deal and the real perpetrators and hidden beneficiaries continue to flourish as usual.

(26.04.2013 - Air Marshal (retd) Jimmy Bhatia, a former head of the IAF's Western Command, is managing editor of India Strategic defence magazine. The views expressed are personal and not of IANS. He can be contacted at jimmy.bhatia@indiastrategic.in)

Austin · Post by **Austin** » 29 Apr 2013 23:16

Where has all the money gone?

It was the summer of 1999. From May 26 to July 26, the road to war-torn Kargil from Leh was crisscrossed by the tyre treads of Tatra trucks carrying the Indian Army’s 410 155mm Bofors howitzers on their way to the mountainous war front where scores of Indian soldiers were fighting to recapture the heights of Batalik, Tololing and Tiger Hill where Pakistani irregulars had dug into bunkers. The key heights of the Kargil sector at 16,000 feet to 18,000 feet were under their control. The Indian Army’s answer was the controversial Bofors gun, with its 35-km range, which became its primary weapon to bombard enemy positions relentlessly. The Artillery had even struck upon a new strategy, by changing the angle of the guns to fire more effectively—a manoeuvre that has found its way into US military manuals. The Bofors howitzers were one of the primary factors in India winning the war. Firing three rounds in 12 seconds, they pounded the enemy ceaselessly for nearly two months, as the Indian infantry mounted attacks on the mountain slopes where the ice had melted in summer. But a decade before the war, the artillery of politics over Bofors kickbacks from Swedish arms manufacturer AB Bofors had opened up on the Rajiv Gandhi government, causing it to fall in 1989. The shadows of Sweden came back to haunt the Congress party last week, with allegations surfacing over other deals that allegedly involved corruption by members of the Gandhi family. But the collateral damage was the guns that ironically won the war 10 years later. After the kickbacks controversy erupted, further purchase of Bofors guns and their much-needed spare parts were abandoned.

“If not for the Bofors guns, the infantrymen’s task of dislodging the enemy from their bunkers would have been an uphill task, pun intended,” explains an Indian Army artillery officer from the 8th Division that mans the Kargil sector now.

But the guns, inducted into the Indian Army in the late 1980s, were old. In the age of technological advancement in artillery, they had become almost obsolete.

“After Kargil, they again proved their mettle in 2001 during Operation Parakram, following the December 13 terror attacks on Indian Parliament,” the senior officer adds.

The contract signed in 1986 stipulated technology transfer to Indian ordnance factories. Strangely, it took another 14 years after Kargil for the establishment to wake up and realise that they had the capacity to manufacture the guns and parts. Work has just begun.

KICKBACKS AND FALLBACKS

India’s arms purchase scenario is full of bizarre irony. India is the world’s largest arms importer accounting for over 10 per cent of the world’s arms imports. It has spent `6 lakh crore on buying weaponry in the last 12 years. It needs modern fighter jets, aircraft carriers, submarines, light helicopters, attack helicopters, midair refuelers, radars, rifles, high altitude and mountain warfare equipment, artillery guns, battle tanks and more. The Rafale deal to purchase 126 combat planes has fallen under a shadow over differences between the Indian government and Dassault Aviation over HAL’s role in executing part of the contract. The aircraft carrier Gorshkov, bought from the Russians for Rs 12,000 crore, has crossed its delivery deadline. India’s indigenous aircraft carrier has been delayed by over four years. The Scorpene submarine delivery—that had come under a cloud of scandal and corruption—has been lagging behind by three years. The replacement tenders for INSAS rifles is yet to happen, after infantry complained about their poor quality. The much-lauded Arjun tanks have not got off the drawing board in spite of Rs 300 crore spent on R&D. As a result India is buying more T-90s from Russia. Of the many types of artillery required—155mm 53-calibre towed-guns numbering 1,180, 180 155mm 52-calibre wheeled self-propelled guns, 100 155mm 52-calibre tracked self-propelled guns and 145 ultra light howitzers—only the purchase of the last has been cleared. Though the nod came about a year ago, there is no traction on the part of the Ministry of Defence (MoD) to move ahead. After the Bofors fiasco, the Army has not bought even a single artillery gun since late 1980s.

In the last two Five-Year Plan periods beginning 2002-03 and ending in 2011-12, the Indian defence budget has grown two-and-a-half times—from Rs 65,000 crore in 2002-03 to Rs 1,64,415.49 crore in 2011-12. India had spent at least Rs 4 lakh crore on capital acquisitions during this period. Still, a huge gap exists between defence procurement strategy and reality. There are several critical areas of the Army, Navy and the Indian Air Force (IAF) that go begging when it comes to induction of new equipment.

The reasons for the delay are mainly bureaucratic red tape. While the global average for finalising a tender is three years, India takes a minimum of five years. At a meeting of the Cabinet Committee on Security (CCS) chaired by Prime Minister Manmohan Singh on January 8, 2010 and attended by Defence Minister A K Antony and then Finance Minister Pranab Mukherjee, two key defence acquisitions for the IAF were considered—the now graft-tainted VVIP helicopters from AgustaWestland, and Airbus A-330 MRTT tanker planes. While the CCS returned the file on the tanker purchase that was more important from the operational readiness point of view, citing the finance ministry’s objections to the cost of the aircraft, the VVIP choppers were cleared.

Even the most frivolous of corruption complaints could slow down the tendering process by at least six months when investigations take place.

“It took 15 long years for the Indian government to recover from the shock of the Bofors scandal. The adverse fallout of the scams are the loss of credibility of the top leadership of the services among the troops and the public; ban on a defaulting company that is likely to affect other major projects, thereby delaying modernisation and further slowdown in decision-making by bureaucrats, which is the worst factor,” says Major General Mrinal Suman, an expert on defence procurement policies and practices.

RED TAPE, SCANDALS DELAY BUYING BOOM

In March 2012, the then Indian Army chief General V K Singh wrote to Prime Minister Singh on the deficiencies faced by his force in its war-fighting capabilities. That letter was leaked to the media and this created a huge political furore.

