The Telegraph
Sunday , August 24 , 2014
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Jaitley promises defence graft policy

National vs public interest challenge

Visakhapatnam, Aug. 23: The Centre will shortly announce a policy on how to deal with corruption in defence deals without impacting on military preparedness, defence minister Arun Jaitley said here today.

Jaitley is now taking a hard look at his predecessor A.K. Antony’s practice of imposing bans on or blacklisting companies against whom evidence of corruption was found or suspected.

“It is a very serious challenge,” Jaitley said after commissioning an anti-submarine warfare corvette, the INS Kamorta. “We have concerns over, a) violations, and, b) the consequences of those violations. There are two competing issues: public interest and national interest. It is an issue which we are fully seized of.”

Part of the reason for a re-look at the policy is the manner in which punishments have rebounded on the armed forces. For example, the army has not been able to induct heavy artillery guns in 30 years since the allegations of corruption in the Bofors gun deal.

The armed forces were similarly in a tizzy after suggestions that the ministry earlier in the year was considering a ban on Italian conglomerate Finmeccanica after its subsidiary, Agusta Westland, was blacklisted for having bribed Indian officials to win a contract to sell VVIP helicopters.

The three copters that were delivered have been mothballed and the establishment went slow on taking action against Finmeccanica when it discovered how deeply entrenched it was in supplying crucial weapons and systems to the army, the navy and the air force. Blacklisting Finmeccanica would have told on the platforms operated by the military by starving it of not only new equipment but also spares.

Even in the warship, the INS Kamorta, commissioned today, and in the INS Kolkata, commissioned by Prime Minister Narendra Modi in Mumbai last week, submarine-detection kits, known as the ATAS — Active Towed Array Sonar — are absent.

Part of the reason for the absence is an investigation into allegations of corruption after the navy selected German firm Atlas Elektronik’s bid to supply six of the kits. (The other part of the reason is the failure as yet of the Defence Research and Development Organisation to develop an ATAS to the satisfaction of the navy).

The absence of the equipment, along with the failure to install a long-range surface-to-air missile on the INS Kolkata, led to the government commissioning — or announcing that they were battle ready — even when they did not have the full range of weapons they were designed for.

But Jaitley defended the decision, saying the largely indigenous content on the new warships had to be given time. “If, on the commissioning of a ship, if one of the weapons is not there it shall be installed. (Because of the largely home-made variety of recent ships), we are all on a learning curve. That applies to us as well as to the Indian industry and for our own institutions.”

He said with the relaxation of the policy on foreign direct investment in the defence sector (and raising of the limit to 49 per cent), there will be more equipment produced for the armed forces within the country.

The delays in getting the right equipment on schedule were a result of many factors but not a coherent lack of planning, he said. Among the factors was inability of suppliers to abide by contracts.

Jaitley said like the private sector, the defence public sector undertakings would also have to become more competitive.