Defence Minister A.K. Antony on Thursday defended the scrapping of the Rs.3,560-crore AgustaWestland helicopter deal, saying it helped to streamline the system by sending out a clear signal to the industry that malpractice and corruption would not be tolerated.
At the inauguration of the eighth edition of the biennial defence exhibition, Defexpo 2014, Mr. Antony said India demonstrated that in defence contracts “…everyone will get an opportunity if the product is good and prices are low. There is no need to lobby and if anybody is found guilty, punishment will be strict.”
On a replacement for the AW-101 helicopters, he said the Indian Air Force would find an alternative solution for flying the VVIPs.
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As the deal was cancelled on January 1, Mr. Antony said, the Defence Ministry also decided not to allow AgustaWestland or its parent, Finmeccanica, to participate in Defexpo.
Mr. Antony also pointed out that CBI investigations in India and hearing of the case in a Milan court in Italy were going on simultaneously. “The investigation by the CBI is at an advanced stage, and the Milan court is hearing the matter regularly,” he noted, refusing to say what action would be taken against the former Air Chief, S.P. Tyagi, who is an accused in the scam.
He insisted that such scams did not weaken the system. Following detection of other scams some years ago, the production of the Ordnance Factory Board had dropped but it was streamlined later. Now the Board was producing modern indigenous systems. While India gradually increased its indigenous production from 30 per cent to 40 per cent, it wanted to produce a major portion of equipment within the country in about 10 years from now.
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Mr. Antony declared that it would be difficult for clearances to be granted for any new capital acquisition. In reference to the Medium Multi Role Combat Aircraft contract, for which French aircraft Rafael was selected, he said the process was “going on” and had “not been settled” yet. “There were some complaints pertaining to the calculation of the life cycle costs, and that is not settled. Before taking it to the Cabinet Committee on Security we want to get the issue resolved. We do not want to take shortcuts as it is a big project.” But he insisted that the deal was almost finalised and would be cleared in the next fiscal.
As for the current financial year, Mr. Antony said the Ministry had already spent 92 per cent of its capital budget, and the rest would be utilised over the next two months. “So the major procurements would only be possible next fiscal.”
Accidents in NavyOn the recent accidents involving Naval vessels, he said that while they were a “matter of concern,” one should not ignore the fact that the Navy’s assets had substantially increased in the past 10 years, with five ships being added every year. Mr. Antony said he was told that action was being taken to prevent such accidents and that the Navy was “taking corrective actions.”
On the Army’s inability to induct new artillery in the last 30 years, he said it was because of “controversies in the past” that artillery modernisation had not been fulfilled. But now, while indigenous production was being undertaken, parallel procurement from foreign countries was being considered.
Mr. Antony said that while ceasefire violations on the India-Pakistan border had come down since the DGMO-level talks in December, the “real test” would be in summers, when incidents of infiltration increase.
He noted that China was invited for the Defexpo. He clarified that the invitation was for delegate-level participation and not equipment. However, China decided to stay away.