Of particular significance in General Singh’s letter was the huge gaps in the artillery wing of the Army, which is urgently in need of four types of guns to replace its ageing inventory, which is already in the last stage of obsolescence. New guns are required by the Army to replace its 1970s vintage guns of 105mm, 122mm and 130mm calibre. As a knee jerk response, a Defence Acquisition Council (DAC) met under Antony in May last year to fast-track the purchase of 145 ultra light howitzers from the US in a government-to-government deal worth Rs 3,000 crore. The ultra light howitzer procurement was pending for nearly a decade prior. These howitzers, which can be airlifted for quick insertion, are required by the Army’s mountain warfare units for deployment in high altitude terrains such as in Arunachal Pradesh and Ladakh. The Army has a plan worth Rs 25,000 crore to modernise its artillery, comprising 190 units. The delay was thanks to a bribery scam involving the Ordnance Factory Board. For the towed artillery guns procurement, the Army floated tenders twice—in 2002 and in 2007. In the first attempt, all three competitors—BAE

Systems, Soltam and Denel—failed to meet the requirements. In the second, bribery charges killed the tender in November 2009 after only one competitor was left in the race. It is a no-go in Indian defence tenders if only one vendor is left in the competition.

FLYING LOW THROUGH SCAM CLOUDS

The Army currently has about 150 Chetaks and Cheetahs, while the IAF has 75. Together, they need 384 Light Utility Helicopters (LUHs). Apart from the 197 LUHs to be procured from abroad, the Hindustan Aeronautics Limited (HAL) is to supply 187 machines under a July 2008 order. The Navy needs 75 LUHs for its aviation fleet and has issued a tender last year.

The 2007 tender for the 197 LUHs is on the verge of being scrapped after the role of serving Brigadier V S Saini in seeking a bribe from AgustaWestland came to the fore.

(Former IAF chief S P Tyagi and relatives are embroiled in a scam on the purchase of VVIP helicopters from the same company.) Indian Army chief General Bikram Singh told a MoD panel on April 2 that a decision on the `15,000-crore LUHs tender should be taken only after a probe has been conducted into the allegations against Saini. Of the 197, 133 machines were for the Indian Army’s Aviation Corps, while 64 were for the IAF. These helicopters provide air support and give a link to Indian troops posted in high altitude areas besides carrying out casualty evacuation roles in the icy heights of Siachen.

In a report presented to Parliament last month, the Public Accounts Committee (PAC) noted that the MoD had shown “no sense of urgency” to either finalise manufacturing of the LUHs by HAL or fast-track procurement from overseas.

Meanwhile, replacements for its Chetaks and Cheetahs have been jinxed since the first time the MoD issued a tender in 2003. It was cancelled in December 2007 after the helicopter from the chosen firm, Eurocopter, did not meet evaluation standards.

Combat Planes: India urgently requires 126 new medium multi-role combat aircraft (MMRCA) to replace its ageing and perilous 1960s vintage Soviet-origin MiG-21 fighter jets; but even after six years of tender, the ministry is not even close to signing the contract with French Dassault Aviation which won the bid in January 2012. The deal is worth nearly `1 lakh crore with delays adding costs to the initial `42,000-crore price. India bought combat jets last in 1997—Russian Sukhois. The 50-plane deal, struck when Samajwadi Party chief Mulayam Singh Yadav was the defence minister, has now grown into a 272-plane contract, with HAL being the manufacturing agency in India for 222 planes. India bought its first MiG-21 in 1966 and since then, it had picked up 872 from the MiG’s stable, including the MiG-23, MiG-25, MiG-27 and the MiG-29s. Of these, 485 have been lost in various mishaps.

The IAF has been forced to go in for the MMRCA tender, described as the ‘mother of all deals’, due to delays in the Defence Research and Development Organisation (DRDO)’s Light Combat Aircraft (LCA) project, which has taken 30 years and Rs 11,000 crore to achieve Initial Operational Clearance—that too only likely in a year or two. The IAF had already placed an order for 40 LCAs with American GE404 engines, and another 100 LCAs with a more powerful GE414 engines in anticipation. If the LCA is delayed any further, the IAF may have to order 63 MMRCA planes more. These delays have led to the IAF’s combat squadron strength coming down to around 30, from its sanctioned strength of 39 squadrons.

Attack Helicopters: The IAF attack helicopters fleet of Mi-25/35 is meant to get a boost in the next two years with the selection of US aerospace major Boeing’s AH-64D Apache Longbow advanced gunship as the future platform. But the wait for the contract to be signed is only getting longer. Apache had won the tender, issued in 2009, beating the Russian Mi-28N Night Hunter. The initial contract may be signed this financial year, after July 2013. At present, the Indian government is negotiating with Boeing on the cost of the 22 Apaches, though the government has already indicated that the price for these helicopters will be upwards of Rs 7,000 crore. AH-64D Apache Longbow is radar-equipped and has long-range weapons accuracy and all-weather/night fighting capabilities. It can detect moving or stationary objects without being detected. It can classify and threat-prioritise 128 targets in less than a minute. It possesses integrated sensors, networking, and digital communications for situational awareness, management of the combat arena in real time, and digital transmission of images and target locations to joint operations battlefield commanders. It has seen action and successful missions in America’s War on Terror in Afghanistan. The twin-engine tandem seat Apache is operated by two pilots, and can execute an attack within 30 seconds of an alert. Apache has a strong shell made of composite fibres to protect the pilots and sensitive components from bullets.

The IAF needs these machines for combat air patrol for Army troops thrusting forward into enemy territory. They are a key component of the army’s three sword arm strike corps, though the Indian Army Aviation Corps plans to have at least one squadron of attack helicopters for all its 13 existing corps and a future mountain corps.

Heavy Lift Helicopters: Boeing’s Chinook CH-47F helicopter has been chosen by the IAF, which needs 15 helicopters in addition to its Russian Mi-26. The cost could be upwards of Rs 5,000 crore, according to MoD officials. The Chinook’s primary mission is to move troops, artillery, ammunition, fuel, water, barrier materials, supplies and equipment on the battlefield. Its secondary mission includes medical evacuation, disaster relief, search and rescue, aircraft recovery, fire fighting, parachute drops, heavy construction and civil development.

