The Hindu : `Russian arms firm's charges have commercial motives'

Online edition of India's National Newspaper
Thursday, Aug 29, 2002

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`Russian arms firm's charges have commercial motives'

By Our Special Correspondent

NEW DELHI AUG 28. In the wake of allegations by a major Russian armament company of India importing spares from companies other than the original equipment manufacturers (OEMs), the Defence Ministry today said the charges were inspired by "commercial motives''. In other words, the defence establishment here suggested that the Russian company that had made the charges was keen that India sourced the spares only from it and not from its competitors who have emerged in other countries in the disintegrated Soviet Union.

The company had earlier accused the Indian Air Force of re-exporting original parts supplied by it and turning to peddlers of dubious standards for meeting its own requirement of spares. At that time, the Hindustan Aeronautics Limited (HAL) had taken up cudgels and maintained that each and every part was thoroughly examined before its was cleared for fitment on fighter aircraft.

The controversy reared up on Tuesday in Moscow after two Indian diplomats reportedly attended a media briefing of Rosoboronexport, Russia's largest supplier of armaments and spares. The Rosoboronexport Director General, Andrey Belyaninov's remarks that substandard spares could have led to several recent IAF crashes was challenged by these diplomats who asked Mr. Belyaninov to name the companies. To this, the company DG said the Indian Defence Ministry had all the records and maintained that his company had only supplied 10 per cent of the spares while the rest were sourced from companies whose track-record could not be attested.

"I cannot understand the logic behind your system of tenders. If you know that there is only one plant in Russia manufacturing a particular spare, how can you invite tenders from others? Naturally, others can supply only re-conditioned old spares at a cheaper price than the manufacturer,'' he reportedly told reporters.

Although the controversy might fade away with time, the fact remains that Russian spares have been the Achilles heels of the Indian armed forces that have sourced most of their armaments from the former Soviet Union. A former senior Naval officer, S. Purohit, had blown the whistle on the practice of buying spares from dubious companies at several times the price offered by the OEM. For instance, in his petition before the court after being denied promotions for allegedly blocking the operations of these companies, Rear Admiral Purohit had said that balancing piston which cost Rs. 1,475 was bought for Rs. 46,750 per piece, or more than 30 times the price of the original item. A classified report prepared by the Central Vigilance Commissioner is also said to have referred to the problem of sourcing spares from the fragmented Soviet Union and the resulting opacity it generates.

Sources here said the sourcing of spares was being streamlined and the intervention of the Russian President, Vladimir Putin, was also sought after the Defence Minister, George Fernandes, raised the issue with the then Russian Deputy Prime Minister, Ilya Klebanov. However, the issue is complicated because several other factors are also involved including the need for quick supply of supplies for which the Indian defence establishment has to perforce seek quotations from non-Russian companies who are prepared to make speedy deliveries.

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