[sacw] IPARMW No.21 (21 August 00)

Mon, 21 Aug 2000 01:46:22 +0200

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INDIA PAKISTAN ARMS RACE
&
MILITARISATION WATCH #20
(21 August 2000)

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[information & news for peace activists on Arms sales to the region,
defence budget figures, acquisitions & updgrades of weapons systems,
development and deployment of new weapons, implications of militarisation;
the developments on the Nuclearisation front and the doings of the
'intelligence' agencies. Bringing this information to wide public knowledge
is our goal here. No to secretive & exclusive control of this information
by technocrats, planners who plot national security hidden from public
scrutiny.
Please help us in the information gathering work for wide public
dissemination in South Asia.
Send Information via e-mail for IPARMW series to: aiindex@m... for
inclusion in the Emailings.]

The complete IPARMW archive is available at:
http://www.egroups.com/group/IPARMW

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=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
The text of the Hamoodur Rahman Commission's Report released by the Indian
Magazine India Today is available at the following address:
http://www.india-today.com/ntoday/extra/71war/index.html
-----------------------------------------------------------------

I.

Rediff on the Net
14 August 2000

Peace-loving residents oppose ordnance factory in Nalanda

Soroor Ahmed in Patna

The Rs 6 million ordnance factory project in Union Defence Minister
George Fernandes' parliamentary constituency Nalanda, may run into rough
weather even before land has been acquired for it.

While the tardy pace of preliminary work has disillusioned many, some
local residents have launched a campaign against the project in Rajgir,
the town famous for the Shanti stupa.

Under the banner of the Rajgir Citizens' Council, locals of various
religious denominations have requested the minister to shift the
factory, as Rajgir is known as haven of peace.

The hills of Rajgir attracted Gautam Buddha, Mahavir (who spent 14
months) and the Muslim priest Hazrat Makhdoom Bihari, whose convent is
still situated there.

Besides, there is a seva ashram of the Catholic Mission and a centre for
vedantic learning. It is important for Hindus as well, since it is
associated with the historical and legendary values of Krishna's visit.
It is a melting pot of the world's major religions, feel council
members.

Thousands from various religions visit Rajgir and the Bihar Government
organises a cultural mahotsava in October-November.

Rajgir was the capital of Ajatsatru and Bimbasara, famous kings of
ancient times. Academically too, remnants of the famous Nalanda
University are near Rajgir.

The foundation stone of the 40th ordnance factory of the country was
laid by Prime Minister Atal Bihari Vajpayee on March 5, 1999, during a
brief stint of President's rule in the state. It is likely to come up
within three years.

While Fernandes, during speeches in his constituency in the recent past
had blamed the state government for not providing land, that does not
seem to be the truth.

Social thinker Prabhat Kumar Shandilya, told rediff.com that the
ordnance factory might soon become an arsenal for various left and right
extremist groups as Nalanda is under the volatile central Bihar.

Nalanda and neighbouring Munger districts are famous for illegal gun
factories.

Since there are a number of government-owned gun factories in Munger
town, many of those employed there are also engaged in the clandestine
factories.

Many explosives from the plant at Gomia in South Bihar often pass into
the hands of extremists, who use them to trigger landmine blasts.

Social thinkers feel that if care is not taken, Rajgir or the entire
Nalanda district may end up becoming a smuggling centre for explosives.

Though Fernandes claims that the factory will provide jobs to many
unemployed youths, local citizens feel that the Union government's track
record of payment of compensation for land is very bad.

Lakhs of people uprooted during the industrialisation of South Bihar
three or four decades back are yet to be rehabilitated or given proper
compensation or jobs.

The issue of displaced people of Bokaro being rehabilitated was once
again raised by local legislator Samresh Singh, though the Bokaro steel
plant was set up 37 years back.

While non-payment of proper compensation is a common complaint, council
members fear that their peaceful town may become a target for enemy
strikes.

--------

II.

Outlook
21 August 2000

AIRCRAFT

Mig-life Crisis

The recent MIG-21 crash has led many to question IAF=92s
training procedures

By Ranjit Bhushan

The Indian Air Force is all too eager to revive the kamikaze creed. That
perhaps is the only plausible explanation for a string of aircraft
crashes-seven to be precise-in the last four months. And when yet another
MIG-21 went down in Delhi last week (the seventh), it set into motion the
same, old rigmarole of questions-Technical defect? Pilot error? An ageing
fleet?

If the last four years are to be taken into account, the figure is a
whopping 55. A total of 20 young pilots have been lost and another dozen or
so injured. Many admit that it is an unusually high accident rate. The
occurrence of these crashes at such regular intervals have also put into
question the safety of India=92s premier combat aircraft.

While a similar crash outside Delhi may get no more than a cursory media
mention, its occurrence in the Capital has opened the floodgates of
criticism. The age of the aircraft-which are of sixties Soviet vintage but
have been altered to suit Indian conditions subsequently at Hindustan
Aeronautics Limited (HAL) factories-is increasingly coming under scrutiny,
as is the training, maintenance and other technical aspects.

