What is the state of readiness of our troops -4

Continuing the series of articles on the subject, are agents of arms dealers the real culprits for the glitches in our defence procurement? Contrary to many analysts, I hold the view the legitimate agents provide a valuable interface to understand the needs of the user and identify the right sources for procurement. They should be paid a legitimate commission like any other agents in the commercial world. As they are legitimate, transaction will be above board and accountable. They will be paying income and service taxes and their accounts will be open for inspection at any time. This will bring transparency in the transaction.

In 1986, Government of India removed agents as the middle men and decided to directly deal with arms manufacturers. The species of honest middlemen was kept out and under the table wheeler-dealers tookover. And immediately thereafter the Bofors scam hit the national headlines. There seem to be no stopping of scams.

I am reproducing an article, courtesy DNA India, "Confessions of a former arms dealer" written by a former naval officer in support of my argument. The article shows how a legitimate agent can provide valuable service to the armed forces. When we reform the system (WHEN?  is the 64 dollar question), this aspect should also be paid attention.

Confessions of a former arms dealer

Benoy Bhushan, April 4, 2012

During the 1980s, having quit as managing director of a very large private company, I started my own business.

Having served the Indian Navy for 25 years, and having commanded 10 merchant ships, I decided to deal only in shipping spares, importing them and supplying them to the Indian Navy, the Mazgaon Docks and the Oil and Natural Gas Commission.

In a couple of years, I had agencies of about 40 companies from the UK and 12 from America, France, Germany and Italy. I always did a comparative study of items required by my customers and selected the best items available in the American, British and European markets; bring down their prices and offering them to customers at the lowest prices.

I was in the UK when the Falkland operations took place and the British troops were using the best under-water suits, a single-piece suit with only one zip that made it waterproof, airtight, lightweight and non-abrasive. Soldiers could use the suit for combat on land too, but the Indian Navy chose an obsolete two-piece suit that was neither waterproof nor airtight.

I also offered a sophisticated under-water breathing apparatus that did not release any air bubbles, therefore enabling the diver to remain undetected, and a very sophisticated digital terrain modeling system based on satellite pictures, which could enable an aircraft pilot to practice in a classroom how to enter enemy territory by flying at tree-top level without ever having visited that territory. It was the only such system available in the world then. I do not know what finally happened as by then I had already stopped my business.

There are also three notable cases regarding supply of critical items to the Indian Navy and Mazgaon Docks: 

1) A naval ship acquired from Britain was held up in the dry docks for a long time for lack of supply of original equipment from William and James. I was requested to help. The equipment was imported from William and James and supplied in a week and I was delighted to see the ship undock. 

2) Mazgaon Dock had acquired a very sophisticated diving support ship, sans the necessary diving stores. The ship could not be operational, which in those days meant a loss of about $40,000/day. I was asked to help. All the required diving stores were obtained and supplied in three consignments and the ship was made operational on receipt of the first consignment supplied in about four days. 

3) An old friend of mine in Navy was appointed in command of an establishment that operated six Mini Submarines. Not one was operational and my friend asked me to help. I took a list of spare parts required by my friend to make all six Mini Submarines operational and concurrence from the naval dockyard and a letter of credit for $25,000 and took a flight to Livorno, Italy, and called on the owner of the shipyard that built the mini submarines and informed him that I had some suggestions to improve their performance. A board meeting was called so I could make my suggestions, which were debated upon, agreed to, appreciated and implemented in due course. The owner asked me what I would like him to do for me. I placed before him my letter of credit and the list of spares and requested him the consignment in three days, which was done. With a great sense of pride, I saw the six mini subs sail out of the Bombay Harbour in a single file. I may add that I never took advantage of any difficult situation my customer may have been.

In 1986, after attending some meetings in America, my wife and I arrived in London to attend a meeting with my principals. The company director showed to me a telex message from the defence ministry, New Delhi, which said: ‘The Inland Rules do not permit commission being paid to their agent in India’. The ministry had also asked my principals to send them fresh quotations. 

After reading the message, I thought for a minute or two. I decided I should not do any business under those conditions, which denied me my hard-earned commission. The Inland Rules, which was brought in to knock out all honest arms dealers, forced me to close my lucrative business. I felt let down because the ‘Inland Rules’ eliminated me, an honest and straight forward agent.

Coincidentally, 1986 is the year when the Bofors scam took place and thereafter it seems that the scams in defence purchases have become bigger and bigger.

The writer is a retired commander, Indian Navy