Defence Notes
New
Delhi, 13 April 2009
Israel Missile Deal
KICKBACKS BEING USED FOR POLL?
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)
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