The Hindu : National : `Loose ends in AJT deal inked during NDA tenure'

Online edition of India's National Newspaper
Monday, Apr 25, 2005

National

National

`Loose ends in AJT deal inked during NDA tenure'

Sandeep Dikshit

NEW DELHI: The previous National Democratic Alliance (NDA) Government had left several loose threads in the multi-crore deal with British Aerospace for acquiring Advanced Jet Trainers (AJTs). The deal was signed just before last year's general elections when the model code of conduct was in force.

While it corrected an oversight leading to an additional pay out of Rs. 38 crores, the onus of signing several other sub-contracts was on the United Progressive Alliance (UPA) Government. These could lead to additional expenditure of about Rs. 100 crores, said senior Defence Ministry officials.

The NDA Government failed to sign an inter-governmental agreement (IGA) with the British Government and instead settled for a memorandum of understanding (MoU), seeking its cooperation for the supply and licensed manufacture of `Hawk' AJTs from British equipment manufacturers.

Compromise

The Government compromised on the more legally binding IGA because the U.K. Ministry of Defence said the IGA was more like a treaty document and would take time including its ratification by the British Parliament. The signing of the MoU contravened the Cabinet Committee on Security's (CCS) September 2003 decision that specifically asked for an IGA to ensure long-term product support.

The then Defence Minister George Fernandes approved the signing of two additional contracts worth 4.6 millions pounds after officials discovered that the Government had failed to sign a 2.5 million pounds contract for tooling of the AJTs to be manufactured in India and another of 2.1 million pounds as royalty to Rolls Royce, the makers of the engine.

Though the Ministry of Finance wanted some clarifications, the Cabinet Committee on Security (CCS) gave post-facto approval, as the Indian Air Force (IAF) would have suffered due further delay in the introduction of the AJT.

Additional expenditure

While the NDA Government managed to sign the two additional contracts before the polls, it left about half a dozen contracts unsigned. Officials were unable to confirm the additional expenditure. But these contracts are crucial to the setting of an indigenous manufacturing facility at Bangalore. Analysts also raised their eyebrows over the Rs. 1,500-crore advance payment amounting to nearly 25 per cent of the total deal. This is considered large for a defence contract.

The contract was signed when the model code of conduct for the election was in force but the Government justified it on two grounds. One, the negotiation with British Aerospace began in 1999 and the signing was just a formality. Second, the Indian Air Force was forced to teach advanced manoeuvres to its rookie pilots on the MiG-21 FL (Type 77) which was unsuitable for the role, leading to the deaths of several trainees.

The aircraft was becoming more dangerous because of its age. As a result, the Indian Air Force had been asking the Government for an advanced jet trainer between the intermediate jet trainer speed of 700 kmph and supersonic fighters like the MiG-21s with a speed range of 2,000 kmph.

The contract has resulted in pilots being trained in the U.K. till the first British made Hawk arrives in September 2007.

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