By Inder Jit
(Released on 2 September 1980)
Three weeks ago, I expressed horror over the doings of the Union Energy Minister, Mr Ghani Khan Choudhury, as exposed in the Lok Sabha. I also cautioned against a “dangerous doctrine” advocated by the Union Law Minister, Mr Shiv Shankar, which sought to make corruption by ministers respectable, even lawful. The rot, I now find, is not confined at the Centre to the economic ministries and the recent scandalous deals in regard to massive imports of sugar, crude and much else. Patient probing shows that the cancer has also spread to the vital defence sector. Already, India is being likened in diplomatic circles to Indonesia, where President Suharto’s wife is popularly nicknamed “Madame Ten Percent” and is widely acknowledged as one who can put through any deal for a consideration. In fact, the Singapore High Court reportedly has before it a case filed by the widow of a top Indonesian Director claiming from Jakarta her late husband’s “legitimate” share in some $82 million collected in commissions in various State deals.
We first heard of “slush money” in a big way during the Janata rule when the Defence Ministry under Mr Jagjivan Ram decided to go in for the Anglo-French Jaguar in preference to the French Mirage and the Swedish Viggen. I remember a knowledgeable source calling me up the day the deal totalling about Rs 1,600 crores was announced to ask: Tell me, who has made how much? Don’t be shocked. Some 50 crores have passed hands.” New Delhi is again reverberating with stories which are at once ugly and frightening. Some of the city’s five-star hotels are today said to be crowded with foreign agents who incredibly enough, seem to have access to most persons in authority through local contacts — and to almost every inside information even about highly sensitive defence patterns and deals. I treated most talk as wild until some weeks ago when responsible persons, well-informed in defence matters, asserted: “Does anyone really care a damn about what is happening in Defence? Many decisions are being taken on extraneous considerations. National security is being jeopardised. We had better watch out!”
Two cases in point are specially mentioned and deserve notice. First, the Government’s decision to review two major defence deals —acquisition and manufacture of Jaguars for the Air Force and purchase of Sea Harriers for the Navy’s aviation wing. Second, the Government’s decision to go in for the West German SSK submarines at a special meeting of the Cabinet Committee on Political Affairs on June 30. Undoubtedly, Mrs Gandhi’s Government has every right to review any deal struck by the previous Janata Government or by itself in the best national interest or to go in for a particular submarine. But the circumstances in which these decisions have been taken have caused not a few eyebrows to raise even among sober circles, apart from creating suspicion. Talk of a review of the Jaguar and Sea Harrier deals, seems to have followed a somewhat breezy meeting between a VVIP and the Chairman of the British Aerospace, Sir Fredrick Page in New Delhi — and not on à demand by Air Force or Naval experts for a fresh look into the two deals.
Perhaps there is a case for reconsidering the 1978 decision to build Jaguars at HAL in Bangalore and take a fresh look at Mirage-2000 in the light of President Giscard d’Estaing’s visit to New Delhi in January this year and his reported offer of Mirage-2000 and improved versions. (India has agreed to manufacture 115 Jaguars at HAL, in addition to importing 40 in a fly-away condition and another 45 for assembly in a knocked down condition.) Perhaps, there is also a case for reviewing the project in the context of continuing cost escalation. A Jaguar, it is estimated, may cost anywhere from Rs 10 crores to Rs 12 crores each by the time it is manufactured at HAL by about 1985 as against the original price of Rs 1.8 crores quoted in 1970 when the offer was first received. But the manner in which the Government has decided not to import eight Sea Harriers under the deal in addition to the eight already ordered is regarded among Naval circles as nothing short of a dirty trick, ignoring a top-level policy decision in 1976 under which the Navy, after years of heated argument with the Air Force, was made solely responsible for maritime reconnaissance.
Dirty trick? The Union Government appears to have decided not to exercise its option and buy another 8 Sea Harriers for Rs 128 crores at the 1978 rates (as against the original rate of Rs 62 crores) reportedly on the advice not of the Navy but of the Air Force. The Air Force is said to have disfavoured the Sea Harrier on the ground that the plane was sub-sonic and had not been tried. Yet, according to other reliable sources, the Sea Harrier was tried on the Vikrant in 1972 and found satisfactory. What is more, the sub-sonic argument was advanced by the Air Force prior to the deal but over-ruled by the Government on the reported advice of the Scientific Adviser, Dr Ramanna. (The Sea Harrier, experts opine, can take on a super-sonic Mirage in close combat at low levels.) At any rate, the Navy should have been consulted and the issue should not have been left exclusively to the Air Force considering its known opinion and its understandable anxiety to settle scores. In the event of disagreement, the Scientific Adviser could always have been brought in.
Defence deals merit close public interest because of their long-term implications on national security. When purchase of certain hardware is favoured even when it is twice as expensive simply because it may mean a bigger kick-back. (A specific case mentioned is best left undisclosed in the interest of national security). Quipped an expert: “Ask for a gun these days and you are offered a missile!” Higher expenditure on one item, it needs to be remembered, hits other defence purchases.
