Monday, 12 September 2011

Defence ministry flouts norms for BEL

The Samyukta electronic warfare (EW) system, built by DRDO, with important contributions from the Indian private sector. The MoD is now trying to shut out the latter on grounds of security


By Ajai Shukla
Business Standard, 12th Sept 11

Tomorrow, Defence Minister AK Antony is poised to violate the MoD’s own procurement rules by awarding Bharat Electronics Limited (BEL) a Rs 1800-2000 crore contract for an electronic warfare (EW) system for the army. Bypassing the army’s written reservations, the MoD is citing security considerations to hand BEL this single-source purchase.

An EW system electronically scans the enemy’s radio, radar and data emissions to gather intelligence. At key moments in battle it broadcasts powerful electromagnetic surges to cripple the enemy’s electronics and communications.

The MoD’s apex Defence Acquisition Council (DAC) meeting tomorrow will rule on the procurement of “Track and Wheel Based EW Systems”, mounted on armoured vehicles for India’s mechanised strike corps. The MoD plans to categorise this acquisition as “Buy Indian – BEL”. The Defence Procurement Policy, or DPP, has no provision for such a category.

The categorisation process is crucial, as it decides whether the MoD will buy the concerned equipment off-the-shelf from the global arms bazaar; or buy technology and build it in India; or develop the equipment in India. Accordingly the procurement is categorised as “Buy Global”; “Buy & Make”; “Buy & Make (Indian); or “Make”. When the MoD wants Indian companies to compete for a particular contract, it is categorised as “Buy Indian”.

BEL has campaigned hard to get this massive contract without competition. Backing it is the MoD, which owns BEL. They argue that EW systems are so secret that Indian companies like Tata Power and L&T cannot be trusted with them. Backstopping that argument is a letter from then Deputy National Security Advisor Shekhar Dutt (who, as defence secretary, enjoyed a close association with BEL) reserving such systems for the public sector.

This viewpoint is hotly contested. Dr APJ Abdul Kalam, as DRDO chief gave a private company --- Tata Power (Strategic Electronics Division), or Tata Power SED --- a key development role in the Samyukta, India’s first homegrown EW system.

Also opposing this viewpoint is the army’s top acquisitions manager and deputy chief, Lieutenant General JP Singh. He has consistently told the MoD that competitive bidding will get the army better EW technology at cheaper prices than a contract gifted to BEL. Business Standard has learned that the army has sent a strong letter to the NSA’s office arguing that security is not an issue and asking for an appointment to make a presentation to the NSA.

But before that appointment could materialise, say senior MoD sources, freshly appointed defence secretary Shashi Kant Sharma hurriedly convened a meeting in early August to recommend that the DAC clears the single-source award of the tender to BEL on 13th September. Lt Gen JP Singh, who was not in town, could not attend that meeting. In his place was the army’s vice chief, Lt Gen AS Lamba, who rubber-stamped his okay, ignoring the army’s long-held position.

Three serving lieutenant generals have told Business Standard that Lt Gen AS Lamba, always known for a non-confrontationist attitude, is treading particularly carefully at the moment. He would be the senior-most candidate for army chief if General VK Singh were to resign over the snowballing date of birth issue.

Lt Gen Prakash Chand Katoch, who headed the army’s information systems branch, points out that the army buys EW systems from abroad. “So why can’t private Indian companies be trusted to build them? Sheltering behind security to hand the order to MoD enterprises is unfair. The army insists on getting source codes from the vendors and, therefore, can easily superimpose the security algorithms on them. Get the algorithms from the DRDO, and ask the cheapest bidder to build the system. But BEL keeps trying to get a sweetheart deal for building the entire system,” says Katoch.

The MoD, approached for a comment, has remained silent. In 2010, when the MoD first tried to hand BEL the contract for a “Track and Wheel Based EW system”, Antony’s deputy, MM Pallam Raju declared, “I think that we have a responsibility to the DPSUs since [their] ownership rests with the Government of India.”

The decision that the DAC takes tomorrow will resonate through the forthcoming award of Rs 20,000 crore worth of EW development contracts in the next 5-7 years. In the balance are orders for new EW systems for mountains, each worth Rs 1000 crore. Seven to eight EW systems will be bought for deserts/plains, each worth about Rs 1000 crore. The army will buy an unspecified number of heliborne EW systems, each worth about Rs 500 crore. The precedence set tomorrow could apply to all of these. In any case, say private Indian vendors that want to offer their own EW systems, being nominated for this first tender will allow BEL to cross-subsidise its bid for all the others.

15 comments:

Anonymous said...

Does BEL make or just buy from Israelis and stamp it with BEL seal ?