Says MP Suresh Kalmadi, himself a former MIG pilot for 10 years and a
member of the standing committee to the Union defence ministry: "The need
of the hour is to replace the entire MIG fleet. Anyway, they are airworthy
only till 2004. So, instead of going in for fleet renovation, which is what
we are following, it makes more sense to get rid of them outright."

That, however, is easier said. For one, more than half of India=92s 40-odd
fighter squadrons are MIG units. Replacing them in a hurry is practically
impossible, not to mention the incredibly prohibitive costs of purchasing
new aircraft as French Mirages, British Jaguars and American F-16s. In
addition, this is not largely a sellers=92 market. Through most of the
seventies and eighties, arms-producing and selling countries like the US,
France, UK and other members of what is now the G-8, simply refused to
entertain India=92s plea for aircraft or even other military hardware becau=
se
of India=92s proximity to the erstwhile Soviet Union.

Against this backdrop was the Indo-Soviet accord, which made it possible
for India to purchase Soviet MIGs, with no moratorium on the number of
fighters required. Says a ministry official: "It=92s common knowledge that
arms deals, particularly big ones, are one of the most important tools for
diplomacy. Given India=92s relations with the Soviet Union in a multi-polar
world then, it was no surprise that MIGs were bought on a large scale from
the Soviets."

Add to it two other factors: the cost factor that favoured India in the
days of the rupee-rouble trade and availability of the aircraft. But what
now? The earlier procurement of aircraft as well as its spares was from one
central agency in Moscow. Following the break-up of the ussr, spares have
to be sourced from different countries. Thus a wheel could be from, say,
Uzbekistan and the pressure gauge from Georgia. This leads to lack of
consistency of quality and inordinate delay in procurring a particular
part, often affecting the performance of what are otherwise considered
excellent fighters.

Who says these are =91flying coffins=92? The establishment is unhappy wi=
th
the derogatory label

In the 1971 war, the mig-21s were regarded as surefire winners. By 2000,
after last week=92s crash in Delhi, it has been dubbed a "flying coffin". A
term derogatory enough to raise hackles in the defence establishment.
According to senior air force officers, the nation=92s premier strike
aircraft cannot be dismissed in this fashion. "It is regrettable that MIGs
should be targeted in such a fashion," says the official IAF spokesperson.

While the popular perception is that the MIGs have to be scrapped and that
the IAF should stop flying these fighters, the air force does not think so.
Chief of air staff A.Y. Tipnis seemed to echo these sentiments in a recent
interview. In his opinion, MIGs were "airworthy" and "fit to fly".
According to him, prior to each flight every aircraft is thoroughly
inspected before it=92s given flight clearance.

The view from within the force is that far too many conclusions are being
drawn by non-technical persons on what is very much a technical subject.
Says Squadron Leader R.K. Dhingra: "The accident rate is never an absolute
number. Have the operational hours increased? Different countries have
different sortie hours, so how do we arrive at a mean? The age of an
aircraft is no factor either. The point is whether the craft is fit to fly
and passes the critical parameters. In the case of mig-21, it does."

Defence minister George Fernandes has been quick to defend the MIGs.
Criticising the metaphor of "flying coffins" for the MIGs and all efforts
to label the fighters as old and, therefore, in bad condition, Fernandes
has pointed out that whenever an accident takes place, conclusions and
criticisms are made freely without ascertaining facts.

Says the defence minister: "The MIGs were the largest in number in the IAF
inventory and were the most-flown aircraft. Therefore, accidents of MIGs
were more than any other type of aircraft." He adds that all old and
unserviceable aircraft are phased out when their life is over.

But all these explanations may fall short of answering the key question why
do our MIGs crash so often?

Other than this, there is also the problem of the lack of advanced trainer
jets. Says Air Commodore (retd) Chandan Ghosh of the Institute of Defence
Studies and Analyses (IDSA), a fighter pilot of over 1,500 hours vintage
and a 1971 war veteran: "This is the time for hard decisions. There is no
harm in looking at some of our drawbacks and think of improvements." Air
force trainers say a wide majority of accidents occur when the aircraft is
either taking off or landing, particularly in the hands of young,
inexperienced pilots. The question is do we have good training facilities?
Perhaps, the reason why India still continues with outdated MIGs is the
near faliure of its indigenous production line, of which trainers are an
intrinsic part.

The advance jet trainer (AJT) is a case in point. Asked to take over the
project in 1985, the AJT=92s tale is one of political indecisions, missed
chances, gross prevarication and red tape. Fifteen years down the line, the
project is yet to take off. A defence ministry standing committee observed
in its findings submitted to Parliament in April this year: "The committee
feels that many precious lives have already been lost as a result of a lack
of a proper trainer aircraft. The government has already admitted that
MIG-21s, which belong to the vintage of 1960s, are in the extended period
of operation and their extension life cannot be further stretched."

According to the committee, due to the government=92s indecision , the
training of pilots had suffered adversely; with many pilots being killed
and a number of aircraft destroyed, leading to enormous financial damage.
In response to the uproar in Parliament after the latest crash, defence
minister George Fernandes issued a statement that the pricing committee for
purchase of AJTs is holding the last round of negotiations with British
Aerospace and that the procurement would soon be effected.