The Union Government’s decision to purchase two West German HDW submarines and manufacture another two at Mazagaon Docks is as intriguing as the manner in which it was pushed through. In July 1979, an Inter-Ministerial Committee reportedly decided in favour of the Swedish (Kokum) as its first choice and the West German HDW as second among four. At the end of March this year, the Navy expressed itself in favour of the Swedish offer but added that in case there was any difficulty the HDW might also be acceptable. A new Inter-Ministerial team set up in April this year interestingly found both HDW and Kokum equal in merit and recommended that the final choice be made on the basis of quality of cooperation and financial considerations. On June 30, a special meeting of the Cabinet Committee on Political Affairs was held, notwithstanding the fact that Mrs Gandhi was still in mourning, and a decision taken in favour of the HDW. Representatives of the West German shipyard arrived in New Delhi on July 7 to meet the Naval Chief and discuss the contract terms. But it seems that, the Naval Chief himself was unaware of the Government’s decision at that time. The talks were, however, held subsequently.
Some observers have taken strong exception to the fact that the Government should have met on June 30 and taken a decision in favour of the West German submarine without obtaining a Memorandum of Understanding from the PRG Government, safeguarding India’s basic interest in regard to the fulfilment of the programme and tï bind Bonn on behalf of the shipyard for the supply of critical spares throughout the life cycle of the submarine, namely 25 years, and transfer of technology. But this is not a major issue. MOUs are normally finalised after a firm decision is taken. What is, however, astonishing is that the decision was announced in the Rajya Sabha in reply to a question before the MOU was obtained. Experts are clear that this was tactically unwise and only compromised India’s bargaining power. (Stiff competition from Sauro, offered by Italy, is said to have greatly helped New Delhi bring down the prices of the Swedish Kokum and the West German – HDW— as also shorten the delivery period.) Strangely, the answer in Parliament did not mention that the Government’s decision was subject to all formalities being completed to New Delhi’s satisfaction.
Defence deals merit close public interest because of their long-term implications on national security. In fact, experts are clear that national security gets jeopardised in the three following ways. First, when one service is used (or played) against another, as in the case of the Sea Harriers, with a view to securing support for a decision, ignoring the larger need to ensure that nothing is done which may in any way create bitterness between the three wings of the Defence Forces. Second, when expert opinion is disregarded (or “persuaded” to fall in line) in the acquisition of military hardware, causing frustration and demoralisation. Third, when purchase of certain hardware is favoured even when it is twice as expensive simply because it may mean a bigger kick-back. (A specific case mentioned is best left undisclosed in the interest of national security). Quipped an expert: “Ask for a gun these days and you are offered a missile!” Higher expenditure on one item, it needs to be remembered, hits other defence purchases.
Mrs Gandhi has, of late, been emphasing the need to fight corruption. Speaking on Independence Day she declared: “We are determined to end corruption from both political and bureaucratic spheres.” She has also addressed a letter recently to her Cabinet colleagues seeking their cooperation in cleaning up corruption in Government, especially in high places. But rhetoric and letters alone will not do when responsible people start feeling that national security may be threatened. Mrs Gandhi would, therefore, do well both as Prime Minister and Defence Minister to take a hard look at the major defence deals in the first instance and ask for a fresh and unbiased evaluation of India’s requirement of Sea Harriers as also of the S SK submarine offers. (The SSK submarine to submarine kill — deal is estimated to cost anywhere from Rs 400 to Rs 500, crores.) Some top experts are not happy with the selection procedure for the submarine which did not follow the healthy like-to-like basis as in the case of the Jaguar and the Mirage. A few feel that New Delhi should seriously consider Moscow’s offer of a “conventional sub” in view of India’s mounting foreign exchange difficulties.
Two cases in point are specially mentioned and deserve notice. First, the Government’s decision to review two major defence deals –acquisition and manufacture of Jaguars for the Air Force and purchase of Sea Harriers for the Navy’s aviation wing. Second, the Government’s decision to go in for the West German SSK submarines at a special meeting of the Cabinet Committee on Political Affairs.
All this is necessary in the context of certain recent oil and other scandals and hushed talk of payment of slush money by some notorious international agents with remarkable capacity to worm their way close to persons who matter whichever the Government — Janata or Congress (I). An initial payment of Rs 3.5 crores is alleged to have been made on the submarine deal in mid-June. (True, June 30 was the last date for deciding on the various offers and hence the CCPA meeting that day. But the Defence Ministry could have surely obtained a further extension of time to decide in view of Mrs Gandhi’s bereavement.) Interestingly, the Janata Government, I learn, kept various agents out of its talks with West Germany and had suggested that the ultimate price for the submarines be reduced by the commission normally paid on such deals. The SSK deal, it may now be disclosed, was discussed broadly in 1978 by Morarji Desai, then Prime Minister, with the West German Chancellor, Mr Schmidt, at their meeting at Frankfurt airport. Nehru himself is known to have favoured such an approach in Government deals. But to cut a long story short, Mrs Gandhi needs to follow up her declared intentions with firm action. An ounce of practice, as the old saying goes, is worth more than a tonne of precept. — INFA