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Wednesday, 28 March 2012

Why Defense Equipment Cost More To India? – Exclusive

Why Defense Equipment Cost More To India? – Exclusive

In this Mail Today story it is clear the ‘Our Procurement Process’ is Outdated and instead of ‘Pin Pointing’ the best equipment available in the market Our Defense Establishment invites every Tom Dick and Harry in Defense Equipment Business to bid and go through Eight Stage selection process. As given the following links –

1.)         India end up Importing Equipments that are technologically 10 years old.
2.)         Pay several times more than direct buying.
3.)         India misses opportunities to Manufacture Defense Equipments inIndia.
4.)         Foreign Companies can’t operate without Agents – they charge commissions for their services – which half pants, socialists and communists don’t like.


A look at the above U-Tube presentation would Illustrate our Bofors Guns are outdated in technology and performance. Archer 155 Gun can fire 20 Rounds in 150 seconds with accuracy and carry 40 rounds in two magazines. ‘The howitzer has a continuous fire rate of 75 rounds an hour, an intensive fire rate of 20 rounds (i.e., a full magazine) in 2.5 minutes, and a salvo fire rate of three rounds in 15 seconds. The MRSI capability, multiple round simultaneous impact, is up to six rounds. Direct-sighting can be used for target ranges up to 2,000 m.’

M198 155 Howitzer was inducted in US Army in 1979 when India had Janta Dal government that shut down IBM and Coca Cola and reduced foreign holdings of American companies to under 40%.  


When Indian Army wanted similar 155 Howitzer in 1980s it invited global tenders for about 100 guns excluding USA but specification of the gun was identical to M198.

Bofors developed 155 Howitzer for India and R&D cost led to price escalation when direct purchase would have cost $.06m India end up paying $3.2m per gun.

CONCLUSIONS & REMEDY: -

India is one the largest importer of Defense Equipments and therefore Prime Candidate to establish manufacturing units. In this message – 400 Archer Howitzers could have been made in India for our Army with Swedish Collaboration at much lower cost than Bofors Guns compared to development in Sweden and Sweden & Norway could have 100 Archer Guns each for the R&D cost they incurred.

1. India to have ‘High Power Defense Technology & Equipment Acquisition Board’ to order Imports, Joint Development and Manufacture of Future Technologies and 100% Foreign Owned Manufacturing plants to manufacture all the Defense Equipments India needs.

(Don’t include Sam Pitroda in this.)

2. Defense Sector be opened for up to 100% FDI in Manufacturing units for equipments like Assault Rifles to Euro Fighter.

Ravinder Singh
March28, 2012

Page 16-17
Wheels Within DEALS
By Manoj Joshi in New Delhi

ONCE again the heavy price India is paying for its inability to deal with the vexed issue of corruption in defence acquisition deals has become apparent. What is not so clear, as in the case of the most recent allegation on the Tatra trucks, the murky background of the case and its shadowy operators. The result of this and past cases have led the ministry of defence to make procedures so cumbersome that acquisition becomes a tortuous and often never- ending process. But despite this, the ministry is unable to staunch the haemorrhaging of the national exchequer when it comes to defence deals. People and companies are caught, charged, black- listed and yet the bribery and corruption in defence deals goes on.

It does not really matter whether you are the private sector or the government. This was apparent from the sensational arrest, a day after he retired in 2009, of a former head of the Ordnance Factory Board Sudipto Ghosh, who had received huge amounts of money from foreign suppliers to ordnance factories. Arrested with him was Ramesh Nambiar, an Air India official who served as a conduit to Ghosh and who helped him to channel his money in foreign bank accounts. The government’s decision to blacklist six companies, including Singapore Technologies, Israeli Military Industry and Germany’s Rheinmetall Air Defence for years for their alleged role in the ordnance factory scam tells its own story. But the consequences of this could well mean further delays in the army’s search for new 155mm howitzers through deals that could worth more than ` 10,000 crore.

IN the case of the Tatra trucks, too, the story is a murky one. A former army chief told this writer in 1987 that he wanted to import the trucks fromCzechoslovakia, but Bharat Earth Movers Ltd (BEML) insisted that would acquire them and indigenise the production. Over the years, BEML has merely taken kits and put them together and passed them on to the army after marking their prices. As the army chief forecast then, the trucks would have been cheaper to import.