Equally tragic is the tale of light combat aircraft, supposed to be the
replacement for MIGs. Some 15 years after getting its first orders, the HAL
has thrown up its hands saying its production line is overworked. This has
prompted some pilots to say the time has come for the air force to take
over its own production work.

The conditions prevailing at defence airstrips have also not helped. Most
defence airports-actually attached to commercial aviation hubs-are not
suitable for fighters. According to IAF sources, there are more than 100
bird-hits recorded every year. In 1989, an inter-ministerial committee was
constituted with a view to reduce bird population. The measures recommended
included setting up of modern slaughter houses and carcass-utilisation
centres, implementation of water supply schemes, sewage/sanitation and
solid waste management. It also identified at least 10 airfields in the
country where environmental hazards made landing and taking off a hazardous
proposition.

While airports can be modified and the bird population near them reduced,
how does the air force solve its MIG problem? There seems to be no easy way
out. The induction of other types of aircraft has been practically ruled
out given the resource crunch. With 45 MIG squadrons in operation-a
substantial part of the overall IAF fleet strength-a phasing-out cannot
happen overnight. The only answer seems to be the building of indigenous
fighter planes and trainer aircraft. But as of now, HAL is yet to deliver
the first of these aircraft to the air force. It remains to be seen how the
company responds to the current challenge thrown up by the crash. lethal
flaws

* Suspect spare parts sourced from different countries of the erstwhile
Soviet Union* * Indigenous upgradation programme a failure* * MIGs
overworked for lack of advance jet trainers* * Programme to replace ageing
MIG fleet a non-starter* * Defence airstrips attached to commercial
airports and thus unsuitable for fighters*

Though many want the MIGs junked, it=92s not a practical idea as most of ou=
r
air force squadrons are MIG units.

Most defence airstrips are attached to commercial aviation hubs and are
hence susceptible to bird-hits.

=A9 Copyright Outlook 2000
---------

III.

source:http://www.wps.ru/digest/defence.html#5.1

RUSSIAN-INDIAN COOPERATION STRENGTHENS

Russian Defense Minister Igor Sergeyev has had a meeting with his Indian
counterpart George Fernandes. Particularly, the Indian side is interested i=
n
the production, modernization and exploitation of Russian aircraft. It is
expected that the Indian delegation will visit aircraft designers and chief=
s
of the design bureaus of the Aviation Institute named after Gromov. India i=
s
interested in the strengthening of its military-technical partnership with
Russia. There are numerous facts that prove this statement. For example, th=
e
Indian Aircraft Producing Company, HAL, delivered 36 kits of equipment with
which MiG-21"bis" fighter aircraft will be renovated within the framework o=
f
the Spear Program. The Sukhoi Attack Aircraft Concern developed and passed
over to India via the Rosvooruzhenie State Company its proposals for the
delivery of Su-25UTG training aircraft to that country. The training
aircraft are designed for the professional selection and training of the
crews to fly aircraft carrier aviation.

The Russian Foreign Trade Complex "AviaExport" and Indian Defense Ministry
also signed a contract for the delivery of 40 Mi-17-1"V" helicopters, the
price of the contract is $170 million.

Additionally, the Indian delegation signed an agreement with the PromExport
Complex, which equips the helicopters with all the necessary components so
as to use them for military transportation purposes.

Russian specialists maintain that the Teal Group analysts prepared a very
realistic forecast for the development of the international military plane
market. According to that document, during the next 10 years some 3,000
fighter aircraft worth some $136.1 billion will be sold in the world, but
Russia does not have a chance to become a major supplier of aircraft to the
European plane market. We will continue to sell our planes to China and
India. Vozdushny Transport, N28, July 2000, p. 4

Translated by Tatyana Araslanova

---------

IV.

Military Parade 2000. july: FRONT LINE

Promexport Cements its Ties with India

(Sergei Chemezov, Director General of the Promexport Federal State Unitary
Enterprise )

The first agreement for trade and economic cooperation between Russia and
India was signed in Moscow on February 5, 1955, and the first supplies of
Soviet armaments to India started in 1960. These two events are historicall=
y
significant for the Russian-Indian military-technical cooperation.
For over 40 years, the main profiles of Russia's military-technical
cooperation with India included supplies of armament and military equipment=
;
technical assistance to assimilate license production of armaments for the
Indian Air Force, Navy and Army; the construction and modification of
military facilities; Indian military personnel training in Russia; Russian
specialists' missions to India; and the overhaul of Indian military
equipment in Russia. The total volume of contracts fulfilled over these
years amounts to approximately U.S. $30 billion. Russian-made armaments
account for over 60 percent of all Indian armed forces' inventories. In all=
,
about 50 Indian military facilities have been built and put into operation
with Russia's assistance.
A long-term Russian-Indian program for military-technical cooperation signe=
d
in December 1998 opened a new page in the relations between the two
countries. The focus of cooperation has been shifted from Russia's supplies
of military equipment to its joint development and production by the two
countries. Below is an interview with Sergei Chemezov, Director General of
the Promexport Federal State Unitary Enterprise which is extensively
involved in export of Russian armaments and military equipment to India.

