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Friday, Apr 22, 2005

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National

Government orders probe into all deals with Denel

Special Correspondent

Several agreements featuring company to be put on hold

NEW DELHI: The Government has ordered a probe into all cases of acquisitions of arms from the South African company, Denel, which allegedly paid money to a British company to obtain Indian Defence Ministry documents.

The Defence Ministry will conduct the investigation, with the Minister, Pranab Mukherjee, ordering that the report should be placed before him at the "earliest".

Mr. Mukherjee has also directed that any purchases being made from the company may be put on hold and action taken to ensure that the Government suffers no financial loss.

`Technical snags'

The directive has implications for Denel's participation in the next round of testing for the 155 mm towed artillery systems due in the summer. Having failed the earlier round due to "technical snags", Denel, along with the Israeli company Soltam, is requesting another opportunity when the next round of testing takes place at Pokhran in Rajasthan. Both the companies had been banking on the United Progressive Alliance Government's sensitivity to the Swedish company, Bofors, which is the only gun to have passed the earlier test.

According to the authoritative Jane's Defence Weekly, the army plans to purchase over 1,200 towed, wheeled and the tracked self-propelled 155mm/52 cal howitzers under its Field Artillery Rationalisation Plan in a programme valued at over Rs. 9,000 crores over the next 10 years.

The Minister's order has also implications for another major project. Denel's turret was successfully integrated with the chassis of the Arjun tank to produce the Bhim self-propelled howitzer. However, price negotiations were put on hold after the Army felt that Denel's price offer of turrets for Bhim was too high.

Niche area

Another contract in the pipeline in which Denel emerged as the frontrunner is for making bi-modular propellant charges for heavy calibre artillery rounds at the ordnance factory coming up in Nalanda in Bihar.

All the three contracts are in Denel's niche area of artillery systems, perfected during South Africa's isolationist phase during the apartheid regime.

The company has completed the transfer of technology for a particular type of ammunition to a government ordnance factory, and supplied most of the Army's bunker busting rifles.

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