SO FAR SO BAD

The Indian Army has half-a-million rifles and carbines it doesn’t want, and plans to junk them all in the next five years. The dark lining is that these were made in India for its four lakh soldiers at a cost of Rs 25,000 crore, over two decades. So far so bad. Rs 50,000 crore more will have to be spent over the next decade to re-equip soldiers with the four kinds of weapons that are the key to the Army’s ‘Future Infantry Soldier as a System’ programme. The DRDO-developed the INSAS (Indian Small Arms System), as per specific requirements the Army, formulated in the late eighties. After the usual delays, the weapons were first seen with Army uniforms only on Republic Day 1998. They were first put to test in the Kargil War. A spate of complaints about malfunctioning and the quality of the rifle poured out of the Himalayan battlefields. The rifles jammed, their polymer magazines cracked in the cold weather and the gun would go full automatic only when set for a three-round burst. The soldiers wanted their 7.62s back. The glitches were fixed, but advances in firearms technology had rendered INSAS redundant in a rapidly modernising Army. According to Lt. Gen. (Retd) P C Katoch, a Parachute Regiment officer, the INSAS was “not the best” of weapons.

India has now issued tenders for standard rifles and carbines and is in the process of issuing tenders for light machine guns and sniper rifles, thus completing the basic infantry quartet of small arms. Another senior serving officer said on condition of anonymity that the development of new weapons “is not possible in a jiffy”.

AT SEA

Aircraft Carriers: In an informal chat with reporters in 2012, the then Navy chief Admiral Nirmal Verma had proudly proclaimed that his force would soon be operating Carrier Battle Groups, a flotilla that was almost invincible in maritime warfare. His proclamation was based on India’s plans to have at least three fully operational aircraft carriers this year—INS Viraat, INS Vikramaditya and INS Vikrant.

The Navy has flogged INS Viraat, the 54-year-old former British Royal Navy’s ‘Hermes’, for over 25 years now since it was acquired in the late 1980s. But the ship has returned to the Cochin Shipyard for its refit programme and will be away from action for at least six months to a year. The planned acquisition of INS Vikramaditya—the erstwhile Russian Navy’s Admiral Gorshkov—and the Indigenous Aircraft Carrier (IAC), which is under construction at the Cochin Shipyard, are delayed further. Vikramaditya’s boilers had malfunctioned during its trial late last year. The Sevmash Shipyard in Russia has taken the 45,000-tonne warship back for repairs. The price has been hiked to Rs 12,000 crore from Rs 5,000 crore—the original cost in 2004. IAC, or INS Vikrant, is delayed now by four years from its originally fixed delivery schedule of 2014 and is now expected only by 2018. The delay was caused by the problems relating to the supply of gearboxes and other key equipment.

Submarines: Since the time the Chinese Navy ventured into the Indian Ocean Region with two of its Destroyer ships on anti-piracy patrols in the Gulf of Aden in 2008, the need for the Indian Navy to shore up its already-precariously low fleet of 14 conventional and one nuclear-powered submarine has been strongly felt. A recent report submitted by the Navy to the MoD has pointed out that on 22 occasions in 2012, world navies spotted Chinese submarines in the Indian Ocean region. [The Peoples Liberation Army (Navy) has 60 conventional and 10 nuclear-powered submarines]. Yet, MoD mandarins are sitting over a Rs 50,000-crore government approval for a new six-vessel fleet under Project 75I cleared in 2012, which will lapse soon. India currently has 14 diesel-electric submarines—10 Russian-origin Kilo class vessels and four HDW German-origin vessels—apart from one nuclear-powered vessel, INS Chakra, borrowed from Russia on a 10-year lease in 2012. “Pakistan is nowhere near the Indian submarine fleet strength and has only eight conventional submarines. But the threat from Chinese subs is greater now than ever before and is likely to only increase in the years to come,” says an Indian Navy officer.

The Navy is worried that its submarine strength will fall by 30 per cent from its existing strength by 2015 and by 50 per cent by 2020, if the delay in buying new vessels continues. The existing project to build six Scorpene submarines for the Navy at the Mumbai-based Mazagon Docks Limited has hit snags due to procedural time overruns. The cost of the project approved in September 2005 at Rs 18,798 crore stood revised to Rs 23,562 crore in February 2010. Now, the delivery schedule has been revised to 2015.

Usually, a submarine performs best in the first 20 years of its life. The existing fleet of Kilo class and HDW class were inducted into the Navy in 1986. Yet, the Navy has no plans to cashier them. India has a 30-year plan period to induct 24 new submarines—approved by the CCS in 1999 when the NDA government was in power. But not one has been inducted.

With corruption and red tape haunting defence purchases, the security of India is being threatened at the taxpayers’ expense.

member_25399 · Post by **member_25399** » 12 Jun 2013 10:26

Not sure whether the correct page to post it... but it mentions the link between Abhishek Verma and Tytler and to some extent the privileged family.
http://www.indianexpress.com/news/tytle ... i/1128010/

ramana · Post by **ramana** » 13 Jun 2013 03:20

So whatever happend to all those weapons shortages Gen VK Singh was writing to MMS about? Any action to refute them or fufill the backlog?

