The Telegraph
Since 1st March, 1999
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Scorpene records turn gun on NDA
- Govt papers show 13 deals with ‘blacklisted’ firm when Fernandes was minister

New Delhi, March 21: The NDA’s charge that there were payoffs from a French company to win the order for Scorpene submarines is being turned around on the Opposition alliance because the defence ministry has now dug out records to show the extent of negotiations and relations that were established with the firm during the tenure of George Fernandes.

Sources in the ministry said today that during the NDA regime, the defence ministry with Fernandes at the helm negotiated or signed at least 13 contracts with Thales ' the French holding-company of Scorpene-maker Armaris ' that Lal Krishna Advani said yesterday was a “blacklisted” firm.

Some of the contracts ' including one for thermal-imaging (night-vision) devices ' were signed with subsidiaries of Thales. On April 4, 2002, contrary to the charge by Advani, the defence ministry had also issued a statement saying Thales was not a blacklisted company.

The sources studied the allegations made by Advani, Jaswant Singh and Fernandes at a news conference in New Delhi yesterday and have prepared a point-by-point rebuttal of the charges. A summary:

Charge: Finance minister P. Chidambaram wrote to Pranab Mukherjee on May 13, 2005, expressing concern about the cost of the deal

Explanation: No such letter as claimed by the NDA. The letter of the date quoted by the NDA is a request by Chidambaram to give an audience to German representatives of MAN-Ferrostaal-HDW, also submarine-makers who were bidding for the order. Chidambaram did not voice concern on the cost of the project

Charge: The NDA government had similar concerns and it did not clear the deal

Explanation: The NDA government approved the proposal to buy Scorpene submarines on October 9, 2002. The finance ministry cleared it on December 19, 2002.

The NDA government also refused to accept the advice of the central vigilance commissioner on signing integrity pacts. The UPA government overruled this decision and decided to sign the integrity pacts

Charge: The UPA government pushed through the deal in five “hasty” months

Explanation: In 1980, the government approved the building of four HDW submarines. On April 19, 2001, the NDA government decided to acquire submarines on a single-vendor proposal from CSF Thomson (now Thales) for induction of six Scorpene submarines. HDW was facing bribery charges by then.

In several meetings since then, the NDA government did examine options such as a global tender but still settled on the Scorpene offer primarily because naval headquarters projected that by 2012, the submarine force level would plummet to nine from 18 in 1998. The Indian Navy’s submarine force-level was plummeting while Pakistan was bolstering its fleet with Agosta submarines.

The UPA government considered the Scorpene case “afresh” despite earlier approvals by the defence and finance ministers of the NDA regime.

The UPA government approved the proposal after re-negotiating the deal at a cost that was Rs 313 crore less than that negotiated in Fernandes’s term.

Defence minister Mukherjee also overturned the decision of the NDA government on the integrity pacts that forbid the use of unfair means and levies heavy penalty, including cancellation of the order, if the contract is flouted.

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