DEFENCE NOTES
New Delhi, 17 December 2007
Defence Scams Galore
HONESTY TAKES BACKSEAT
By Dr Col (Retd) PK Vasudeva
Prof, ICFAI Business School,
Chandigarh
The Indian Armed Forces are known
for their honesty, integrity and professionalism. However, due to the booming
and fast growing economy, the over Rs one crore per year sky-rocketing pay
scales in the corporate sector coupled with the
fat-perquisites-sans-accountability of politicians and bureaucrats, the bug
to-get-rich-quick has also affected some
of the Armed Forces officers. Resulting in a below-standards leadership,
corruption and a large number of scams at various levels.
Basically, the Forces are not
directly involved in the procurement of high-cost modern arms, equipment,
aircrafts and naval frigates. They only carry out the user's trial and
recommend a particular arm or equipment. The purchases are directly carried out
by the Ministry of Defence (MoD). One of
the biggest Army scams still pending with the CBI for the last two decades is the
Bofors gun deal.
Recall, the Army initially
planned to acquire a Howitzer gun which could clear the steep mountains and the
long distance 30 km. But after conducting the user trials, the Army did not
recommend the purchase of the Bofors gun because better guns were available. However,
the MoD which preferred the Swedish gun ordered 3000 Howitzers. But due to the
infamous 'Bofors Scandal' in 1987 only 410 guns were purchased. Thus, Bofors
became a synonym for political skullduggery.
It was alleged that Bofors along
with the other accused entered into a criminal conspiracy to obtain the
contract by deceiving the Indian Government by fraudulent representation about
the price and quality of the gun and gun system by stating that it was superior
and cheaper than the `Sofma' and that no agent/middlemen would be used in the
negotiations.
After obtaining the contract,
Bofors paid a commission of SEK
50.46m to the Italian businessman Ottavio
Quattrocchi through AE Services Ltd; SEK 192.15m to the Hinduja brothers
through Mc Intyre Corporations in the name of Svenska Inc, Panama and SEK 80.79m through the Hanover Trust,
SEK 31.98m through the Swiss Bank
Corporation, Geneva and SEK 11.77m through
Credit Suisse, Geneva. All to cheat the Indian Government. Resulting in a loss
of Rs 100 crore. While some of the accused have been exonerated, the case
against Quattrochi is still going on without any results.
That apart, the MoD is inquiring
into allegations of kickbacks in seven major deals relating to the acquisition
of sub-systems worth thousands of crore in 2007. One of the cases pertains to
the procurement of the multi-beam echo sounders for the Indian Navy. It is designed to perform sea-bed mapping
and sea-bed imagery in full ocean depth with an unusurped resolution, coverage
and accuracy.
The other deals that are being
investigated by the MoD’s Chief Vigilance Officer (CVO) are the procurement of
the ground-based mobile ELINT systems, which constitute components of the
Phalcon Airborne Early Warning, the Command and Control Systems (EWACS) that
were purchased in 2004 from the Israel Aircraft Industries for $1.1 b. The
systems receive, analyse and locate radar signals covering 360 degrees.
The Rs 260-crore deal for the Autonomous
Underwater Vehicles (AUV), the Navy's first- ever from Norway's Kong's Berg Maritime is
also being probed by the CVO. Two potential vendors, UK's
Ms Hydroid, Europe and US's
Bluefin Robotics Corporations earlier this year, complained that the contract
was awarded without the floating of global tenders. They alleged that the guidelines
were not followed.
Scrutiny also remains incomplete
in respect of the MoD's "suspect decision" to source 80 per cent of
the electronic fuses required for the artillery gun from one source and without
floating a global tender. Another case relates to allegations of kickbacks
totalling $3,65,935 in the anti-material rifles deal with the South African
vendor Ms Denel Pty Ltd.