The first agreement for trade and economic cooperation between Russia and
India was signed in Moscow on February 5, 1955, and the first supplies of
Soviet armaments to India started in 1960. These two events are historicall=
y
significant for the Russian-Indian military-technical cooperation.

For over 40 years, the main profiles of Russia's military-technical
cooperation with India included supplies of armament and military equipment=
;
technical assistance to assimilate license production of armaments for the
Indian Air Force, Navy and Army; the construction and modification of
military facilities; Indian military personnel training in Russia; Russian
specialists' missions to India; and the overhaul of Indian military
equipment in Russia. The total volume of contracts fulfilled over these
years amounts to approximately U.S. $30 billion. Russian-made armaments
account for over 60 percent of all Indian armed forces' inventories. In all=
,
about 50 Indian military facilities have been built and put into operation
with Russia's assistance.

A long-term Russian-Indian program for military-technical cooperation signe=
d
in December 1998 opened a new page in the relations between the two
countries. The focus of cooperation has been shifted from Russia's supplies
of military equipment to its joint development and production by the two
countries.

Below is an interview with Sergei Chemezov, Director General of the
Promexport Federal State Unitary Enterprise which is extensively involved i=
n
export of Russian armaments and military equipment to India.

- Mr. Chemezov, what kind of products does Promexport export to India? Are
there any problems with spare parts?

- The Promexport Federal State Unitary Enterprise is a state intermediary i=
n
export and import of military products. We consider India to be our
reliable, long-standing and strategic partner. Our effective cooperation
rests on long-term intergovernmental agreements, including the new long-ter=
m
intergovernmental program for military-technical cooperation through the
year 2010.

Promexport has an office in New Delhi to ensure prompt coordination of our
joint operations. We have developed dependable, stable and trusting
relations with the Ambassador of the Republic of India to Russia Mr.
Satinder Kumar Lambah; the office of Indian military attache in Moscow; as
well as the procurement departments of the Main Staffs of the Indian Air
Force, Navy and Army.

Being responsible for rendering assistance to foreign countries in setting
up enterprises for the production and repair of armaments and military
equipment, Promexport, as the prime contractor, helped India build about 20
industrial plants. Over the last 8 years, the total value of Promexport
contracts with India has grown tenfold.

Since 1992, Promexport has been supplying to India special equipment for th=
e
license production of the T-72M1 and

Fig.1 T-72M1 main battle tank

T-72M1K main battle tanks, the BMP-2 and BMP-2K infantry fighting vehicles,
their armament and ammunition. In addition, we support license production o=
f
optical equipment for MBTs and IFVs. We also supply optical and illuminatio=
n
devices; stabilizers; communications and ABC protection systems; navigation
equipment; parts, units and components; blanks of primary and secondary
materials.

As for our cooperation in the naval sphere, Promexport is mostly involved i=
n
supplying spare parts for previously exported surface ships (Projects 61ME,
266ME, 1234E, 205RE, etc.) and submarines (Projects I641 and 877EKM), as
well as for Indian-built ships (projects 15 and 25A). Although these
contracts do not bring high revenue, we understand how important they are
for maintaining the Indian Navy in combat readiness and we do our best to
prepare all requisite documents and deliver products according to specified
schedules. We are aware that, for example, should we delay the supply of a
selsyn (a simple electrical device for engine telegraph), a ship will not b=
e
able to accomplish a combat mission. This device costs only $200 but its
export requires as much redtape as turbines or missile launchers. I can giv=
e
you several examples of Promexport's prompt reaction to its customers'
needs. In February this year, the Indian Navy urgently required two units
for submarines. Promexport fulfilled this order within the shortest time.

We also help our customers to directly conclude contracts with Russian
manufacturers which already have long-standing and friendly relations with
such Indian state-owned enterprises as Bharat Electronics Ltd., Bharat
Dynamics Ltd., Opto Electronics Factory, Mazagon Dock Ltd., etc.

In all, contracts for spare parts account for about 90 percent of our
exports to India. Marketing spare parts is rather troublesome and labor
consuming. Legislative norms for arms trade in Russia and India differ in
many aspects, which certainly causes problems. Our Indian customers give us
a very short time for processing their requests for a wide range of spare
parts. They often send them directly to the manufacturers, although
according to Russian laws all such requests must go through authorized stat=
e
organizations. Many requests deal with spare parts for military equipment
that has been discarded from service and that is no longer produced in
Russia. Sometimes, the volume of contracts for spare parts is so small that
manufacturers are not financially interested in fulfilling them. So it woul=
d
be more expedient to receive orders for spare parts from our customers well
in advance for us to be able to fulfill their orders timely and avoiding
unnecessary expenses.

