M A I N   N E W S

NDA govt was warned of South African gun firm
Anita Katyal and Girja Shankar Kaura
Tribune news Service

New Delhi, April 20
Even as Defence Minister Pranab Mukherjee sought more details about charges that a South African firm, Denel, paid Rs 20 crore to a British company to obtain confidential documents about purchase of self-propelled guns by India, it has emerged that the BJP-led NDA Government was questioned two years ago about how rules were being circumvented to unduly favour this firm.

Papers available with The Tribune reveal that Mr Priya Ranjan Dasmunshi, Water Resources Minister and former Congress chief whip in the Lok Sabha, wrote three letters to former Prime Minister Atal Bihari Vajpayee highlighting the anomalies in the deal, which resulted in a loss of around Rs 3,000 crore to the country.

He had specifically mentioned that the NDA Government was opting for a higher priced gun when cheaper alternatives were available in the market and that no global tenders were floated for this deal so as to accommodate the single bidder from South Africa.

Further, he pointed out, the trials of these guns were not conducted in India and that the country lacked the required infrastructural support for these weapons.

Mr Dasmunshi first wrote to Mr Vajpayee on August 16, 2003, and followed it up with two more letters - on October 28, 2003, and January 23, 2004, when he failed to get any response from former Defence Minister George Fernandes to whom his letter was forwarded. Mr Vajpayee acknowledged his first letter, in which he said the matter had been passed on to the Defence Minister, but there was silence thereafter.

News reports appearing in South African newspapers, have suggested that Denel had sought details of the confidential Price Negotiation Committee (PNC) report on a tender for the self-propelled anti-material rifles or the bunker busters. It has emerged that Denel paid $ 3.4 million to Varas Associates, the UK firm, in 2003 to get the details of the PNC report. The PNC submitted its report in May 2003 and Denel got the order for the supply of the guns thereafter.

While this deal was being negotiated, Mr Dasmunshi had repeatedly stated that before deciding on giving the order to Denel, the world market should have been studied and the best possible option selected, keeping in mind the country's defence preparedness.

In his letters, Mr Dasmunshi persistently questioned the NDA Government's decision to purchase these guns through a single vendor, without inviting competitive bids or floating a global tender. Questioning the price at which the guns were being purchased, the letter stated: ‘‘Is it a fact that the South African company is demanding $ 5 million for each gun while a gun of similar quality is available in the market for $ 2.25 million.’’

In his third letter, Mr Dasmunshi wanted to know if the Defence Ministry had given directions on the file that a similar offer of 155 mm, 52 calibre MSTA gun should be considered only after the trials of the South African equipment were concluded.

He went on to suggest that Army Headquarters had sought sanctions for the purchase even before the field trials were conducted.

Mr Dasmunshi's letter also suggested that the South African firm, Denel, owned by the South African Government, was faced with serious financial crisis.

The NDA Government bailed it out with this huge order at a highly inflated price.

Govt looking into ‘pay-offs’

New Delhi, April 20
Defence Minister Pranab Mukherjee today said the government was looking into alleged pay-offs in the purchase of anti-material rifles (bunker busters) from a South African company in 2003. He was replying to a supplementary in the Rajya Sabha on the procedure of defence equipment procurement. — UNI