The Telegraph
Since 1st March, 1999
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Sub deal with no-bribe clause

New Delhi, Oct. 6: India today signed a $ 3.5-billion contract for six Scorpene submarines from France with a no-bribery clause that has been included in an international military acquisition agreement for the first time.

The agreement to acquire the Scorpene submarines ' that includes five separate contracts ' was announced during Prime Minister Manmohan Singh’s visit to Paris last month.

This is the first big-ticket military acquisition contracted by the UPA government and has been signed even as Thales, one of the partners of Scorpene-maker Armaris, is under a cloud after allegations from a former executive that it holds a “slush fund”.

But the Indian Navy, which has been projecting its desperate need for the Scorpene submarines and is clearly thankful after more than a decade of negotiations, believes that the allegations against Thales should not cast a cloud on the contracts.

“There are integrity pacts built into the contracts,” the chief of naval staff, Admiral Arun Prakash, said here just after the signing ceremony. “Also, as far as we are concerned, we are dealing with Armaris and MBDA and no one else”.

“The contract is for six submarines to be built with transfer of technology. To our sellers (the French) we say ‘your reputation is at stake, so please ensure complete transfer of technology because indigenisation ranks high on our list of priorities’,” Prakash told a delegation led by the ambassador of France, Dominic Girard, at the signing ceremony in the ministry of defence here this evening.

Admiral Prakash said the acquisition of the Scorpenes will still leave the Indian Navy’s submarine fleet short by about eight from its projected requirement of 24 diesel submarines by 2030.

The navy was de-commissioning vessels faster than it can acquire them. The first Scorpene submarine will be built in the Mazagaon Dockyard in Bombay and delivered in seven years and the other five will be built and delivered over five years later.

The no-bribery clause is built into the “integrity pacts” that became part of the defence acquisition policy in July this year that was pushed through by defence minister Pranab Mukherjee before he gave the green signal to spend big money on military purchases.

For the Scorpene deal, the integrity pacts were signed by Thomas Mathews, joint secretary in the ministry of defence, and Pierre Legros, chairman of Armaris, and between Mathews and Marwan Lahound, chief executive officer of MBDA that will supply the Exocet missiles for the submarines.

Mathews said the integrity pacts will “ensure avoidance of all forms of corruption by ensuring free, fair, transparent and unprejudiced dealings, prior to, during and subsequent to the currency of the contract”.

Armaris last month supplied its first Scorpene submarine to Chile.

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