Chairman and Managing Director of BEML (Bharat Earth Movers Ltd.) V.R.S. Natarajan on Wednesday denied any wrongdoing on the part of his company or the original equipment manufacturer (OEM) in the sale and delivery of Tatra all-terrain off-road vehicles to the armed forces.
He also stressed that an order for 788 Tatra vehicles for the Army placed on BEML in March 2010 “was fully complied with and most of the payments even collected.”
Variants of the Tatra vehicle were purportedly what Chief of the Army Staff General V.K. Singh had in mind when he claimed in a recent interview to The Hindu that an equipment lobbyist, in July 2010, offered him a bribe of Rs.14 crore to clear the purchase of a tranche of 600-sub standard vehicles.
Tatra vehicles are used extensively by the Army and, to a lesser extent, the Air Force and the Navy in all strategic and border areas.
Used for transportation of men and material, including missiles and heavy artillery, tanks, ammunition and Bailey bridges, Tatra vehicles' prices vary from Rs.40 lakh for the smallest 4X4 variants to Rs.1 crore for the specialised Tatra vehicles (12X12) used to mount and launch missiles like the Akash and the BrahMos.
Mr. Natarajan dismissed accusations that the Tatra vehicles being supplied to the armed forces were exorbitantly priced and could be bought off the shelf at much lower prices.
According to him, it was erroneous to compare the Tatra vehicle being supplied to the armed forces with what was available off the shelf.
“Given their specifications and level of technology, the Tatra vehicles that we supply are one of a kind. Even we do not produce them without first securing an order. So where is the question of a comparison?” Mr. Natarajan said.
Denying that the pace of indigenisation of the vehicles was “too slow,” Mr Natarajan told The Hindu that currently 60 per cent (by value) of most of the vehicle variants were being made from Indian manufactured components. He said the low numbers did not warrant a 100-per-cent indigenisation effort for the present.
According to Mr. Natarajan, BEML procured completely knocked down (CKD) kits from Tatra Sipox (U.K.) Ltd.
He said the company was based in the United Kingdom and appointed by the OEMs — Tatra Slovakia and Tatra Czech (companies based in Slovakia and the Czech Republic) — to market Tatra products in India. BEML secures orders from the Ministry of Defence (MoD), assembles, and delivers the vehicles. BEML also provides the marketing and after sales service.
Refuting the allegation that BEML was contravening India's defence procurement guidelines by procuring CKD kits through Tatra Sipox, which is neither the OEM nor a subsidiary of the OEM, Mr. Natarajan said Tatra Sipox, Tatra Cz. and Tatra Sl. were all owned by the same organisation, the Vectra Group, which is “a consortium whose majority shareholder is Ravi Rishi, an NRI entrepreneur.”
Stake in Vectra
Mr. Natarajan also disclosed that BEML, on the advice of the MoD, was looking at picking up a majority stake in the Vectra Group. With this in mind, BEML commissioned global business information providers Dun & Bradstreet to “scan and evaluate the Vectra Group.”
Mr. Natarajan dismissed the allegation that a middleman from Tatra attempted to bribe the Army Chief. He said: “When there is no involvement of our component collaborators [the OEM] in the marketing of the vehicle, why will they have a middleman? They have back-to-back orders. Also, when I have a retired brigadier as my general manager and a number of colonels who run around South Block for marketing the product, what was the need for my collaborator to canvas? And most importantly, when there is no competition where is the need for canvassing or lobbying?”
Mr. Natarajan strongly refuted the charge that the OEM/BEML were worried since there was a good chance that their monopoly to supply all-terrain vehicles could soon come to an end and that even in 2009 Gen. Singh, then the Eastern Commander, had informally tested two Ural trucks to ferry supplies to Sikkim. Gen. Singh's disillusionment with Tatra is allegedly what warranted the Rs.14 crore bribe offer.
Though Mr. Natarajan confirmed that trials for a further order of 1,200 off-road (8X8 and 6X6) vehicles were on for the Army, with the Tatra vehicle facing competition from the Ural (a product from the joint venture between Russia's Uralaz and the West Bengal located Motijug Industries) and offerings from Ashok Leyland and the Tatas, he said there was no need for the OEM or BEML to panic.
He claimed that the Ural had failed in the trials. “The final phase — hilly and desert — trials are about to start. I am confident Tatra will succeed,” he said.