Rear Adm Purohit traces corruption in defence deals to '60s

Rear Adm Purohit traces corruption in defence deals to '60s
EXPRESS NEWS SERVICE

NEW DELHI, FEBRUARY 15: Defence Minister George Fernandes has asked the Central Vigilance Commission (CVC) to investigate all major defence deals after 1985-'86, a move prompted by the allegations of corruption the Ministry of Defence (MoD) is facing in Parliament, out of it and now even in court.

But Rear Admiral Suhas Purohit, a man the Navy was grooming to head its logistics (i.e. procurement, storage, issue and accounting) traces the problem to the late 1960s. In a letter to Admiral Sushil Kumar, Rear Admiral Purohit said the stores, spares and the entire equipment, at times for UK origin ships, were to be obtained from commercial sources. ``These sources made money for themselves as well as the crown at our (the Navy's) expense,'' Purohit wrote. Quoting an example, he pointed out: ``Records show that the sonar 184 M fitted on Nilgiri cost £ 50,000 less than that on Himgiri purely because the second was bought from a commercial source/ trading house. The sets thereafter were ordered on originalmanufacturers and the additional £ 50,000 were saved,'' Purohit wrote.

The letter forms a part of Purohit's petition in the Delhi High Court. He alleges that trading in spares by Indian intermediaries is even more lucrative than hawala. ``Shrinkage in Naval forces, both in UK and NATO, coupled with reduced demand from elsewhere resulted in both surplus industrial capacity and availability of spares and stores,'' he wrote. These stores were earlier held by the Royal Navy to sustain their previous force levels. Items thus became cheaper and more easily available. ``Indian intermediaries found the process highly attractive. The availability of such funds was so large and returns so lucrative that it rivalled even hawala,'' he added.

In the early '70s, armaments were the only money spinners and suppliers' intervention was limited to influencing professional selection and price negotiations. Then, officers retiring from the services were hired to get information and make contacts. The ills first emerged duringthe Naval Expert Committee study from 1978 to '82. However, Purohit wrote that ``the guilty were protected by the Naval headquarters and the Ministry (MoD) alike. This shows the depth to which vested interests had penetrated.''In his letter to Admiral Kumar, Purohit wrote that his efforts to clean up the process of extra departmental pressures and loyalties was resisted by external interests resulting in difficulties since he had ``found the fraud'' of unwarranted purchases for Shakti from ``paper firms set up expressly for this purpose.''

In his letter, Purohit also speaks of purchase problems in submarines. ``The flow of spares of SSK submarines purchases from Germany had been unsatisfactory for several reasons. There was a lobby that all spares should be purchased from M/S Marlog,'' he said. But when competitive tendering took place, M/s Marlog appeared to sulk at not getting enough cream and initially failed to quote for a large number of items. ``In some cases their quotations were far in excess ofprices quoted by M/S Marlog themselves earlier,'' he wrote in another letter to the Chief of Naval Staff.

After the breakup of USSR in 1990-'91, the supply of spares through government sources practically stopped. ``Since much of the Indian fleet was of Soviet origin, spares were essential to keep the fleet operational. Ship chandlers stepped into the breach,'' he said.

``The availability of spares through Original Equipment Manufacturers (OEMs) was confirmed by the 1994 delegation and details of items contracted were available to all by June 1994. Notwithstanding this, large value ship chandler procurement were made, amounting to more than Rs 10 crore,'' Purohit said insisting that he had consistently acted strongly against the interests of ship chandlers.