Recently, the Indian side has started inviting tenders for modernization an=
d
sale of some products, including those produced by very few Russian
specialized enterprises. True, tenders help minimize prices. However, this
practice is a two-edged weapon: tenders often involve low-profile companies=
,
specifically from former Soviet republics and Warsaw Pact countries. To win
a tender, such companies are ready to beat down the price and offer their
own variants of modernization of armament and equipment which they have
never produced. For example, Rumania has come out with a proposal for the
modernization of the Mikoyan MiG-29 fighter. Also, some companies offer
products which have been in storage for many years and must be either
re-assembled, replaced by new ones, or restored.

Fig.2 Indian Navy Project 61ME destroyer

However, low-quality services and products are often accepted due to dampin=
g
prices, only to later cause failures of armament and military equipment wit=
h
the blame often laid on Russian manufacturers. It regrets us to say that,
while the high quality of Russian arms is acknowledged worldwide, including
Western Europe, certain publications in the Indian press have unfairly
criticized Russian military equipment.

- What facilities for the production, repair and modernization of military
equipment are being built or are planned to be built by Promexport in India=
?
What advantages will India gain from these projects?

- Currently, we do not have such plans, as India does not seek them. The
Indian side considers it more feasible to have its armament and equipment
overhauled and modernized at the manufacturing and repair plants of the
Russian Ministry of Defense for several reasons. First, we can organize
repair and modernization operations within the shortest time and within a
single technological cycle. Second, Russian manufacturers guarantee the
highest quality of end products by using original equipment and proficient
personnel. They also provide guarantee and post-guarantee services. Third,
the overhaul and modernization of armament and equipment in India will take
more time and additional funds for acquiring corresponding tooling and
documentation as well as training of personnel.

Promexport is prepared to offer a number of projects, for example, for the
construction of production facilities at Indian shipyards to provide for
major overhaul of armament, complex technological systems and equipment in
service with previously imported Russian-made ships.

We have already made such proposals.

- Is Promexport challenged by competitors from the former Soviet republics
and Warsaw Pact countries on the Indian market?

- Yes. Ukraine and Belarus are actively promoting their military equipment
on the Indian market, as well as Bulgaria, the Czech Republic and Slovakia
which try to sell Soviet-made armament and equipment. This is quite normal,
provided players on the market obey the rules and sell high-quality
products. Unfortunately, our competitors often offer damping prices for old
stocks discrediting Russian-made high-quality and reliable armament and
military equipment. For example, we know a small Polish company, Cenzin,
which is persistently offering spare parts

for Soviet-made naval equipment. Will these spare parts be of any use for
India? It is most problematic.

Fig.3 Mikoyan MiG-29 fighter

Backed by the latest developments of Russian specialists and its own vast
experience on various world markets, Promexport maintains its status in the
highly competitive market environment.

- What measures are taken to improve Promexport operations, specifically on
the Indian market?

- Promexport has acquired a reputation of a flexible state intermediary in
arms trade and we believe that our operations on the Indian market only
confirm this fact. The many years of positive and mutually beneficial
cooperation with India will undoubtedly help solve existing problems. In th=
e
future, we will develop traditional ways of cooperation and conceive new
ones.

Our portfolio contains a set of proposals for the modernization of earlier
exported armaments to enhance their capabilities and extend their service
life, as well as for license production of some armament and equipment. As
India has a vast research and technological potential enabling it to produc=
e
the most complex military equipment, we are planning several joint R&D
projects in air defense and electronic warfare fields which will engage
specialists from Russia's Ministry of Defense, research institutes, design
bureaus and enterprises.

Fig.4 Mikoyan MiG-29 fighter

Work on the modernization of AD systems has already begun. For example, in
February, according to the protocol The Fulfillment of Military Technical
Cooperation Program adopted by the sixth session of the Russian-Indian grou=
p
for military-technical cooperation, a Russian delegation comprising
representatives of Promexport, Russia's Ministry of Trade and the Almaz
Central Design Bureau (the developer of all major national AD systems) made
a presentation of the modernized Pechora-2A AD missile system for Indian Ai=
r
Force officials in New Delhi. This presentation was also attended by
representatives of the Russian Technologies Federal State Unitary Enterpris=
e
(now a Promexport daughter company) to examine the possibility for using
components produced by the Indian electronic industry for Russian products,
for example, as spare parts for Pechora. The modernization of Pechora to
Pechora-2A standard will significantly improve its combat and operating
characteristics and extend its service life at optimal cost.

It is also important that Promexport employs experienced professionals with
a long record of work in India who enjoy trust and respect among their
Indian colleagues. They are currently involved in consultations intended to
reduce the time of delivery of urgently needed components, units and spare
parts, as well as develop several programs and projects.

I am convinced that our cooperation has good prospects. This conviction gre=
w
during my visits to New Delhi as a member of Russian delegations headed by
Vice Premier Ilya Klebanov in late 1999 and in April this year.

---------

V.

