Friday, 22 January 2010

Army, MoD lock horns over ban on Singapore Technologies


A 155mm howitzer being transported, slung under a Chinook helicopter in Afghanistan.


by Ajai Shukla
Business Standard, 22nd Jan 09

The Ministry of Defence (MoD) faces accusations of serious contradictions in the apparently ill-considered ban that it imposed last June on arms vendor, Singapore Technologies Kinetic (STK). The ban was slapped on 7 companies after the 19th May 09 arrest of former Ordnance Factory Board (OFB) Chairman, Sudipta Ghosh, for corruption.

The ban on STK is all but collapsing. Next month STK’s 155 mm towed gun will take part in firing trials --- cleared by the MoD --- for selecting a new-generation artillery piece for the Indian Army. STK’s Lightweight Assault Rifle will also begin army trials in February. Inexplicably, though, the ban remains on STK’s 155 mm Pegasus ultralight howitzer, which the army wants urgently for India’s mountain divisions.

The Pegasus trials remain blocked despite the efforts of army chief, General Deepak Kapoor --- himself an artilleryman --- who requested the MoD for trials to continue alongside the CBI’s investigations, in order to save time. Rejecting that request (reported in Business Standard on 18th July 09. Full details of the army’s request and the MoD’s rejection is posted on Broadsword… click back to July 09), the MoD approached Washington to allow India to buy the American BAE Systems M777 ultralight howitzer.

The army, however, wants both options open, not a single-vendor situation in which the US-based company can dictate its price. Despite the MoD ban, the army chief has publicly declared that the STK howitzer remains an option.

On 14th Jan 09, General Deepak Kapoor told the press, “We have one gun (the Pegasus) waiting for trials and, at the same time, we have approached a foreign country (the US) for purchasing an ultralight howitzer directly. We will follow both routes. The moment one of them is successful, we will go ahead with that purchase.”

But MoD sources say they are not rethinking the ban on the Pegasus; they say the CBI has solid proof that STK paid money into Ghosh’s bank account in Singapore. Asked why the CBI has failed to file charges against Ghosh, who was freed on bail last July, they have no answers.

Now STK has also --- for the first time --- publicly protested the ban. Last week, STK CEO, Brigadier-General Patrick Choy, revealed to the press in New Delhi that he had travelled to India last year to assist the CBI in its investigations into Ghosh’s alleged corruption. Choy said that he had invited the CBI team to Singapore for a full audit of STK, promising that he would fully open the company’s books to investigators. The CBI has not, so far, responded.

STK first encountered the unpredictability of the Indian defence market when it flew a Pegasus howitzer into India for trials last year, in response to an MoD request. On 5th June 09, just as the Pegasus reached the Pokhran Field Firing Ranges in Rajasthan, a media statement from the MoD spokesperson announced that STK had been banned. To this day, the MoD has not officially intimated STK about any ban.

After remaining stranded by the roadside in Pokhran for several days, the Pegasus was moved to Gwalior, where it remains housed in an army unit.

The Indian Army’s artillery modernisation plan has remained stalled, for various reasons, for over two decades; the ultralight howitzer is only the latest procurement fiasco. The army’s 180 artillery gun regiments --- each having 18 guns --- have not received any new weaponry since the Bofors gun was bought in the late 1980s.

15 comments:

NJS said...

India should not completely depend on US, it should have options . as per TOT of guns ST seems to be more better than BAE, india have more past experience on BAE supply/tot in hawk deal.
India should review the ban on South african defense vendors also , due to india's ban PAK/China is getting their high tech as much as possible easily .

Tejaswy said...

Congress at it again...Too bad,,,

Anonymous said...

MoD is killing competition for US on the pretext of fighting corruption. Companies just want to do business with us. Corruption or clean business is choice of our leaders/decision makers.

If FMS is a way to choose defence equipment then who gets to decide which country it should be bought from and based on what criteria? Why US, why not France, UK or elsewhere?

Anonymous said...

Will the US sell the latest M777A2 Howitzer to India which is used by its army?

Anonymous said...

