India’s decision to cancel a $740-million helicopter contract with Italian-owned AgustaWestland last week added to an already long list of failed defence deals which have left the military short of crucial equipment.
The deal to supply 12 transport helicopters, which were to ferry India’s top-most leaders, was signed in February 2010, but was terminated last week after an investigation in Italy in 2013 brought to light alleged bribery.
Italian authorities arrested Giuseppe Orsi, the chairman of AgustaWestland’s Italian parent company Finmeccanica, while India’s ex-air force chief SP Tyagi is under investigation in New Delhi.
Graft allegations in India’s big-ticket defence imports have scuppered other deals in the recent past, stretching back to the 1987 Bofors artillery guns scandal and another deal for 197 helicopters in 2007.
Rahul Bedi, for Jane’s Defence Weekly, blames “corruption, lack of decision making and excessive bureaucracy” as the three main problems that block India’s military purchases.
After the Bofors debacle, India’s artillery upgrade hit another airpocket in 2009 when the defence ministry blacklisted seven firms including front-runners Singapore Technologies and state-run Israeli Military Industries over corruption concerns.
The contract for front-line helicopters capable of operating at high altitude which was cancelled in 2007 has still not been re-issued.
At the same time, India’s military needs are growing, with tensions on its western border with Pakistan, an increasingly assertive China to the north and growing ambitions for India’s role in world affairs.
In March 2012 then army chief VK Singh sent a letter to Prime Minister Manmohan Singh revealing in embarrassing detail alleged procurement deficiencies.
“Tanks are out of ammunition, the air defence is obsolete and infantry is short of critical weapons,” Singh wrote, later revealing that he had once been offered a bribe of $2.8 million for a contract.
A report in India’s The Hindu newspaper, quoting top personal security officers, said that the cancellation of the AgustaWestland deal “could endanger the country’s highest officials”.
Bureaucratic holdups
To counter corruption, various measures have been introduced including a requirement for all vendors to sign an integrity pact which promises ethical behaviour.
Bharat Verma, editor of Indian Defence Review magazine, told AFP that this as well as numerous levels of technical screening means that “at least 18 departments” within the defence ministry must sign off on a deal.
Each stage created an opportunity for graft between the Indian dealmakers and foreign vendors who provide most of India’s advanced hardware because of the country’s weak domestic production.
“The foremost problem is Indians creating a system where foreign vendors are forced to pay bribes,” Verma said, adding that bureaucrats and politicians involved almost always go unpunished.
Uncertainties and delays in India’s Multi-Role Combat Aircraft (MMRCA), a $10.4 billion deal for 126 fighter aircraft, is a case study in the country’s slow progress in modernising its armed forces.
The first international tenders for the project were invited in 2007 and exclusive negotiations began with French company Dassault in January 2012.
Successive deadlines have since slipped by and it now faces new uncertainty with elections due by May this year after which a change of government is likely.
Manoj Joshi, a fellow at the Observer Research Foundation, a Delhi-based think tank, told AFP that a lack of skills and knowledge in India’s bureaucracy also led to problems in defence procurement.
“Someone who is heading the animal husbandry on one day is given charge of the defence (bureaucracy) on other. (Our) civilian bureaucracy doesn’t have an expertise about the market and product which further complicates the situation,” he added. Joshi was a member of a task force set up by the government in July 2011 to study the processes and procedures related to India’s national security and come up with its recommendations to solve them. Key recommendations from the task force included bringing in military officers to key positions in the defence ministry and introducing strict long-term planning for procurement and expenditure. “Nothing has been done about its recommendations to the best of my knowledge,” Joshi told AFP.–AFP