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Tuesday, 3 April 2012

From Today's Papers - 03 Apr 2012
Defence acquisitions to be fast-tracked
Government clears five-year plan, issues new guidelines on transfer of technology policy
Ashok Tuteja/TNS

After the 1990s’ Bofors’ acquisition, the Army hasn’t purchased any Howitzer gun
After the 1990s’ Bofors’ acquisition, the Army hasn’t purchased any Howitzer gun

New Delhi, April 2
Amid a spate of controversies involving the defence establishment, the Defence Ministry today cleared the long-term integrated perspective plan (LTIPP) for 2012-2027 and the five-year defence plan (2012-2017) besides effecting a key change in the offset policy by including transfer of technology (ToT).

The Defence Acquisition Council (DAC) met here this afternoon under the chairmanship of Defence Minister A K Antony and considered the perspective plans of the defence forces against the backdrop of Army Chief Gen V K Singh’s recent letter to Prime Minister Manmohan Singh over the army’s lack of war preparedness.

The two-hour meeting of the DAC was attended by Gen Singh, IAF Chief N A K Browne and Naval Chief Nirmal Verma.

Earlier in the day, Antony had an hour-long separate meeting with the Army Chief and other senior Army officials to review the requirements of the force. While the LTIPP is a broad vision document, the 12th defence plan deals more in detail with the specific requirements and modernisation plans of the defence forces as also projections for the allocation of resources for the modernisation and day-to-day functioning.

The DAC also approved revised Defence Offset Guidelines (DOG) in which it recognised ToT as eligible for discharge of offset obligations, which was a major demand of foreign companies.

“Investment in kind in terms of ToT must cover all documentation, training and consultancy required for full TOT (civil infrastructure and equipment are excluded). The ToT should be provided without licence fee and there should be no restriction on domestic production, sale or export,’’ according to the new guidelines.

In the earlier policy, offset obligations were to be discharged during the period co-terminus with the main procurement contract. The revised guidelines allow offset obligations to be discharged within a time frame that could extend beyond the period of the main procurement contract by a maximum period of two years.

Earlier in the day, Antony reviewed various issues and proposals relating to the acquisition for the army on capital and revenue accounts. The meeting was attended by Gen Singh and other senior defence officials.

Antony, who has also come in for some criticism from the Opposition over the recent controversies concerning his ministry, favoured more financial powers to the three services if it could lead to speedier acquisition of equipment, platforms and systems for the armed forces.

Antony directed the Army to streamline its acquisition process in such a manner that accountability could be fixed in the event of any slippages.

He asked the officials of the Defence Ministry and the army to examine the possibility of compressing the time taken for technical evaluations and trials, officials said.

what it means

    The Five Year Defence Plan that will come into effect from this year was formulated over two years involving the Defence Ministry, Integrated Defence Services and three forces
    Tech transfer should be provided without licence fee and there should be no restriction on domestic production, sale or export
    Offset obligations to be discharged within a time-frame that could extend beyond the main procurement contract by a period of two years
    Antony favoured more financial powers to the three Services
Tatra deal: CBI questions Vectra chief

New Delhi, April 2
The CBI today questioned Vectra chairman Ravinder Rishi in connection with alleged irregularities in the supply of Tatra all-terrain trucks to the Army, a day after issuing a lookout notice for him.

The 57-year-old British national Rishi, named as an accused in CBI's FIR in alleged irregularities in purchase of the Tatra trucks, was questioned for the second time at the CBI headquarters.

They said Rishi, chairman of Vectra group, was asked about the ownership pattern of Tatra-Sipox UK and Vectra group and reasons for changing the payment currency from US dollar to euro for supplying the trucks to the Army through the BEML.

The CBI had registered a case naming Rishi and unnamed officials of Defence Ministry, Army and BEML on March 30 for alleged criminal conspiracy, cheating and relevant sections of Prevention of Corruption Act.

The CBI is probing alleged irregularities in assigning of supply from Czechoslovakia-based Tatra, with which the agreement was originally signed in 1986, to the Tatra-Sipox UK owned by Rishi in 1997 showing it as Original Equipment Manufacturer and the fully-owned subsidiary of Czech company, they said.

A CBI spokesperson had said this was against the provisions of Defence Procurement Procedure for supplying vehicles to the Indian Army on the basis of orders placed by the Ministry of Defence.