Karan M · Post by **Karan M** » 13 Jun 2013 04:32

Ramana, we are buying loads of ammo, especially for the tanks which fall into two categories. Near obsolete FSAPDS from Russia (because IMI is banned & their TOT turned out to be a farce anyway) and huge numbers of silver bullet Refleks missiles (the hope is that if the FSAPDS does not work against heavy ERA equipped T-80s, the t-90 Refleks will). FSAPD are to equip the T-90 and T-72 fleet. Army in its usual mix of hubris and imports will do the trick mindset, let the DRDO proposal to build a MK2 version of their original 125mm FSAPDS languish. The reasons cited was that MK1 did not perform well. One, because OFB imported Russian propellant for some batches & that failed; in other cases the packaging was not strong enough - these are Combustible Cased Cellulose rounds, and when exposed in the heat, the propellant leaked, and a couple of rounds exploded within the tanks. The storage was also to blame, but the round took the flack in entirety.
Even though the issue was eventually resolved, the Army cited the next IMI 125mm round FSAPDS on offer as having better performance and asked for its TOT at OFB, and effectively killed the development of the local round. And the TOT turned out to be a joke. IMI basically would send over the Tungsten blanks, OFB was to machine them and assemble them into the two piece rounds, which would then be supplied as "indigenous" to the Army. That never happened, and IMI's TOT has not been satisfactory in tank ammo for at least one more international customer. Of course, then the corruption at OFB issue hit, and the vendor got blacklisted, so now no more rounds from Israel, and India went running back to Russia for near obsolete FSAPDS (all the fancy rounds shown by Russian firms in brochures are not in series production) for the T-90s. The Russians are salivating, because given how Army reserves have dipped (the IA never got off into inducting enough practise rounds let alone gunnery sims for the T-90s), even this round will be license produced at OFB. Its a round inducted in the 90's and will struggle against heavy armor. Hence BDL is to make thousands of INVAR/Refleks missiles as a possible solution.

After all this mess became clear, the DRDO project was again dusted off a couple of years back, and a MK-2 round developed was finally put into trials (Army was reluctant to trial the round, but finally did, and gave their reccomendations, which are to be incorporated into the MK-2). The Army has also asked for performance beyond the MK-2 round, and this round whether MK-2 improved or MK-3, now is in development, as the final/only choice available to us for getting an improved FSAPDS to our tank fleet. Note the other WW FSAPDS manufacturer (tungsten) Rheinmetall is also blacklisted. The good news is that by not cutting off the FSAPDS development, a local alternative will be available.

On the other fronts, the Army is also buying 2 regiments of Akash, but also got clearance for a lighter QRSAM and MRSAM programs for a parallel acquisition (they want compact groups to accompany the multiple IBGs planned apparently). Multiple systems are on offer. As with all things Army, expect trials to drag on and on and on.

With the T-tanks, we purchased a few hundred more TISAS systems, so we should have around 500-700 T-72s with TI for night blindness. Note TISAS is a drop in TI for the FCS, referred to as an elbow FCS and wont confer full advanced FCS capability. By now we should have some 500 odd T-90s, these too come with TIs but faced significant issues in heat, so some local jugaad was being done to keep them operational. Another 110 odd Arjuns with proper TI.

The F-INSAS program is doddering along, in terms of networking, some systems have made progress others havent. We still dont have mass across the board procurement of common TI systems, though they are there at the overall unit level.

Plus, new rifles & ammo (killing INSAS) are on the way..

Army procurement is arguably, the most bureaucratic and least transparent amongst the three services. Delay is common and the haphazard rule making means vendors can often stall the deal by citing the complaints.
Overall IA modernization continues, but its in bits and pieces and not anywhere as substantial as that of the Navy or AF in terms of rapidly rolling out capabilities with disruptive impact.

member_26965 · Post by **member_26965** » 18 Jun 2013 16:29

It seems there is no CD. Only Generals hand written notes. No aide was present

VK Singh yet to give proof, bribe case stuck

http://www.hindustantimes.com/India-new ... 77475.aspx

Ganesh_S · Post by **Ganesh_S** » 31 Jul 2013 20:27

That violation, now under investigation, is dwarfed in the IAF’s purchase of the Pilatus PC-7 Mark II basic trainer aircraft (BTA), where at least 12 benchmarks were changed between March and October 2009, including some relating to pilot safety. These allowed the PC-7 Mark II, fielded by Swiss company Pilatus, to qualify and win an IAF order worth $640 million (Rs 3,780 crore) for 75 BTA.

Business Standard is in possession of the documents relating to this case. Asked for comments, the IAF has chosen not to respond

http://www.business-standard.com/articl ... 068_1.html

kshirin · Post by **kshirin** » 05 Aug 2013 00:16

I have to rub my eyes when Indians run down their own product!!! Isnt development cost a small price to pay for building our own capabilities? Are we not prepared to make this investment? China is fast catching up with West (they have developed additive manufacturing already!! 3D priting!) precisely by FOCUSING ON DEVELOPING DOMESTIC CAPABILITIES. National security cannot be built on the basis of foreign products.

http://www.ndtv.com/video/player/the-bu ... o-featured

suryag · Post by **suryag** » 06 Aug 2013 00:16

development cost is not the right stick to beat HAL, when you can give out money on NREGA with no tangible outcomes cant you not spend money on dev ? Eventually the money spent stays in the country and creates more employment, it doesnt need a degree on science or economics to understand this

Austin · Post by **Austin** » 09 Aug 2013 10:49

CAG questions role of top MoD official in deal with tainted firm

In a strong indictment of a top bureaucrat of the Defence Ministry, an audit report has said rules were bent to award a Rs 500-crore contract to tainted defence firm Rheinmetall AD (RAD) that is currently under the scanner for not only bribing officials but also hiring a middleman to get it off an government blacklist.

The CAG has come down heavily against IAS officer Satyajeet Rajan, who served as the Joint Secretary (Electronic Systems) in the MoD between 2007 and 2012 for giving permission to public sector unit BEL to strike a multi crore deal with the tainted company despite a CBI recommendation for it to be blacklisted.

Incidentally, a separate CBI probe is under 0way against the same company for hiring a middleman and bribing officials to get it off the formal blacklist of the government. This new case was registered by the CBI in 2012 after allegations surfaced that arms dealer Abhishek Verma was involved in the deal.

The CAG has come down hard on the decision to award RAD a contract to manufacture and upgrade gun fire control systems by BEL, signed in September 2010, despite the fact that the CBI had recommended a blacklisting of the firm in August. The blacklisting recommendation had come for allegations that the foreign firm gave kickbacks to a former Director General Ordnance Factories (DGOF) and all dealing with it had been frozen since 2009.

The deal was signed after the recommendation of the IAS officer who ruled that the contract could be signed as the firm had not been 'formally' blacklisted in September 2010, thus going against the government stand that no deals were to be signed with RAD.