Besides, the Udhampur-based
Northern Command Chief, Lt-Gen H S Panag, has sought explanations from 16
personnel about irregularities in the procurement of eggs. "It's a case of
not allowing even a minor aberration to go unnoticed. An inquiry is in progress
to determine whether it's the mischief of the contractors or some Army officers
or both working in collusion," said an officer.
Coming as it does after the petrol,
liquor, cereal and other scams, the Army top brass is taking the "egg
scam" seriously. The loss to the exchequer could run into crores,
considering that over one-third of the 1.13-million Army is deployed in
J&K.
Further, the Army has ordered
administrative action against a Lieutenant-General and several others, for
alleged irregularities in the procurement of frozen meat meant for the troops
posted in Ladakh.
A court of inquiry, headed by a
former Deputy Chief of Army Staff. Lt-Gen G.D. Singh had indicted Lt-Gen S K
Dahiya, at present posted as Commandant Army Service Corps (ASC) Centre, Bangalore, for his role in
the matter. The procurement was done when General Dahiya, in the rank of
Major-General was heading the ASC branch at the Northern Command Headquarters.
More. Seven years after the
Kargil war, the Central Bureau of Investigation has finally nailed some senior Army
officers and the company that sent the coffin boxes for the dead soldiers at
twice the market rate in what has come to be known as Coffin Scam.
The CBI has registered a criminal
case against a recently retired Major General, who was the then Military
Attaché, Indian embassy in the USA; a Colonel ranking officer, who was the then
Director, Master General Ordnance; another Colonel ranking officer, who was the
then Joint Director, MGO; a private vendor in America and others in regard to the
procurement of aluminium caskets and body-bags.
"The Ministry of Defence had
imported aluminium caskets and body bags from a US based funeral service company to
enable the Indian Army to transport the mortal remains of the soldiers from the
battlegrounds to the places of their next of kin with exalted decorum and efficiency.
But the suspected officials entered into a contract during 1999-2000 with the
US-based supplier to import 500 aluminum caskets and 3000 body bags at an
exorbitant rate of $ 2500 (approximately Rs.1.20 lakh) per casket and $ 85 per
body bag flouting the rules of established procedure of defence procurement.”
Not only that. The Army is now
investigating allegations of irregularities in the purchases made from funds
released under the Army Commander's special financial powers in Jammu and Kashmir.
According to sources, tents and other ordnance equipment was purchased from
local sources under the special funds. The purchases pertain to the last 2-3
years and are valued at about Rs 17 crore. The role of around 50 officers, most
of them from the Army Ordnance Corps (AOC), is being investigated for the
purchases.
If Army tradition has any
standard-bearer, denying a jawan,
guarding the country's borders, his daily rations would amount to treason. For
troops serving in the tortuous upper reaches of Siachen-Leh-Kargil, the special
high-altitude rations flown in by helicopter is their sole source of
sustenance.
Now, a shocking Rs 5,000-crore
scam involving the large-scale diversion of essential food supplies meant for the
troops in this sensitive border region has set alarm bells ringing at the Army
headquarters. Reports detailing the extent of the scam, allegedly involving
senior officers of the Leh-based 14 Corps are now with the Union Defence Minister,
A.K. Antony. The revelations, the result of an investigation by the J&K
police, have deeply embarrassed the Army's top brass.
Another fraud that has been
reported is vis-à-vis the convoy which goes from Srinagar to Leh, for stocking of the winter rations,
ammunition and other stores. It has now been detected that the fuel is sold to
civilians on the way.
The region's Petrol Tank Owners
Association asserted that the scam involving drivers, officers and middlemen
has cost hundreds of millions of rupees. The Army has not commented on the
claim but said it was investigating the scam. It was found that seven tankers
of diesel bound for Ladakh had been sold off and replaced with water. Additionally,
more than 30 per cent of the oil supplies meant to the Army are stolen. The
association asserted that the scam worsens during the winter supply season. ---
INFA
(Copyright India News
& Feature Alliance)
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