“It is further alleged that in this manner, vehicles worth thousands of crores have been supplied to the Army," the CBI spokesperson had said. — PTI
Army Chief did not leak letter to PM: Intelligence Bureau sources

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New Delhi:  The confidential letter written by Army Chief General VK Singh to the Prime Minister was not leaked by the General or his supporters, say sources in the Intelligence Bureau, which has just begun its investigation in the matter. The agency is working on collecting more information.  It  has been asked to identify the mole, who will, according to Defence Minister AK Antony, receive the "strongest punishment under Indian law."

The letter, dated March 12, warns that the army is stuck with obsolete equipment. After a section of opposition leaders blamed him for the leak, General Singh issued a statement describing the leak as "treason" and said that the allegations against him were "a cynical approach to tar my reputation."

The Defence Minister then said that all three serving chiefs enjoy the Government's confidence. That helped to diffuse unprecedented tension between the Chief and the Government.

Opposition parties have agreed that the leak of the letter, as much as its contents, is alarming.

The CBI is also looking into the Army Chief's allegation that he was offered a bribe of Rs. 14 crore to clear the purchase of "sub-standard" trucks, six months after he took office in 2010. The disclosure led to a new scrutiny of defence procurement. A CBI case has been registered against Ravi Rishi, the head of Vectra, which supplies trucks to the army via BEML, a defense public sector undertaking. In violation of basic rules, the CBI alleges, Vetra has used a middleman in its dealing with the army. Defence equipment is meant to be bought directly from the original manufacturer. The FIR or case field by the CBI also mentions unknown defense and BEML officials. Vectra provides parts for Tatra trucks which are then assembled at BEML in Bangalore.

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Defence Minister Antony meets service chiefs, wants acquisitions streamlined

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New Delhi:  After two important meetings, both attended by Army chief General VK Singh, Defence Minister AK Antony has asked the Army to streamline its acquisition process and has favoured more financial powers to the three services if it can lead to speedier acquisition of equipment. He met the chiefs of all three services today and took some more major decisions.
Mr Antony's instructions come soon after Gen Singh wrote to the Prime Minister on what he called the lack of the Army's war preparedness. Gen Singh raised concern over big gaps in the Army's procurement of crucial equipment in his letter, saying the Army was stuck with obsolete machines. That confidential letter, dated March 12, was leaked into the public domain.
Under pressure after being targeted by political opponents in Parliament all of last week, Mr Antony has now asked officials of his ministry to examine the possibility of compressing the time for technical evaluation and trials for procurement of equipment. He said in a press release that he was all for "delegating more financial power to service headquarters if it can lead to speedier acquisition of equipment, platforms & systems for the services." He directed the Army to "streamline its acquisition process in a manner such that accountability can be fixed in case of any slippages."
A long-term integration purchase plan (LTIPP) and 12 defence plans were also cleared at the Defence Acquisition Council meeting that Mr Antony chaired and the three chiefs attended. The LTIPP lists long term requirements of the Armed Forces over 15 years and envisages private sector participation. Some changes to the "offset policy" were also discussed - the "offset policy" mandates that foreign manufactures have to source at least 30 per cent of their products and services through Indian or joint venture companies registered and manufacturing in India, for any contract of over Rs. 300 crore.
The minister will meet the Army chief and other senior officials next month to review progress on decisions taken today.
In the morning, Mr Antony chaired a meeting attended by Gen Singh and other senior defence officials to discuss acquisition and procurement. Then in the afternoon, he chaired the defence acquisition council meeting with all three chiefs - General Singh, Air Chief Marshal NAK Browne and Admiral Nirmal Verma - and the heads of the Defence Research and Development Organisation (DRDO) and the Coast Guard, the Defence Secretary and Defence Production Secretary present.
This is for the first time after last week's controversy involving the Army Chief, that the Defence Minister chaired meetings with General Singh present.
Last week, the Army Chief made the startling revelation that he was offered a bribe in 2010, only six months after he took office, to okay what he called "sub-standard trucks" for the Army. After the General made a complaint, the CBI is investigating the sale of 7000 trucks to the Army by a UK-based company named Vectra, which holds a majority stake in a Czech company Tatra that makes truck parts that are assembled by the public sector unit BEML (Bharat Earth Movers Limited) for the Army.
Then, the letter written by the Army Chief to the Prime Minister became public, causing a storm. In the letter, Gen VK Singh spoke about what he called the lack of the country's war preparedness. Among the things he brought to the PM's notice was that the "entire tank fleet (was) devoid of critical ammunition to defeat enemy tanks." Gen Singh warned that India's air defence was 97% obsolete, which "doesn't give the deemed confidence." The Infantry, he said, was "crippled with deficiencies of crew-served weapon and lacked night-fighting capabilities" and 'elite Special Forces are woefully short of essential weapons." The Army chief also warned of "large-scale voids in critical surveillance." 