The Statesman
17 August 2000
Editorial and Perspective

THE HDW SCANDAL German Somersault, Hinduja Amusement

By AG NOORANI

THE disclosure by the CBI in the Delhi High Court on 12 July that the
German authorities have asked for direct documentary evidence, showing that
a commission of 7 per cent was paid to some Indians to clinch the Rs
420-crore deal of HDW submarines, should cause no surprise. The
somersault was performed with Teutonic vigour thirteen years ago; on 27
July, 1987, to be exact. What the CBI reported was a continuous replay it
has been witnessing all these years.
Six individuals and three companies were named in the FIR filed by the
CBI on 5 March 1990. They are SK Bhatnagar, former defence secretary; SS
Sidhu, former additional secretary in that ministry; M Kondaph, former
director of the submarines division at the Naval Head-quarters; BS
Ramaswamy, former additional finance adviser in the ministry; MR Schun-ker,
former vice-chief of the Naval Staff; and Gopichand Hinduja. Two German
companies, HDW and AEG Tele-funken, besides the Delhi-based Roger India Pvt
Ltd also figure in the FIR.
telex
This scandal was unearthed on 9 April, 1987 when the Defence Minister VP
Singh issued this press release: =93The Defence Ministry has received forma=
l
intimation through a telex from an Indian Embassy that an Indian agent is
involved in a defence deal in which the agent has an arrangement for
receiving payment of 7 per cent commission from the supplier. Total
commission on the whole deal would come to Rs 30 crores. The Defence
Minister has ordered an enquiry into the matter and has appointed a
committee headed by the Defence Secretary (i.e., Bhat-nagar himself) to
report on the modus operandi of foreign and Indian agents, to evaluate
their security threat and suggest measures including punitive ones so that
all agents are kept at bay.=94
He noted on the file that very day that SK Bhatnagar had mentioned to him
that =93the Indian agent is most probably the Hindujas.=94 He directed that=
,
=93after due confirmation, fullest action should be taken against them=94. =
This
was revea-led by his successor KC Pant in Parliament, on 21 April, 1988 and
confirmed by VP Singh on 24 April.
The facts are simple. The Government of India bought two 1500 SSK class
submarines from the West German company, Howalds-werke Deutsche Werft
(HDW), under a contract dated 11 December, 1981, in pursuance of the
decision by the Cabinet Committee on Political Affairs (CCPA) on 30 June,
1980. They were bought in a sailaway condition along with material for the
manufacture of two more in India. Negotiations began in 1985 for the
purchase of two more (submarines Nos. 5 and 6) when the presence of an
Indian agent was detected in 1987. One submarine was deli-vered on 9
September, 1986, and the other on 20 November, 1986. Between 11 January,
1992, and 8 August, 1988, Rs 215.38 crores were paid to the HDW.
The telex, in cypher, which was sent by our Ambassador in Bonn, JC
Ajmani, on 24 Febru-ary, 1987, read thus: =93Dr Molitor, official responsib=
le
in Ministry of Defence for sale of military called on me and NA (Naval
Attache) today in connection with the 5th and 6th SSK submarines. Dr
Molitor said that the shipyard was being persuaded to bring down the price
further from DM 240 million ... Dr Molitor expressed the hope that the
final price could be negotiated satisfactorily but regretted that 7 per
cent commission payable to the Indian agents of HDW under the terms of an
open-ended agreement posed a great financial liability.=94 This clearly
implied that an =93open-ended=94 agreement with the Indian agents existed p=
rior
to the negotiations on subs 5 and 6.
It was addressed to, both, PM Rajiv Gandhi and the DM. The PM was
unfazed. =93How do you know the telex was rightly decoded?=94 he asked VP S=
ingh
who resigned on 12 April.
As in the Bofors case, a continued correspondence followed. Desired
answers were provided to questions asked for the record. The Government of
India=92s aide-memoire of 12 June, 1987 to the German Government suggested
that it had initially read the telex of 24 February correctly: =93This
disclosure by Dr Molitor to the Ambassador of India would indicate that the
said commission had already been paid in respect of the 1981 contract and
there was a continuing liability to pay a seven per cent commission to the
India agents on the additional submarine under negotiation.=94 This exposes
the later quibble that the Ambassador had merely reported that the
commission was =93payable=94 and not paid.
It added: =93It will be seen that Dr Molitor had made a very definite
statement to the Ambassador=94 on the terms of =93an open-ended agreement=
=94 with
the Indian agent. Yet, the aides-memoire characterised the commission paid
as =93the alleged payment of commissions.=94
BONN=92s response
A similar letter to HDW was sent on 27 June demanding details of the
commissions paid. First, HDW replied on 9 July: =93This information is not
correct and can only have been caused by a misunderstanding ... As known to
the Indian Government we only use the Globtech Company as our retainer
which we notified in writing to the Chief of Naval Staff on 22 September,
1982.=94 It is owned by Admiral SM Nanda, former Chief of Naval Staff. HDW
flatly denied that any =93Indian agents=94 had been engaged at any time.
HDW could distance itself from Molitor. How could the German Government
disown its own senior officials? Its reply of 27 July took the familiar
course =97 repudiate the conversation, but without an explicit denial. =93D=
r
Molitor stated that on 24 February, 1987, he had received without comment a
letter from the Indian Ambassador concerning the Indian position on
commission payments and had passed the letter on (sic) the HDW.=94 There wa=
s
no explicit denial of the =93very definite statement=94 attributed to Dr
Molitor.
=93The Federal Government is convinced that the matter can be clarified
only through direct contacts with the HDW. It has, therefore, requested the
HDW company to cooperate closely with the Indian Government in this
matter.=94 Neither this hypocritical assurance nor the misrepresentation of
Molitor=92s statement should obscure the hard kernel of truth the German
reply contained. Molitor had only spilled the beans. It was the HDW which
mostly did all the dirty work as New Delhi very well knew. It was owned
largely (75 per cent) by the Federal Government and for the rest by the
State of Schleswig-Holstein. Bonn knew that any reply other than an evasive
one would have earned it a place in Rajiv Gandhi=92s black book. Its answer
in the Bundestag on 11 June revealed it to be more honest than him. Asked
specifically about the HDW Commis-sion, it replied: =93The Fede-ral
Government is aware that it is normal that commissions are paid in such
deals. The directors of the firms have to decide if they should pay, how
much and when.=94
On 28 September, 1987 New Delhi wrote to Bonn: =93In brief the FRG
Govern-ment have disowned the statement that Dr Molitor made to our
Ambassador=94. On 21 April, 1988 Defence Minister KC Pant announ-ced that
=93Government have decided to treat the matter as closed.=94 The reasons he
gave implied acceptance of the Ger-man version =97 =93a misunderstanding=94=
and
=93no Indian agent=94.
COVER UP
On 13 May, 1988 the Report of the Comptroller and Audi-tor-General, TN
Chaturvedi, indicting the Government was placed before Parliament. The
Public Accounts Committee of Parliament was to meet at 3 pm on 21 April,
1989, to fina-lise its report thereon. Just two hours earlier, the ten
Cong-ress-I members of the 22-member Political Affairs Committee (PAC) sent
a long note of 18 pages rewriting the whole draft. They had been hastily
summoned to the room of Sheila Dixit, Minister of State in the Prime
Minister=92s Office, and asked to sign the note.
The Statesman disclosed the meeting at Dixit=92s office on 28 May, 1989,
along with excerpts from the PAC=92s draft report. It found that the decisi=
on
of 1980 to buy the submarines from HDW instead of the Swedish firm Kockums
was based =93on considerations other than technical and financial=94.
Compara-ble costs of figures were not placed before Cabinet. =93An outrageo=
us
mistake=94 had been made by not considering comparable base figures and
periods of escalation. India Today revealed another detail on 15 June,
1989. The note was =93penned by a senior bureaucrat who was earlier in the
Defence Ministry and is now in the Cabinet Secretariat.=94 This was a clear
reference to TN Seshan. He did not comment on it. He ought to now.
The FIR recorded Bhatnagar=92s lies and other acts of deception. SJS
Chhatwal, India=92s High Commissioner in Canada, informed the Joint Secreta=
ry
(Personnel) in the Ministry of External Affairs on 16 August, 1987 that it
was reported that the Hindujas were involved in the deal as middlemen.
Para 8 of the FIR records their doings. Bhatnagar had noted on the file
results of his telephone call to a five-star hotel in New Delhi in 1981 for
the MD, HDW, Hansan Westore. =93No person by that name was staying there=94=
, he
was told. =93He then gave the number of Mr Westore=92s room but was told by=
the
operator that the said room as well as some more rooms were booked in the
name of Hindujas.=94 Hotel records bore that out. =93Gopichand Hinduja also
showed keen interest by making several enquiries from Shri Ajmani on the
progress of the enquiry ordered by the Indian Government into commissions
paid in the submarine deal.=94
Why not publish a Blue Book on the HDW deal containing the entire record?
If the Government will not, concerned individuals should.