"MoD had frozen business with RAD after it was named by the CBI in a case of allegation of kickbacks received from RAD by a former DGOF in May 2009. Therefore, the Joint Secretary's communication of September 2010 allowing BEL to take action regarding procurement from RAD as deemed appropriate was inappropriate," the CAG report says.

As a result of the signing of the contract, BEL blocked over Rs 500 crore of its money as a formal decision to cancel the contract was taken in November 2012. "BEL's funds of Rs 502 crore had been blocked for an indefinite period," CAG has said.

It may be recalled that arms dealer Abhishek Verma is facing charges that RAD paid him 530000 euros to allegedly get its name off the banned list. The money was paid to Ganton USA on January 31, 2011. RAD was one of the frontrunnerss to provide new anti aircraft guns to the Army before it was blacklisted.

Philip · Post by **Philip** » 13 Aug 2013 17:06

Breaking news,Times Now channel,CAG report alleges that the AW scam involved kickbasks to the tune of "1000 crores" and also involved the PMO.

As mentioned earlier,while the US pres. cancelled his order for VVIP helos as being too costly,we ordered 12,4 times as much,plus at a higher cost than the US!

Meanwhile,prices of onions are going to cost 100rs/kilo! 70/kilo in B'lore right now.As the old saying goes,if you don't "know your onions",face the music come the hustings.

vic · Post by **vic** » 13 Aug 2013 19:37

If anybody remembers that DRDO was trying to develop an Air Defense Gun and Army changed the specifications 9 times in 10 years to kill the project. During that time RAD was trying to push its Revolver Cannon and the specifications were tailered that only RAD could succeed just like specifications were tailored for PC-7.

nawabs · Post by **nawabs** » 14 Aug 2013 20:47

Scuttling the future

http://newsinsight.net/Scuttlingthefutu ... age=page-1

The loss of INS Sindhurakshak to accident or sabotage reflects in a sense the sinking fortunes of the country under ten years of United Progressive Alliance rule. With the likely death of the 18 officers and men on board the ill-fated submarine, India can scarcely be in celebratory humour at tomorrow’s Independence Day anniversary, and to the naval tragedy must be joined the earlier murder of five Indian soldiers by Pakistani troops in Poonch. Never has the nation felt as demoralized, humiliated and hopeless as now, and Sonia Gandhi and Manmohan Singh squarely must take blame for heaving India to the bottom.

As the rare “silent service”, the submarine arm constitutes the country’s last line of defence. It is obviously the most critical leg of the deterrent nuclear triad, but even in a conventional role, its contribution to strategic defence is unequalled. Since the end of the Falklands War in 1982 and especially with the termination of the Cold War, forward-looking navies have begun to cut back on their surface assets, and whilst the age of giant aircraft carriers hasn’t ended, practically only America can afford them on a mammoth scale, and even that is a declining trend. As the world becomes multipolar and the oceans teem with diverse rivalries, the investments in stealth and submarines have become significant, and China is rapidly headed down that course. In exercises conducted over many years by the United States navy, its prized carriers have been “sunk” at an alarmingly high rate, and if you believe it, rather counter-intuitively by diesel electric submarines, such as the Sindhurakshak that went down today. In navies across the world, submariners are considered amongst the best fighting crew, a class apart, and it is a roaring shame that so many of them perished in yesterday’s tragedy. Apart from the considerable naval setback, the loss of Sindhurakshak generally would mark a terrible nadir for India.

This writer and this magazine have relentlessly focussed on the collapsed political-economy under Sonia/ Manmohan Singh/ Palaniappan Chidambaram, but it is time to address the disastrous tenure of Arackaparambil Kurien Antony as the defence minister. Because the defence ministry provides a perfect cover to loot the country but is at the same time not the ideal place for an individual’s power projection, it holds limited appeal for ambitious politicians. After all the decades, there has never been a better defence minister than Yashwantrao Balwantrao Chavan who rebuilt the Indian Army from the ashes of the 1962 war to a fine force. Jagjivan Ram comes lower in the order and George Fernandes made a difference but his tenure was clouded by scandals. And the less said about Sharad Pawar and Mulayam Singh Yadav, the better.

Anthony, on the other hand, may be personally honest (at least he doesn’t attend the lavish farmhouse parties of arms dealers in South Delhi with barely clad call girls in attendance), but that has not prevented defence corruption from peaking under his watch, with the latest Comptroller and Auditor General’s report on the AgustaWestland helicopter deal creating a fresh stink. Anthony has no interest in the defence portfolio and is as keen to replace the prime minister as to return to the politics of home state Kerala, tracking which regularly and unfailingly consumes the first half of his workday. Officials say he does not read files as a rule. He does not keep abreast of operational matters and defence management under him has reduced to a cipher. As for defence-preparedness, don’t ask. Anthony may not be personally responsible for the destruction of INS Sindhurakshak but the ad hoc culture he has bred and his contempt and disdain for military matters has brought decisive slippages in the armed forces. Of the three service chiefs, only Devendra Kumar Joshi of the navy gets a decent rating, but he would have to labour to salvage his reputation after the submarine tragedy. The army chief, Bikram Singh, is most poorly ranked, and the negligence that caused the carnage in Poonch is a clear reflection of his deficient generalship. It hurts to write this.

But the principal culprit is Manmohan Singh. For reasons of delicacy, it was not earlier revealed that his adamancy to visit his native place, Gah, led to the minimization of Pakistan’s perfidy in Poonch by Anthony. Anthony’s statement was cleared by the so-called Pakistan/ China expert, the national security advisor, Shiv Shankar Menon. “Clear” is a euphemism because he changed the substance to let off the Pakistan army. Could a NSA maul the defence minister’s statement on his own? Plainly, he got directions, and it must have come from the prime minister’s office. But the PMO denies any role in Anthony’s controversial statement. Obviously, the PMO is lying. PMO officials now say that Manmohan Singh was determined to visit Pakistan in October or November after the conference with Nawaz Sharief in New York, and since this would perhaps be his last trip as prime minister, he wasn’t willing to forgo it for the Poonch killings. Anthony’s statement was amended for this reason. It has since been downhill for India on the national security side. Pakistani attacks on the Line of Control have only gotten worse. Will the Chinese stand quiet?