General Singh, however, issued a three-para statement on Friday emphasising that these developments should not be read as a battle between the government and the Army. He said that "rogue elements are trying to create a schism between the Defence Minister and the chief." His comments came after the Defence Minister said that "all three service chiefs enjoy the confidence of the government"- a declaration that sought to rescue his relationship with the chief from an unprecedented low.

General Singh and Mr Antony met at a function last evening and were seen engaged in a one-on-one conversation.

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Antony directs Army to streamline acquisition
Press Trust of India / New Delhi Apr 02, 2012, 18:10 IST

In the backdrop of Army chief Gen VK Singh raising the issue of shortage of equipment, Defence Minister AK Antony today directed the force to streamline its acquisition process to fix accountability in case of delays in procurement.

In an hour-long meeting with Gen Singh and senior Army and ministry officials to review proposals relating to capital acquisition in the service, the minister favoured providing more financial powers to the services' headquarters if it helped in speedier acquisition of equipment and weapon systems.
Antony directed the Army to streamline its acquisition process in such a manner that accountability can be fixed in case of any slippages. He also asked the ministry and the Army officials to examine the possibility of compressing the time taken for technical evaluations and trials," ministry officials said.

He also asked "the ministry and the Army officials to examine the possibility of compressing the time taken for technical evaluations and trials," they said.

Ministry officials said the meeting was in continuation of the earlier review meetings held in September last year and January this year.

Another meeting would be held next month to review the progress made on the decisions that have been taken today, they said.

Besides Gen Singh, the meeting was attended by Defence Secretary Shashikant Sharma and a number of other senior ministry and service officials.
Army Chief, Defence Minister to discuss procurement
Press Trust of India / New Delhi Apr 02, 2012, 13:49 IST

Army Chief Gen V K Singh will have a meeting with Defence Minister A K Antony to discuss procurement projects for the Army, their first official meeting days after his letter to the Prime Minister on the poor state of defence preparedness got leaked.

The meeting will be held to discuss the capital acquisition projects of the Army which will be attended by Gen Singh along with the top brass of the Defence Ministry, Ministry officials said.
The meeting comes in the backdrop of the Army Chief's letter to Prime Minister Manmohan Singh in which he had raised issues about lack of ammunition for the tank fleet and obsolescence of the air defence system of the Army.

The leakage of the letter in the media had triggered a controversy and the CBI is looking into the matter.

A separate meeting of the Defence Acquisition Council will also be chaired by Antony. It will be attended by the Army Chief as also Navy Chief Admiral Nirmal Verma and Air Force Chief Air Chief Marshal N A K Browne.

The DAC, the apex body of the Defence Ministry, will discuss procurement proposals relating to the three Services, DRDO and the Coast Guard.

The DAC will also discuss the Long Term Integrated Perspective Plan (LTIPP) and changes in the offsets policy under the Defence Procurement Procedure (DPP), they said.

The LTIPP will list all the requirements of the armed forces for the next 15 years and will help in enabling the private defence sector players to prepare them to meet the requirements of the armed forces.

The offsets policy, which mandates at least 30% worth of defence contracts above Rs 300 crore to be invested back into the country, will also come up for discussion at the meeting.

The last DAC had also discussed the issue but due to disagreements over certain issues, it was postponed for the next meeting.
New details emerge on Tatra truck deal
B G Verghese: India's rotting defence establishment
The civil-military confrontation shows that integrating the defence ministry and reforming procurement are overdue
B G Verghese / Apr 03, 2012, 00:55 IST

The disgraceful civil-military crisis India has witnessed denotes complete failure of leadership on the part of the army chief and the defence minister. Rather than try and paper over the cracks, both should go. The honour and security of the nation are far more important than small egos, “goodness”, petty party and civil-military infighting, and a frightening public tendency to suspect conspiracy and corruption at anybody’s prompting. The larger and far more important issue that must be addressed is the dismaying exhibition of deep systemic and structural rot for which successive governments, across parties, must take responsibility. Indecision, drift and factionalism, not just on defence issues, have become the hallmarks of governance and politics. The role of sections of the media in all of this has been less than glorious.