If BEL makes it, why cry ? as it didn't reach foreign hands right ?

Anonymous said...

The problem is Business Standard is not as loud a voice as, say, Times of India, where many people read and the response would usually be quick and overwhelming. Ajai, can I ask you to publish such sorts of articles more aggressively in a broader array of media? Thakns.

Manne said...

And people lament that Pvt sector does not invest in defense R&D. Bah!

- Manne

Hari Sud said...

Buy local or abroad is an argument which has been debated for years. Whether buy the very best with global tendering or buy at home and keep the foreign bidders and foreign bidders tied to Indian companies out of the most critical hardware.

For years the foreign bidders argument won because India never had capability to make high technology items.

Now the situation is changing. I am sure that in the present case buy at home argument will win.

Technically, it is possible that the foreign hardware is better. The latter comes at a price. Consider; during a battle of 300 tanks on each side engaged in life and death situation, you would not want the enemy in full knowledge of your capability.

There is always a possibility that enemy may buy from the same vendor similar hardware just to gain knowledge of your system.

This already happened.

Consider the Weapons Locating Radar. Both India and Pakistan has same vendor supplied hardware but a bit different versions. In a battle situation, both sides know what is other`s capability. That is very unfortunate situation. Battle will be won only, if the enemy does not know what you are capable off.

Cheers

Hari Sud
Toronto

Anonymous said...

security... defence... intervention... all these are GOI... responsibilities... and we all know when GOI capitulated... at Lahsa... at Arunachal... at Aksai Chin... due these same favouritsm... this same favouritism to BEL DPSU... is to keep the inefficenties and unproductivities... created by The trade unions... MOD ministers... state & Cabinet... should show guts to fight... ineffiency and unproductivity... As we cannot... capitulate... one more time to the Dragon... as our very existence is on the line...

Mr. Ra said...

The reason furnished for flouting the norms is standing like an inverted pyramid.

Anonymous said...

Normally BEL is front for sweetheart deals for foreign entities. I wonder who is foreign puppeter in this case!

Abid said...

Dear Ajay Sir,
The term Flouting the Rule is not derogatory; if such flouting benefits our country and any of our enterprises. E/W warfare is very sensitive and critical issue in modern warfare where the battle is one by those who protect data and get more information. We have always purchased weapon systems from abroad; and the suppliers have harassed us in support and maintenance. One another day the same supplier sells the technology and systems to our adversaries; thereby compromising our own secrecy. Why not permit BEL; which is premier institution; and has developed this EW system with partnership with Tatas. Its good to put trust in our engineers, establishments by flouting any rule.

Anonymous said...

"Backing it is the MoD, which owns BEL. They argue that EW systems are so secret that Indian companies like Tata Power and L&T cannot be trusted with them."


and


"t Gen Prakash Chand Katoch, who headed the army’s information systems branch, points out that the army buys EW systems from abroad. “So why can’t private Indian companies be trusted to build them? Sheltering behind security to hand the order to MoD enterprises is unfair. The army insists on getting source codes from the vendors and, therefore, can easily superimpose the security algorithms on them. Get the algorithms from the DRDO, and ask the cheapest bidder to build the system. But BEL keeps trying to get a sweetheart deal for building the entire system,” says Katoch."



........ Both of them are right. It should be like this.. The deal may go to BEL but only as prime contractor TATA and L&T should contribute as well. The primary lab should be DRDO. No question of any foreign involvement. MoD should be careful about possible chinese and US systems which usually carry bugs.

Anonymous said...

From most of your article it seems you have got some unprofessional bitterness towards AK Antony. Try to present it like a professional reporter not like a bad mother-in-Law. Please take this in the right spirit. At least I am happy you stopped kissing Boeing in the engine exhaust. Besides all this I like your articles.

Heberian said...

Brilliant new layout, Col. Shukla! Very nice, and also easy on the eyes!

Anonymous said...

nice new layout of blog ajai ji.

Anonymous said...

The biggest bane of the Indian defence forces is the PSUs like BEL whom we have to keep alive by entrusting our equipments. As for BEL, not a single thing that this company has made is of any use to man or beast.The ammount of money they charge is astronomical to say the least. The country's top secret project monitored directly by PMO too has many issues because of BEL. They are such laggards that they do not even care to ask for money that is due to them.GOD save the forces...........

Girish said...

ther's nothing wrong in this. promoting a psu for EW is ok. may be L&T and tata may be asked to cooperate with BEL.

Anonymous said...

Having worked on SAMYUKTA platform I can tell u with conviction that it is worthless. And having worked on ELTA (Israeli) Sys i can tell you it is amazingly good. If DPSU can not produce quality thn why are Services forced to use thr sub standard products.