-----------

IV.

The Daily Star
20 August 2000
BETWEEN THE LINES

In the Name of Secrecy...

By Kuldip Nayar

Islamabad believes that the report has been purposely leaked out to show
the Pakistani military in a bad light. Leakage is always deliberate. But
this had a purpose. It was meant to warn the present military rulers
that it might go the same way, as the martial law administration during
Ayub Khan and Yahya Khan. The purpose was to remind the khaki that their
place was in the barracks.
DEMOCRATIC India, with all its claims of transparency and right to
information, can have the satisfaction that it has been able to keep
under wraps the Lt. Gen. Henderson-Brooks' report on our debacle in the
1962 India-China war. No amount of demands made to several defence
ministers, from Jagjivan Ram to George Fernandes, made them realise that
the nation had the right to know what went wrong and who was responsible
for it. The 30-year limit for the government to make the 'secret papers'
public ended eight years ago. The questions in parliament on the
publication of the report have not been entertained on the plea that the
information cannot be disclosed "in the public interest." Who decides
that? The bill on Right to Information, now referred to the joint par
liamentary committee, is of no consequence if the mindset of bureaucrats
and rulers does not undergo a change.

In comparison, the system under military rules in Pakistan appears to be
more porous. The Justice Hamoodur Rahman's report on Islamabad's defeat
in the 1971 Bangladesh war has seen the light of the day even before the
30-year limit is over. It is true that the disclosure is through
leakage. But a more charitable explanation can be that some liberal
elements in the establishment wanted the people to know that all
statements by Chief Executive General Pervez Musharraf on corruption and
accountability were not credible because only the civilians were
targeted and no one from the military.