After a wholly unnecessary and unseemly age row, the army chief casually informs the country through the media that a year or more ago he was offered a Rs 14-crore bribe by a just-retired lieutenant-general to facilitate purchase of what he considered substandard and overly priced trucks. This was an extraordinary and irresponsible stance. Why make that disclosure now? The chief, however, properly reported the matter immediately to the defence minister, who asked him to reduce the matter to writing and initiate action. The chief did not wish to pursue the matter, while the minister demurred, since there was nothing in writing.
SOME TIME back, leading industrialists wrote ‘open letters’ to the Prime Minister inviting his attention to the ‘paralysis’ in the government while dealing with serious problems and challenges faced by the Indian economy. They pointed out that the government is showing great incapacity to tackle economic problems. If the leading industrialists have been at their wit’s end while dealing with a ‘paralysed’ governmental machinery at the centre, the Chief of Staff VK Singh has set the cat among the pigeons by alleging that the political executive and civil bureaucracy of the Ministry of Defence are completely blind and deaf while dealing with the problems of ‘ill-equipped’ armed forces of the country.

The Congress-led UPA government lost its credibility when the Supreme Court had to intervene to see that proper investigations are held for finding out the real truth behind 2G spectrum scam in which the minister and bureaucracy of the telecom ministry are suspect. As if misuse of powers by the government in telecommunication was not enough to paint the UPA government as ‘corrupt’, the coal ministry is in the waiting to be exposed by the Comptroller and Auditor General’s Report for handing over coal mines to individuals at the whim and fancy of the coal ministry.

Indians are very sensitive if anything goes wrong with the army because it is considered as a protector. After fighting five wars with Pakistan and China, not only has the army proved it competence, it is considered a ‘guarantor’ of national security. Army is in the news for wrong reasons and its impact will be felt even after General VK Singh leaves the office of the Army chief. He has alleged that India lacks modern arms to fight a war and it is also short of ammunition which is required to face the opponent — because on March 19 the Stockholm International Peace Research Institute (SIPRI) in its annual report has stated that since the Kargil war of 1999, ‘India has been steadily buying arms and ammunition.’

Not only this. India is the largest arms’ importer. From 2007 to 2011, 10 per cent of the global arms were imported by India. Further, because of inadequate domestic defence production, 70 per cent of the total defence expenditure is directed for purchasing India’s requirements for defence from imports. The SIPRI annual report mentions that ‘India has long been a major purchaser of weapons. Now it is the biggest in the world.’ It is not without reason that all major arms exporters have assembled at Def-Expo to show their defence equipment for exports. It has been estimated that India may spend more than 100 billion sterling pounds in the next 15 years for the purchase of arms. India perceives Pakistan and China as a ‘security threat’ and always keeps an eagle’s eye on arms and equipment of armies of these two countries.

While Pakistan imports major requirements of its arms from ‘friendly China’ and receives military aid from the United States to equip its professional armed forces, China during its last two decades of consistent economic growth has increased its military budget. The budget announced on March 4 showed an increase of 11 per cent, about $100 billion. It is not without reason that the Chinese describe their military as a ‘formidable regional force’ and they have stated that ‘the military spending increase was in line with Chinese economic development’. India has never hesitated to declare itself as a ‘nuclear weapons state’, but the reality is that country’s own Army chief maintains that India neither has the latest military equipment nor does it buy the best arms because of rampant corruption.

The larger issue is that the republic is leaderless and headless. If anything goes wrong, the alibi is that the quality of governance is suffering because of the ‘compulsions and constraints of the coalition partners’ and DMK support was essential to keep the UPA government in office. Is there any ‘compulsion of coalition’ in dealing with the problems and allegations of defence forces? National security issues have to be directly dealt with by the Prime Minster and the defence minister, who belong to the Congress party. Can it be surmised that the Prime Minister has no authority to oversee the affairs of the defence ministry led by the Congress party defence minister? Are these ministers managing autonomous empires where the Prime Minister’s writ does not run?

THE STORY does not end here. Every political crisis faced by the Congress-led UPA government is responded by a counter-attack on the working of autonomous institutions of governance like the Comptroller and Auditor General (CAG) or the Election Commission. If CAG points out that huge financial loss has been incurred by the country the way A Raja, the communication minister, dealt with the spectrum issue, Kapil Sibal, a minister, challenges the CAG and maintains that ‘zero loss’ had occurred and CAG estimates were wrong.

If the Election Commission censures Salman Khurshid, a minister, for violating the model code of conduct during the Uttar Pradesh assembly elections, the minister responds that the Election Commission could ‘hang him’ but he would continue to campaign by violating the Election Code. If the Supreme Court suggest that ‘all national resources’ should be ‘auctioned’ by the government in a transparent manner, the confused government wishes to ask for a ‘review’ of this judgement. Thomas Hobbes, a philosopher, described a state of society where there was no ‘single sovereign’ where everyone was fighting a nasty, brutish, war against everyone else’. In India, every institution of governance like judiciary, parliament, Election Commission, CAG are all fighting their own battles because the political executive is not firmly in the drivers’ seat at the centre and a country cannot be governed without central friendship and guidance. An explanation for the present leadership crisis is that the Prime Minister is not head of the government in the real political sense of the term. It is a strange situation where chief ministers of states are in command of their governments and Prime Minister of India has to look over his shoulder before he takes any important decision in public affairs.

