Home arrow Archives arrow Defence Notes arrow Defence Notes 2009 arrow Israel Missile Deal:KICKBACKS BEING USED FOR POLL?, by Radhakrishna Rao,13 April 2009
News and Features
INFA Digest
Parliament Spotlight
Journalism Awards
Israel Missile Deal:KICKBACKS BEING USED FOR POLL?, by Radhakrishna Rao,13 April 2009 Print E-mail

Defence Notes

New Delhi, 13 April 2009

Israel Missile Deal


By Radhakrishna Rao

The far from transparent Rs.10,0000-million high profile defence contract that New Delhi  entered into with IAI (Israel Aerospace Industries), quietly and in great hurry, in late February has come under a cloud. The contract for the joint development of medium range surface-to-air missile (MRSAM) is alleged to be wrapped in kickbacks and irregularities. Critics say that a kickback of Rs 6,000 million has cleverly been camouflaged by the IAI as its ”business charges”, which under India’s newly-formulated defence procurement policy is also a taboo.

Moreover, the procurement policy clearly prohibits the involvement of middlemen and brokers even as the deal comes under the scanner for the suspicious role played both by Indian and Israeli agents. Reports in a section of the media suggest that the deal was pushed through days before the announcement of the General Elections, lending credence to the theory that a “part of the hush money’ would be used for funding the election campaign of dominant partners in the UPA government led by Prime Minister Manmohan Singh.

Defence Minister A.K. Antony known for his clean image and personal integrity is clearly in a fix. Not long back, he had vowed to put an end to irregularities and kickbacks that have been the lot of defence deals for past three decades. Antony has never minced words while highlighting the need to eliminate “agents and middlemen” from our defence deals. Though stressing the need that such a missile system has assumed significance given the threat to the country, he has not been able to justify many aspects of the deal that the DRDO had signed with IAI for the joint development of the missile.

To begin with, IAI is already under investigation by the CBI for its alleged role in the payment of “hush money” for pushing ahead with the sale of Barak missile to the Indian Navy. In addition, this deal was finalised without any competitive bids despite the defence procurement policy stressing the need for an evaluation of multiple bids.

The focus of the MRSAM deal is on the joint development of a missile system capable of hitting a target at a distance of 70-km. At the core of this system will be Israel’s Rafael missile. Moreover, Israel is not likely to transfer the technology of “seeker”, which happens to be the Achilles heel of the Indian missile development programme. Those familiar with it drive home the point that the DRDO is capable of developing a 70-km range surface-to-air missile on its own. It has covered a substantial ground in testing a ballistic missile defense shield. In fact, the landmark test, a modified version of Prithvi missile, carried out on March 6 had achieved a direct hit by killing the incoming Dhanush missile  at an altitude of 80-km.

An impression is being given that vested interests in the defense establishment, egged on by the IAI agents wanted to push ahead with the deal with the objective of sabotaging homegrown Akash area defense system, which has a range of 27-km. In fact, there is much outrage over the way retired high-ranking defense officials are being allowed to work as foreign defence companies’ agents.

Notwithstanding the IAF ordering two squadrons of Akash, all the three defence services appear to have a penchant for imported hardware and are critical of homegrown equipment! The one standard grievance is that either the hardware is substandard and deficient or it is running behind schedule. Like the controversial Bofors gun deal signed by the Late Rajiv Gandhi 22-years back, this IAI deal too is likely to create a big political storm. Already it has become a poll campaign issue for the Left parties in spite of the Government saying it has fulfilled all mandatory requirements for going ahead with the contract.

On its part, IAI has revealed that its share of the deal is Rs.70,000-milllion, and the DRDO gets the balance of Rs.30,000-million. According to reports appearing in the Hebrew newspapers, deliveries of the MRSAM would begin “90 months from the date advance payment is received”. However, what has embarrassed the Manmohan Singh Government is the revelation by the IAI that the company was asked to “keep the deal under wraps” and not to disclose that the first installment had been made. But being a listed company, the IAI had no option but to give the details of the contract.

Indeed, a report appearing in Globes, a financial daily from Israel observed inter alia, “IAI stated that it delayed announcing the contract until now because the customer (the Indian Government) informed the company that early disclosure was liable to cause material difficulties in execution of the contract and even result in its cancellation”. On the other hand, reports appearing in a section of the Indian media point that many involved in the deal are key players in politics.

Significantly, the DRDO-IAI deal has been under active consideration of the Government since 2007. However, in view of the controversy over the earlier Barak missile deal, the Defence Ministry was not to push this one. The deal being clinched in late February thus remains a mystery. In the past, following allegations of kickbacks and irregularities, the Government had blacklisted some firms such as Bofors, HDW and Denel.

In fact, Antony has made it amply clear that the Government would not hesitate to cancel the DRDO-IAI contract if any irregularities were proven. But it seems to be mere lip service. Given domestic political compulsions, New Delhi deems it prudent to keep its defence relationship with Tel Aviv away from public glare. The Israeli too are reluctant to talk about their fast growing   ties with India. For New Delhi and more particularly after the Kargil skirmish in 1999, Israel has become a most-preferred defence partner. Today, it is the second largest defence partner with sales touching around US$1-billion, after Russia.

It has signed a deal with Tata Industries to float a joint venture to cater to the needs of Indian customers of IAI. Rafael and State-owned defense enterprise BEL (Bharat Electronics Ltd) have also agreed to float a joint venture company to “encourage indigenous advanced technology components of missile electronics and guidance.” Bangalore-based aeronautical major HAL is engaged in upgrading many of the Soviet era fighter aircraft in association with defence companies from Israel. Tel Aviv is also supplying three advanced AWACS to the IAF.

A defence satellite from Israel was launched by means of the four-stage space workhorse PSLV, in January 2008 as part of a commercial agreement. The orbiting of this satellite featuring a synthetic aperture radar mean to monitor developments in Israel’s neighourhood, including Iran is considered a new high in New Delhi’s growing relationship with Israel. Meanwhile, reports suggest that ISRO is preparing for the launch of another 300-kg satellite capable of collecting data under conditions of cloud, haze and darkness. Whether this satellite will belong to Israel or will be Indian with only critical components supplied by Israel, would be worth watching out for. ---INFA

(Copyright, India News and Feature Alliance)

< Previous   Next >
  Mambo powered by Best-IT