If neither the prime minister nor the defence minister cares for the sacrifices of the forces and adheres to a gross and insensitive business-as-usual approach, what message does it transmit down the officer corps? And this cynical decline and widespread demoralization of the forces have picked fierce pace in the ten years of Sonia and Manmohan Singh’s government. The iron discipline of the forces is crumbling. The generals are battling one another. Corruption and nepotism have flared. The Intelligence Bureau recently busted a party attended by arms sellers and air force officers but no one was penalized. And even to be promoted from lieutenant-colonel to colonel now needs political connections. During the Uttarakhand disaster, some officers tried to gain proximity with Rahul Gandhi. Where is the armed forces headed? Whereabouts is the country going?

With the loss of INS Sindhurakshak, you don’t have to look far to guess or know. The ignominy of losing territory is only seconded by a sunken flagship or a downed submarine. We just shot ourselves in the foot in full view of the world.

Lilo · Post by **Lilo** » 16 Sep 2013 11:40

Mods can there be a "Corruption in Foreign Arms Procurement for Indian Armed forces" thread ?
Focus on this issue will further highlight the necessity for more Indigenization in the Defence sector.

A recent eyeopening long form expose on this cozy network of Neta-Babu-Arms Agent-Brass nexus is found below

Boomtown

http://www.caravanmagazine.in/print/3878

Someone not on a smartphone or tablet (like me)- please quote the text in the above article here for archival purpose (if possible high lighting stuff). The whole article is too long to fit in a single post. A series of posts maybe required.
X-Post

Hitting the ex-sevicemen where it hurts the most - Their post retirement job prospects

UPA's New low :A massive Scam under Defence ministry's Directors General of Resettlement of ex-Army personnel

The matter, which is already in the knowledge of the highest levels in the government, including Defence Minister A K Antony, is now going before the Delhi High Court through a Public Interest Litigation (PIL), which is likely to explode on the face of the powers that be, as the affected parties are several lakhs of ex-servicemen and the taxpayers.

The PIL, filed by advocates Arvind Singh and Vipin Raghav, has been admitted by the Delhi High Court bench of Chief Justice N V Ramana and Pradeep Nandrajog on September 4 and eight-week notices sent to the respondents, which include Cabinet Secretary Ajit Seth and Defence Secretary R K Mathur, along with the Finance Secretary, Labour and Employment Secretary and the Director General Resettlement Major General Pramod Behl.

The scam relates to the resettlement schemes that the Directorate General of Resettlement had launched for ex-servicemen under which the retired officers were allowed to start and register their security agencies, coal loading and transportation agencies and national highway toll plaza management agencies and to recruit retired soldiers for their manpower requirements.

In what has come as a shocker, as per documents made available to The Sunday Standard, in the last eight years since 2005, the swindling of the retired soldiers’ money and the government exchequer has been carried out by some select retired officers, in obvious knowledge of the Directors General of Resettlement of the period.

The Directors General of Resettlement mentioned in the PIL include Major General V S Budhwar, Major General K S Sindhu, Major General Harwant Krishan and Major General S G Chatterji, who are all retired now, and have conveniently entered the coal loading and transportation scheme of the directorate that they headed previously.

The documents relating to the scams show serious malpractices and swindling of money belonging to the retired soldiers and the national exchequer by faking recruitment of ex-servicemen and collecting salaries in their names, but without employment in actual; forging documents to show deposits of provident fund contributions of each of their recruits, but in actual pocketing the amount; and preparing forged, fake challans of service tax deposits.

“My estimate is that the scam goes much beyond the eight years for which I have submitted documents to the court and the swindle is worth over Rs 1,000 crore minimum and may go up to Rs 5,000 crore according to estimates of some whistle-blowers,” advocate Arvind Singh, who has filed the PIL on behalf of the whistle-blowers, told The Sunday Standard.

Reading out from documents collected by the whistle-blowers and his team of independent investigators, Singh noted that the three businesses of security, coal and toll plaza were the most sought-after by retired officers, as the salaries fixed for the ex-servicemen recruits is at least three times what is received as remuneration by other individuals, these being unorganised sectors.

“The agencies are allowed a maximum of 300 ex-servicemen to work as security guards for a four-year period and their salaries have been fixed by the Directorate at Rs 25,000 a month. However, the agencies do not recruit the ex-servicemen and instead only produce a list of 300 of them to the public sector undertaking to raise salary bills. They recruit non-ex-servicemen instead and pay them salaries three times less and pocket the two-thirds amount,” Singh said. He also pointed out to several hundreds of fake Service Tax counterfoils of some of these agencies, apart from fake provident fund challans.

There were irregularities in the registration of about 3,000 security agencies by the Directorate, where it came to light during investigations that several retired officers had more than one agency registered in their names, whereas the rules allowed for only one. Also, there were several retired officers using the same registration number to avail benefits in different sectors, though the rules specify that they could do so only under one scheme of the Directorate (see box).

“Though there have been complaints in this regard with MoD, made by whistle-blowers in 2010, there has been no action taken till date and the fraudulent practices are continuing. A probe ordered in June 2011 has submitted its report, based on which only an office memorandum listing guidelines for working of these schemes were issued, but no punitive action taken in the last two years. That’s why we have filed this PIL,” Singh noted.

About 60,000 soldiers retire from the three armed forces annually and there are nearly five lakhs of them enrolled with the Directorate seeking an alternative employment post their retirement at a young age of 35-40

Kudos to New Indian Express group for focusing on this issue pertinently at least now.
My question to all the Paid News Journos who were tweeting incessantly against the supposed "politicization" of Army being attempted by Modi in Rewari...

"Where were you when the above was happening with ex-army personnel all these Long years ?"

Corruption at a massive scale in the higher reaches of the Army is becoming the norm as became clear after revelations of COAS V.K. Singh.

ramana · Post by **ramana** » 16 Sep 2013 20:01

Caravan expose on Indian Arms dealers and middlemen:

http://www.caravanmagazine.in/print/3878

Boom town.

ramana · Post by **ramana** » 19 Nov 2013 20:39

Govt decides to cancel the Westland Chopper deal.