Hamoodur Rahman's report too disclosed the degradation of the top brass
during the martial law, first under General Ayub Khan and then under
General Yahya Khan. The process of moral degeneration among the senior
ranks of the armed forces, the report said, was set "in motion by their
involvement in martial law duties in 1958" and "intensified" in March
1969. Papers sifted from the archives of America also testified
authoritarian, if not moral, side of the Pakistani forces that fought in
Bangladesh. One paper, entitled, Reassessment of Pakistan-America
Relations, said: "The Pakistan government will not only have to maintain
itself in power by force in the East but will have to deal with
complicated constitutional problems in the West." (Both East and West
meant the two wings of Pakistan.) Maintaining the same tone of morality,
the report said: "There is indeed substance in the allegations that a
considerable number of senior army officers not only indulged in
large-scale acquisition of lands and houses and other commercial
activities, but had also adopted highly immoral and licentious ways of
life which seriously affected their professional capabilities and their
qualities of leadership."

The report was particularly harsh on Lt. Gen. A.A.K.Niazi, chief of
operations in the then East Pakistan. It said that he had "a notorious
reputation for sexual immorality and indulgence in the smuggling of paan
(betel leaf) from East to West Pakistan." Islamabad believes that the
report has been purposely leaked out to show the Pakistani military in a
bad light. Leakage is always deliberate. But this had a purpose. It was
meant to warn the present military rulers that it might go the same way,
as the martial law administration during Ayub Khan and Yahya Khan. The
purpose was to remind the khaki that their place was in the barracks.

The leakage should convey to the military rulers that their entire
attention to cleanse the civil life, however commendable, was one sided.
In other words, the demand was that military officers involved in
various defence deals should also be exposed. It is, however, strange
that not a single scandal in the purchase of armaments has become public
in Pakistan, although the army has ruled the country for 40 out of 53
years of its existence. Everything may not have come out in India but
scandals like the Bofors gun and submarines, pursued by the Central
Bureau of Investigation, show that the accountability is not confined to
the civilians alone.

In fact, the Hamoodur Rahman report should have gone into the
operational failures. It held Niazi responsible for the defeat and
recommended his court martial. He, however, defended himself during the
interrogation after his internment in India. He said that he did not
expect a major Indian attack and felt that Indian efforts would be
confined only to capturing a chunk of territory for establishing
Bangladesh government. This was the reason, he explained, for his
initial deployment of troops and decision to wage battle closer to the
border. But when the Indian forces bypassed fortified Jessore City and
when they looked like racing towards Dacca, Pakistan realised that if
ever there was a plan to "free" some territory, it had been discarded.
But by then it was too late for Pakistan to change its strategy. When
asked whether during his planning operations he took into account the
possibility of being cut off from Pakistan completely, Niazi said:
"Yes." But he added that General Abdul Hamid Khan (Yahya's second in c
ommand) had told him that he would not be alone and "something else"
would happen. Niazi expected some form of external assistance. He did
not spell it out but it was obvious that he was referring to China.
Strange, the Washington papers show that America was concerned over the
disintegration of Pakistan. Information available in Delhi indicates
that Indira Gandhi, then Prime Minister, had no plans to go into West
Pakistan. The limited hostilities in the West were because of the
advantage the two sides took to occupy as much territory in arid parts
of Sind and Rajasthan as they could for the give and take at the time of
settlement.

The State Department was of the opinion at that time that creation of
Bangladesh would increase pressure for autonomy in the North West
Frontier Province and Sind. "While we do not anticipate the demands for
independence from the unit of West Pakistan, there will be a growing
demand for the transfer of power to elected representatives," a paper
from the Archives of America says.

Why the Hamoodur Rahman commission did not go into political reasons of
the creation of Bangladesh should not come as a surprise. Zulfikar Ali
Bhutto, then the Pakistan President, made the probe's terms of reference
limited. The brief of the commission was "to inquire into the
circumstances in which the Commander, Eastern Command, surrendered and
the members of the armed forces of Pakistan under his command laid down
arms." The commission could not go beyond that. Washington's assessment
is clear from the 1969-71 papers. It expected that Bhutto "would be the
immediate beneficiary of a return to parliamentary government."
Apparently, he was not popular with Washington. In telegrams sent to its
Ambassadors in Islamabad and New Delhi, the State Department informed:
"As you know, Bhutto does not enjoy high degrees of popularity here,
although we recognise importance taking account of his present influence
as well as future political potential in the event of a representative
government restored at national and or provincial levels."

The American embassy in Islamabad also had a dig at Bhutto. A telegram
to the State Department said: "It seems that every time Mr Zulfikar Ali
Bhutto moves into Hotel Intercontinental (at Lahore), a certain matron
who controls a stable of girls moves in at the same time. Each evening
the girls go to Mr Bhutto's suite where they perform songs and dances."

Understandably, the Hamoodur Rahman commission is silent on such point

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