The VVIP helicopters bought in 2010 for over Rs. 300 crore a piece could have been procured for Rs. 160 crore each, Defence Minister Manohar Parrikar told The Hindu on Thursday, claiming that kickbacks had been a significant part of acquisition costs in the defence sector.
“The current government’s success has been in lowering the prices in many cases. Bargains, reductions and obviously one major issue of third party interventions,” he claimed, expressing satisfaction over the Modi government’s achievements in the defence sector.
The Minister spelt out plans to invite a foreign manufacturer to partner an Indian firm to make a twin-engine fighter aircraft under ‘Make in India’. “We can get the Army and the Air Force modernised without much pressure on the funds,” he said.
In a freewheeling interview to The Hindu , he also spoke about additional fighter jets for the Air Force, the appointment of the Chief of the Defence Staff and ties with China. Excerpts:
‘Will get another twin engine fighter beyond Rafale’
How do you look back at the past two years? Are you happy or still struggling with the systems and bureaucracy?
Looking back at the two years of the Narendra Modi government, I am very happy to say that what we pushed for, we have managed to achieve to a large extent. Now if you ask me whether I am happy, a person should not be happy with what he has done. So I would prefer to push still faster and still better.
What is the biggest challenge you face as minister?
In this department, the biggest challenge was the mindset created by my predecessor, Mr. A.K. Antony. He created a total shut mindset where no decisions were being encouraged at all. When people take decisions, their decision-making ability improves. When they don’t, they find every reason not to take a decision.
You are known to be an engineer and mostly relaxed. In a Ministry like defence where big money and big power operate, does that attitude work?
He [Mr. Antony] never took decisions until there were pressures, pulls or calls. In spite of the shortage of staff, we are pushing our procurement deals pretty well. If you check up Mr. Antony’s record, he procured items which are government-to-government (G-to-G) offers, P-8I, C-130, C-17. On free market procurement, he could hardly push anything.
You also inherited massive committed liabilities for contracts signed during the UPA regime, as well as pending contracts such as the MMRCA, now Rafale. All of these do not give you much leeway to make a dramatic shift to indigenous procurement?
I don’t have a problem with that. I got these people to give projections of their requirements, tentatively what will be the funds available, what are the shortages because of this, the committed liabilities of the three Services, details of projections, annual statements etc. Based on this, I can tell you this much, if the current trend continues we can get the Army and the Air Force modernised without much pressure on the funds. One major important issue I would like to highlight, which is the current government’s success, has been lowering the prices in many cases. Bargain, reductions, obviously one major issue is of third party intervention …
Can you give a specific instance where you are happy with what you have achieved?
There are cases where cost is way down than what was anticipated. Rafale, we will definitely get lower prices. In many cases we managed to negotiate and bring the prices down. In some cases, in spite of 5-6 years’ delay we are able to hold the prices.
Have you done a ballpark assessment of how much does corruption eat up in a defence deal?
I will not say that but people are aware that kickbacks are substantial. You take the case of AgustaWestland, I believe, after consultations with services and many retired people who have the knowledge as also the proposals of similar helicopters which we handle, the price in 2010 should have been nothing more than Rs. 160-170 crore. We ended up paying over Rs. 300 crore.
When do you hope to sign the Rafale fighter deal?
I cannot say that. I can tell you that the last knots are being tied.
You indicated a second twin-engine fighter. Are we going to invite a foreign company to assemble in India or are we looking at developing our own?
I am not looking for assembly at all. I am looking for a company to join with an Indian partner and to start manufacturing here by Transfer of Technology (ToT) in most of the items. I know that 100 per cent ToT may not be possible and 100 per cent indigenisation is not possible. Even with so many efforts, LCA has only around 40 per cent indigenisation.
Have you identified the proposed twin-engine fighter to be made in India?
The process is under way but that will fructify only after we complete the Rafale deal.
Have you faced any kind of pressure here or efforts to influence you?
Those who know won’t even come near me, those who don’t know will get my taste in the first instance. When I became Defence Minister, a few people made a vague attempt, not an attempt which can be quoted with name, but indirect hints to my son who told him very clearly that he talks with his father only personal and family problems. He just told them that ‘this is his email, please send an email’.
You have been very vocal about the appointment of the Chief of the Defence Staff (CDS). Why is it stuck?
It is under discussion because we realised CDS means there is a concept of jointness. Simultaneously we want to improve the teeth-to-tail ratio. All these three things have to be dealt with on a common platform. They cannot be dealt with in a piecemeal manner. We have started all three exercises. After may be two or three months, we can start implementing.
We have seen a significant strategy with respect to China in the region. Can you elaborate on our military posture in the coming years?
I don’t think we require a military posture with China. I think we need to sit and talk and finish off the issues. Both are big nations, big economies of Asia, why cannot we build up relations which were 1,500 years old, except for 1962, and sort out our problem ourselves. So, more interaction is required, which the Chinese have also gave clear indication. On the border, to avoid any problem, two more border meeting points have been added, and we may add a few more. Hotline draft agreement is in final stages. The President is now in China. So if we meet often, problems are resolved.