The explanation for the prevailing ‘paralysis’ and ‘crisis’ seems to be that in a fractured and fragmented multiparty political system, the head of the political executive at the centre does not have any social constituency of his own which can come into the public to support the Prime Ministers’ actions and decisions.
The nation has just witnessed the Army Chief take on the political class. After the bitter date of birth row, General VK Singh’s disclosures on the bribe offer and gaps in armed forces’ preparedness have led to debates all around. The question being asked is - whether the Chief should be sacked for brining to public domain a highly secretive matter.

JD(U) chief and a strong voice of Parliament, and also convener of the National Democratic Alliance (NDA), Sharad Yadav spoke one-on-one with’s Swati Chaturvedi about General VK Singh, Anna Hazare and Lokpal Bill.

Following are the excerpts:

Q. We are the largest buyers of weapons and armaments for our defense forces and according to Army Chief General VK Singh, 97% of our weaponry is obsolete. What do you think about the General’s disclosure?

A. Talking about military operations no can say with such precision that the information is correct. Having said that, I am extremely disappointed by what General VK Singh has said. As a matter of fact I proposed Defence Minister AK Antony to sack General Singh a couple of months back when he was embroiled in the age controversy. The Indian Army is an institution of repute and if a Chief of such an honorable institution is into such deeds, he should be sacked immediately on disciplinary grounds.

Q. It’s ironical that when most of the parties were rooting for Army Chief’s removal, BJP held a different opinion. Can you comment please?

A. People who are running the government cannot be swayed by the interest of any one political party. It will do what will be the best for the welfare and security of the nation. Why do you think people chose their representatives in Lok Sabha? To ensure that they perform all their duties and responsibilities and not just get influenced by any party.

Q. Mr. Yadav, you just raised a valid point here. Do you feel such differences create a vacuum in the decision-making process thereby damaging India as an institution?

A. Absolutely, these people through their action pull down the credibility of our nation significantly. State is run by the institution. An Army Chief is an institution in itself, much like the Election Commission or Parliament. It should be given due honour. And to uphold that dignity all unscrupulous agents should be removed immediately. General Singh should have been sacked just when he got embroiled in the age controversy.

Q. But here General Singh has a different story to tell. He alleges that Rs 14 crore were offered to him as bribe, which left not only the Defense Minister but the entire nation shell shocked? Don’t you think people would lose their confidence this way?

A. About the matter, I spoke to the Defense Minister, my good friend AK Antony. But to my disappointment he didn’t take any strong decision. He should have acted then and there. A defense minister does not require any proof of evidence. If the Army Chief was at fault in the first place, he should have been removed on disciplinary grounds. Mr. Antony relied on paper work which only gave time for the General to strengthen his stand.

Q. Do you think General Singh’s expose is an attempt to gain ground after the age row and a stunt to tarnish the political establishment of India?

A. Look, this is such an unpleasant affair that there is no point discussing it anymore. However, out of all this, one thing is apparent that this government is so weak that it cannot handle or deal with any political or for that matter non-political crisis.

Q. Coming to Anna, why did you support him in the first place when you literally piloted a censure motion against him? Why did you give so much importance to Team Anna?

A. No, no… this is completely false. I have never supported a person. They are talking about us but they have no idea what we do. Majority of MPs are good and have done their bit to fight corruption. We are the ones who have exposed 2G and CWG scams and sent the corrupt to jail. Only Parliament can fight the issue of corruption. It has to set terms of reference to strengthen institutions to fight corruption. Parliament and corruption cannot go together.

Q. Team Anna claims that 162 MP sitting in Parliament are corrupt. And the politicians with clean image are inadvertently trying to safeguard them. What do you have to say about that?

A. Team Anna said that Parliament is an ineffective institution. Team Anna is following a trend to criticise parliamentarians and steps must be taken to restore belief in Parliament. Slamming MPs is a trend now. By using derogatory language against parliamentarians, the civil society members are only tarnishing the foremost institution of democracy, and that is Parliament. India is not like China where what you say becomes a rule. Here everything needs to be looked intensively and the pros and cons need to be assessed for a balanced way to work out things.

Actions of Team Anna were a threat to liberty of action among the members of Parliament. And this kind of will which kills freedom itself is not freedom but anarchy.

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