Chopper deal to be cancelled

NEW DELHI: India has decided to cancel a scandal-tainted helicopter deal with Anglo-Italian firm AgustaWestland, prejudging the outcome of a meeting on Wednesday between company executives and defence ministry officials to discuss the contract, three sources said.

The decision draws a line under a dispute that has embarrassed a government heading into elections under a cloud of corruption scandals, and could reopen the contract to rivals, including United Technologies Corp's Sikorsky Aircraft, EADS' Eurocopter and Lockheed Martin.

Recall India paid a third of the contract and got a couple of choppers. So instead of penalising the bribe givers and takers they get a scot free pass.

vic · Post by **vic** » 21 Nov 2013 13:44

http://www.caravanmagazine.in/print/3878

Six months later, the CBI filed an FIR against Choudhrie, which provides an account of how he successfully won the contract in the face of blatant irregularities in the process. The details are bland, but they give a pretty good sense of how a powerful middleman could then bend the system to his liking.

At the end of that year, the Israeli company Soltam—whose directors included Choudhrie, according to the CBI—sent an unsolicited offer to the MoD for the contract, even though India had not yet formulated the required SQR or issued a request for proposals. Though “a proper analysis of the Soltam proposal was not done”, the MoD asked Soltam to send their gun for trials; they sent a gun that they had not yet tested themselves, which the FIR calls “an untested and unproven prototype”. The gun performed poorly, and “various wings of Army including DRDO raised serious objections”, which were “deliberately suppressed and ignored”, while a faulty evaluation report favouring Soltam was prepared. Over the next several years, competing proposals at lower or comparable prices, from Yugoslavia, Czechoslovakia, Austria, Finland, South Africa and India’s own Ordnance Factory Board were rejected “on one pretext or another ... No effort was made to shortlist the various possible sources and a single vendor situation was deliberately created.” Finally, a false report was prepared to secure the approval of the Cabinet Committee on Security, while frequent meetings were held between representatives of Soltam and army and MoD officials, “in gross violation of the DPP.” According to the CBI, Choudhrie received a payment of $156,940 (equivalent to Rs. 1.3 crore today) from Soltam in March 2000 as commission in the deal

. -

This shows how indigenous products are killed. I am sure huge number of foreign parties are trying to kill OFB's 155mm howtizer even now.

Pratyush · Post by **Pratyush** » 21 Nov 2013 15:33

^^^

The domestic product cannot be killed by imports, for a simple reason, that the PVT sector has gotten involved. If the pvt sector fails in the context of the IA, it can still export its design to foreign nations. The export will be difficult but possible.

Philip · Post by **Philip** » 21 Nov 2013 16:45

A fish rots from the head.Old saying.When the PMO downwards is enmeshed in scandal ,how do you expect the greedy babus not to be in the loop? After all it is they who have created the babu system to perpetuate their parasitical bloodsucking of the Indian people.The Saint,AKA,is both a hindrance to quick decision-making as well as reportedly a hindrance to the traditional mafia who enjoy the cream of the scams.Because of his personal honesty he has been kept in place as a figurehead while the machinations of the mafia,willing uniformed-wallahs and babudom swirl around him in their attempts to benefit by any means.It's a "heads I win tails you lose situ". Some say the Mahatir method allegedly used in Malaysia.

ramana · Post by **ramana** » 04 Dec 2013 04:19

Follow-up of the helicopter scam

VVIP Chopper deal:IAF Chief Tyagi's cousins were to be paid 7% commmission

NEW DELHI: One of the middlemen involved in the VVIP helicopter scandal, in which Italian consortium Finmeccanica is accused of paying bribes to win a 2010 India contract, has told a court in Italy that 7% commission was to be given to the cousins of former IAF chief Air Chief Marshal S P Tyagi.

The middleman, Guido Haschke, even reportedly told the court that he had even met ACM Tyagi six to seven times, as per reports coming from Italy. The development comes even as Indian authorities have been granted permission to use evidence submitted in the Milan court for actions in India. The move would further strengthen MoD's legal steps towards cancelling the contract, worth over Rs 3,500 crore for 12 helicopters meant to fly the President, Prime Minister and other VVIPs. Three of the helicopters have already been delivered, and India has paid over Rs 1,400 crore.

According to the reports, Haschke, one of the three middlemen in the deal who were paid a total kickback of 51 million euros (approx Rs 400 crore), told the court in detail about the bribe, his access to Tyagi cousins and his advance knowledge about the changes in requirement that qualified the AgustaWestland helicopter.

Hascke was answering questions on the first day of his examination in the court in Busto Arsizio on Monday as part of the ongoing trial in the Finmeccanica scandal that has had widespread ramifications in Italy.

Reports suggest Haschke told the court that he knew the three Tyagi brothers—Docsa, Julie, and Sandeep—well, and in turn used them to set up a meeting between air force chief S P Tyagi and an AgustaWestland executive. AgustaWestland, a UK-based helicopter firm, is now part of the Italian Finmeccanica group, and has initiated arbitration proceedings against MoD.

The documents filed in the Italian court show Haschke and his business partner Carlo Gerosa handled 20 million euro kickbacks, while Michel handled another 31 million euros.

The CBI FIR has already named former air chief and his cousins. Haschke has revealed that he was initially asked by Tyagi brothers to put them in touch with either AgustaWestland or EADS. Haschke has also told the court that he was aware in advance that the altitude requirement for the helicopters would be brought down so that AgustaWestland could qualify.

Haschke has also revealed that the bribe was to be split between the Swiss businessman, his partner and Tyagi brothers. And all the payment to Tyagi brothers was to be routed via Tunisia.

Sources also said the documents and other evidence filed with the Italian courts contain "unimpeachable evidence" to establish that bribe was paid to secure Indian contract. MoD official Upamanyu Chatterjee was present in the court representing the government. Fresh documents from the ongoing court case further establish the allegations of bribery, they added.

Can anyone who knows Italian follow this case in the Italian media? or Google News Italy?

