Each edition of the defexpo invokes a fair share of criticism against the government departments dealing with defence production and procurement. These exchanges manifest during the networking periods interspersed between seminars; several of which took place during defexpo 2014. These are indicative of the nature of the change unfolding in contemporary India and are worth noting.
By far the loudest murmur bordering on a diatribe was aimed at the Ministry of Defence itself for their practice of “firing the gun from the hip” in black listing defence equipment firms “ on the drop of a hat”. The general impression was that there is a revolving list to which periodically additions and deletions are made and weapons/component procurement are either forbidden or facilitated. Figures of as many as 27 firms were quoted as on this infamous black list and the names of which traverse an insidious but essentially an insider grapevine. These are the firms , it is alleged, which have not been permitted to participate in the defexpo 2014. Truly, no body doubted the government’s prerogative to sit on value judgment despite the opaque nature of the revelation. But there was complete unanimity that this practice when it leads to non procurement of badly needed materials and equipment which will debilitate the “conflict waging capability of our security system”, then it needed to be reviewed forthwith. It is now a “National Security” issue. Some serious balancing needed to be done.
Mind you the intention was to not point fingers at big ticket investigations the likes of which the media regularly reports e.g. Agusta etc but at the detection of faulty components and parts in the supply chain which get surrounded by a bribery innuendo. The issue was that in an otherwise reasonably faultless chain if aberrations emerge down the line, ideal action will be to levy heavy financial penalties. They should be built into the contract.
The issues of big ticket procurements have their own shades of grey. It was very loudly alleged that, fearful of large foreign conglomerates resorting to the bribery route despite our very strong objections, we have started dealing directly with governments. In these cases shorn of competitive bidding, we may be paying a higher price with no guarantees that moneys are not exchanging hands. Examples of procurements through the Foerign Military Sales (USA) and the developmental programmes with Russia were cited. These alluded to the purchase of the C-130 J and the C-17 Globemaster transport planes among others from USA and the joint development of the 5th generation combat planes and the medium transport aircraft with Russia. As a counter point however, it was argued that if these decisions are taken as a part of national policy to maintain a strategic balance then the government aught to publish a white paper in the interest of transparency.
On a similar vein, government’s policy of sticking to its own PSUs in awarding contracts does not appear to be visionary apart from the fact that it does not provide for a level playing field to private Indian players. Most of the ship building contracts for example seem to be going to government owned shipyards. Because of their seeming lack of experience in building warships, the private sector is not given orders despite adequate potential for projects.
They are thus denied an opportunity to be at par with their public sector counterparts. The operational and financial autonomy of the PSU shipyards are assessed to be limited. Compared to this, the private sector has complete autonomy in decision making which facilitates them to meet necessary infrastructural needs at a faster pace. Clearly, despite this stark contrast between the private and public sector shipyards much to the advantage of the former, they receive no benefits. Examples were cited of the Pipavav which despite having tied up with global players does not get considered for a government contract.