NJS, see the discussion in post #712 in an international defence forum here:
http://www.defencetalk.com/forums/army-security-forces/indian-army-news-discussion-4114-48/#post187547

Anonymous said...

Isn't General Deepak Kapoor supposed to 'retire' because of deafness that was diagnosed well after it happened?

Where is my tin foil hat?

Anonymous said...

Antony is an i----. His love for clean image is ensured by sheer ineptitude and incompetent handling of his portfolio. Companies only want business. Whether there will be corruption or not depends on the politicians and the bureaucrats, not on the companies themselves.....and guess what? we are yet to see any bureaucrat or politician punished for corruption, even after so many scams.

Jerry said...

Antony's greatest strength which got him the job seems to also be his greatest weakness. A real pity....

NJS said...

To, Anon @ 16:35 , Nice forum Friend., The Defense talk forum members also praised Ajai's comments of Broadsword about Banning vendors by MoD.

Anonymous said...

@ Anon 16:05

http://www.indian-military.org/news-archives/55-indian-army-news/380-india-eyes-light-us-howitzers-bae-m777a1.html

Anjaneya said...

is there any correlation between the army receiving the lions share of the defense budget and large number of corruption cases against it?
I believe there is.
I believe that if the defense budget is lowered and the army is given greater leeway in procurement, corruption will go down both by virtue of keeping MOD out of the gravy train AND due to the proverbial buck for a piece of equipment stopping at the armys door.
As a corollary, we dont see as many cases of malpractice in procurements done by the Airforce or Navy. Their portion of the defense budget are lower than the army in my understanding, which forces them to go for the best bang for buck in the most efficient manner.

Anonymous said...

http://www.dsca.mil/PressReleases/36-b/2010/India_09-79.pdf

DSCA has made the announcement of FMS sale for the M777

Anonymous said...

IA buys 145 M777's for USD647million (or USD4.46million/each)

But US buys 87 M777's for USD176millions (or USD2.02million/each)

http://asmcommunity.asminternational.org/portal/site/www/AsmStore/ProductDetails/?vgnextoid=3427939c2875b110VgnVCM100000701e010aRCRD

Why is the IA paying 200% more for M777's?. Is it because there is no other competitor?

Anonymous said...

Read this story on BAE Systems being handed £286m criminal fines in UK and US: http://news.bbc.co.uk/2/hi/business/8500535.stm

Anonymous said...

U.S. delivers 48 field artillery cannons to Pakistan Army
[13/February/2010]

ISLAMABAD, Feb. 13 (Saba) -- The United States delivered 48 self-propelled field artillery cannons to the Pakistan Army on Saturday at the Malir Cantonment in the southern port city of Karachi, the U.S embassy said, according to Xinhua.

The delivery marks the completion of a total purchase of 115 field artillery cannons by Pakistan through the U.S. foreign military sales/foreign military finance program, the embassy spokesman said.

The FMS/FMF case was initiated by Pakistan in 2006 and enabled the government of Pakistan to obtain the cannons from the United States at a greatly discounted rate.

During the last three years, U.S. civilian and security assistance to Pakistan has totaled more than 4 billion dollars.

Assistance provided and delivered has included support for medical aid, school refurbishment, bridge and well reconstruction, food distribution, agricultural and education projects, 14 F-16 fighter aircraft, 10 Mi-17 helicopters, more than 450 vehicles for Pakistan's Frontier Corps, hundreds of night vision goggles, day/ night scopes, radios, and thousands of protective vests and first- aid items for Pakistan's security forces.

In addition, the U.S. funded and provided training for more than 370 Pakistani military officers in a wide range of leadership and development programs covering topics such as counterterrorism, intelligence, logistics, medical, flight safety, and military law.

U.S. Army Brig. Gen. Michael Nagata, U.S. Office of the Defense Representative-Pakistan deputy commander, officially handed over the M1095A5 Howitzer self-propelled cannons to Pakistan Army Brigadier Farrukh Saeed, 25th Mechanized Division Artillery Commander, during a ceremony in Karachi. The event was attended by Steve Fakan, U.S. Consul General to Karachi, and more than a dozen U.S. and Pakistani military representatives.