Paul · Post by **Paul** » 04 Dec 2013 09:49

While not related to India....thought of posting this to show the problem is not confined to India by any means.

http://www.thefirearmblog.com/blog/2013 ... dgun-deal/

The Russian government has cancelled their order for Glock 17 and Glock 26 pistols after an investigation found that the pistols were being purchased for $6,000 each. These normally retail for approximately $550-$600. Russia’s Deputy Head of Defense Contracting has resigned. Jane’s reports …

Rahul M · Post by **Rahul M** » 09 Dec 2013 19:14

holy ravioli, this is big.

http://www.indianexpress.com/news/middl ... 9/1204792/

Middlemen's 'budget sheet' in Italy court refers to bureaucrats, 'AP', 'FAM' (Family)
Manu Pubby : New Delhi, Sun Dec 08 2013, 04:08 hrs Small Large Print
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Chopper dealThe document is in the hand of Swiss businessman Guido Haschke, who has confessed to having written it during a meeting with British middleman Christian Michel in 2008. PTI
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Italian prosecutors in the VVIP chopper deal have produced in court a "budget" drawn up by two key middlemen, which purportedly lists initials of Indian politicians and designations of bureaucrats, besides those of IAF officers, who it says would need to be "handled" for the deal to come through.

This is the first time that references to Indian officials other than IAF officers have figured in the investigations into the alleged corruption in the deal. No evidence has, however, surfaced yet to suggest payoffs were made to any of these individuals, either in accordance with this "budget" or otherwise.

The document is in the hand of Swiss businessman Guido Haschke, who has confessed to having written it during a meeting with British middleman Christian Michel in 2008. Prosecutors have presented it in court as a key piece of evidence to make the case that kickbacks of over 51 million euros were generated in the deal.

The note, which has been accessed by The Sunday Express, has three sections under which initials of politicians, designations of IAF personnel, and positions of bureaucrats respectively have been listed. Haschke has confessed in court that he drew up the list based on Michel's assessment of what would be needed for the "operation in India".

More evidence in the probe — the details of which were first reported by The Indian Express — is expected to be revealed in court in coming days.

Under the heading "POL" — Guido Haschke explained in court that this referred to Indian politicians — there are two references. One is to "AP" against which "3 million Euro" has been listed. The other is "FAM" — explained by Italian investigators in other documents as "Family" — against which "15/16 million Euro" has been listed. It is not clear if Haschke has explained in court what "AP" and "FAM" refer to.

Under the heading "BUR" — explained as "bureaucrats" in court by Haschke — six abbreviated designations have been listed. Five are key posts in the defence ministry — "DS", "JS AIR", "AFA", "DG Acquisition" and "another Gen". The sixth abbreviation in the list is "CVC". A total of "8.5 million Euro" has been "budgeted" under the "BUR" head.

Under the third heading "AF" (Air Force), four abbreviations have been mentioned. Two are "PDSR", and "DG"; the other two are not clear. Details are awaited on whether Haschke — who was arrested earlier this year, and whose confession to investigators last year produced several clinching clues — has revealed what the abbreviations mean.

During court proceedings on Friday, Ennio Amodio, defence lawyer for Giuseppe Orsi, the former Finmeccanica CEO who has been accused of generating bribes in the contract, contended that nothing written in the sheet was actually ever done, and it could not, therefore, be shown as proof of corruption.

In India, the anti-corruption probe into the deal is going slowly. The CBI has filed an FIR naming several Indian businessmen and former Air Chief S P Tyagi and his cousins. There is no indication yet that the CBI has probed the role, if any, of politicians and bureaucrats in fixing the deal.

Meanwhile, defence ministry officials said that the Italian court has granted permission to the Indian side to cross-question Haschke. Sources said that the cross-questioning would be done by Italian lawyers hired by India on December 13.

vivek_ahuja · Post by **vivek_ahuja** » 09 Dec 2013 20:44

Rahul,

Thanks for linking this very important article. I have also highlighted the references in above article for possible corruption within the armed forces as well:

Under the heading "BUR" — explained as "bureaucrats" in court by Haschke — six abbreviated designations have been listed. Five are key posts in the defence ministry — "DS", "JS AIR", "AFA", "DG Acquisition" and "another Gen". The sixth abbreviation in the list is "CVC". A total of "8.5 million Euro" has been "budgeted" under the "BUR" head.

Under the third heading "AF" (Air Force), four abbreviations have been mentioned. Two are "PDSR", and "DG"; the other two are not clear. Details are awaited on whether Haschke — who was arrested earlier this year, and whose confession to investigators last year produced several clinching clues — has revealed what the abbreviations mean.

During court proceedings on Friday, Ennio Amodio, defence lawyer for Giuseppe Orsi, the former Finmeccanica CEO who has been accused of generating bribes in the contract, contended that nothing written in the sheet was actually ever done, and it could not, therefore, be shown as proof of corruption.

-Vivek

Karan M · Post by **Karan M** » 09 Dec 2013 20:56

>>holy ravioli

Ah, an URT fan.

Karan M · Post by **Karan M** » 09 Dec 2013 20:57

Man... so much for the Armed Forces remaining insulated from the shenanigans in civilian society.

Rahul M · Post by **Rahul M** » 09 Dec 2013 22:25

vivek, point to be noted that those might just be initials used for discussing negotiation tactics. not certain that all of those took bribes. unlike the fam and AP who were pointed out by amount doled out.

karan, of course.

vivek_ahuja · Post by **vivek_ahuja** » 10 Dec 2013 00:12

Rahul M wrote:vivek, point to be noted that those might just be initials used for discussing negotiation tactics. not certain that all of those took bribes. unlike the fam and AP who were pointed out by amount doled out.

Fair enough, I think.

BTW, probably me being thick headed, but what is the AP for again? FAM was pretty self explanatory.

Thanks

-Vivek

Rahul M · Post by **Rahul M** » 10 Dec 2013 00:17

they haven't clarified so far.

only politico I remember with those initials is ahmed patel, madam ji's man friday.

ramana · Post by **ramana** » 10 Dec 2013 02:51

What is CVC?