Clearly the gains to be made from fixing defence purchases are so huge, that people and companies are willing to risk their reputation to scoff government efforts to restrict the activity. Actually, considering that the big fish, involved in deals worth hundreds of millions of dollars almost never get caught, much less convicted.

Indeed, the only people who are actually serving jail time have been relatively junior military officers who have had the “benefit” of the military’s summary procedures.

The Tehelka case brought out the extent of the rot that had affected the armed forces, a situation which had made even the most disciplined officers open to entrapment by arms agents, corrupt fixers and dealers.

Maj- General PSK Choudhary, who was the senior- most army officer caught accepting bribes from journalists posing as arms dealers in the Tehelka case, has already served his one- year sentence. So have the other army officers at the rank of Colonel and Major who were entrapped.

But the armed forces people who get caught are small fry. They can tweak qualitative requirements, or test results, or give you a contract to buy ration and rum. But the big decisions, especially in the mega deals worth hundreds of millions, if not tens of billions, are made elsewhere, usually at the very top of the system which means politicians and ministers. This is where things get murky, since not only are the players never caught, but even their names are not too familiar. There are rumours, of course, but no proof, everyone has a legitimate business cover and the moneys paid are through intricate cut- outs of which the Bofors case only provides the tiniest confirmation.

These are not people who are seen in the defence ministry or hobnobbing with ministers, but who work from far- off cities — London, Singapore, Dubai or Paris — far from the reach of intelligence or CBI sleuths, leave alone the media.
The armed forces people who get caught are small fry. But the big decisions, especially in the mega deals worth hundreds of millions, are made elsewhere, usually at the very top which means politicians and minister.

Antony pleads not guilty in ‘bribe for Tatra trucks’
By Gautam Datt in New Delhi

FACING the biggest crisis of his tenure, “Mr Clean” defence minister A. K. Antony on Tuesday questioned why army chief Gen.

K. Singh did not press for action against former Defence Intelligence Agency chief Lt- Gen. Tejender Singh when he allegedly offered him a bribe of crore to clear the purchase 600 sub- standard Tatra trucks.

Pushed to an embarrassing spot by the army chief, who has said in an interview that he informed the defence minister about the bribe offer made more than a year ago, Antony pleaded in the Rajya Sabha: Punish me if I have done anything wrong.” The minister claimed he held head in shock when he heard about the bribe offer and asked the chief to take action against the officer. “But he told me I do not want to pursue it. I don’t know why he did not want to pursue it at that time,” said Antony as he ducked the Opposition’s charge of not acting on the General’s startling disclosure.
I acted on my judgment. If I am wrong, you may punish me. I think I have done my best,” said Antony accepting that Gen. V. K. Singh had informed him about the bribe offer more than a year ago.

“This happened more than one year ago. That is my memory.

Exact day they would know because no one can meet the army chief without any appointment,” Antony said, confirming his discussion with the chief on the subject.

Antony faced the Opposition’s onslaught with BJP’s Arun Jaitley accusing the government and the army chief of putting blinkers on the corruption charge. He said the government had lost statecraft and Antony should have made a distinction between the “substantiated” and “baseless” charge and should have got the matter investigated.

The Central Bureau of Investigation (CBI) has launched a probe into the bribe offer allegation.

The CBI on Tuesday received an audio tape carrying a conversation purportedly between the army chief and another person in connection with the bribery charge.

Gen. V. K. Singh’s close aides claimed that proceedings of the meeting between Lt- Gen. Tejender Singh and army chief are on film that shows the army chief becoming furious.

Denying the charges, Lt- Gen.

Tejender Singh has filed a criminal defamation case against Gen.
V. K Singh and some senior army officers for maligning his name by alleging that he had offered bribe of ` 14 crore to the army chief.

Referring to a press release issued by the army on March 5, Lt- Gen. Tejender Singh said, “The said press release contains exfacie defamatory statements and allegations against the complainant, which are entirely baseless, false and concocted one.” The army on March 5 had identified Lt- Gen. Tejender Singh as one of the persons who was spreading stories about a snooping scandal in defence minister A. K. Antony’s South Block office.