Lockheed Martin, Tata announce F16 India Partnership । Partnership aims to produce F16 Block 70 in India if selected by IAF । GE Capital Aviation Services (GECAS) orders 100 A320neo aircraft । Paris Air Show 2017 opens at Le Bourget, France June 19 । Chairman COSC and CNS Admiral Sunil Lanba on a visit to Isreal। India, Pakistan become full member of SCO। India’s entry into SCO was backed by Russia, and Pakistan’s membership by China। PM Modi calls on Chinese President Xi Jinping on the sidelines of SCO। He also thanked the Chinese President for supporting India’s entry into SCO। Prime Minister Narendra Modi exchange greetings with Pakistani PM Nawaz Sharif in the Leader’s Lounge before the SCO concert in Astana, capital of Kazakhstan। It was the first time the two had met in nearly a year, during which period bilateral relations have deteriorated। PM Modi greeted his Pakistani counterpart and asked about PM Sharif’s health and about the health of his mother । Prime Minister Narendra Modi departs for 2-day visit to Astana, Kazakhstan to attend SCO Summit । India to be admitted as full member of SCO during the Summit । India signed Paris climate pact for its commitment towards protecting the environment, says EAM Sushma Swaraj । The EAM said this during MEA’s annual conference in New Delhi June 5 । It did not sign the pact of any greed or fear from any country: EAM । Ms Swaraj was rebutting US President Trump’s allegation saying India signed the deal to receive billions of foreign aid । India successfully launches communication satellite GSAT 19 June 5 । The heaviest ever rocket GSLV Mk III carrying GSAT 19 lifted off from SDSC (SHAR) Sriharikota । Bahrain, Egypt, Saudi Arabia and UAE cut diplomatic ties to Qatar । The 4 Gulf nations took the step following Qatar’s relations with Iran and support of Islamist groups। They also cut off its land, sea and air routes to the outside world । Libya, Yemen also joined the four Arab nations in snapping ties with Qatar । India, Russia sign pact for two nuclear power units at Kudankulam in Tamil Nadu । INS Kalvari, the Indian Navy’s first Scorpene class submarine, will be battle ready from Day One, French collaborator DCNS announced June 1 । Kalvari, meaning shark, will be commissioned in July । Kalvari is the first of the six modern submarines ordered by the Indian Navy । Indian Navy is looking at 200 ships and 400 aircraft, all with hitech systems । Vice Adm Karambir Singh also told a seminar on Future Indian Navy that poor quality systems are not acceptable । Indian shipyards are building 40 ships at present । PM Modi reaches St. Petersburg in the 3rd leg of his 4-nation visit । He is to participate in 18th India Russia Annual Summit and SPIEF 2017 । India, Spain sign 7 agreements including one each on Cyber Security and Civil Aviation । Naval Chief Adm Sunil Lanba calls for cutting edge technologies with a Made in India stamp । Addressing a seminar on Building India’s Future Navy, he said ToT from foreign vendors would be say now with Strategic Partnership model । Adm Lanba said selection process for shipboard fighter is moving at desired pace and they should be inducted in about 5 years । About 80 killed, several injured in a bomb blast near Indian embassy in Kabul । Indian embassy staff were safe: MEA । PM reached Madrid on the second leg of his tour for a day- long visit to Spain May 31 । India, Germany sign 11 MoUs including one on Cyber Security । MoUs signed during Prime Minister Modi’s 2-day Germany visit on May 29-30 । We are made for each-other, says PM Modi on India-Germany ties । The Prime Minister is on 4-nation tour of Germany, Spain, Russia and France from May 29-June 3 । India’s distinguished police officer, Mr KPS Gill passed away at 82 । Hassan Rouhani re-elected Iranian President । Prime Minister Modi congratulated him on his re-election । India, Palestine sign 5 MoUs including one on visa exemption for diplomatic passport holder । Agreements were signed after Prime Minister Modi’s meeting with President Abbas May 16 । Palestine President Mahmoud Abbas is on 4-day State visit to India beginning May 14 । Abbas is visiting India on the invitation of President Pranab Mukherjee । This is the fifth visit and the third State visit of President Abbas to India । Prime Minister Narendra Modi arrives in Colombo May 11 on his two-day visit to Sri Lanka । He was received by his Sri Lankan counterpart Ranil Wickramsinghe on his arrival at the Colombo airport । PM Modi is the chief guest at the International Vesak Day celebrations of Sri Lanka । India marks 19th National Technology Day । National Technology Day is marked to commemorate the anniversary of Pokhran nuclear tests of 1998 । On this day, Prime Minister Modi hails the then PM Vajpayee’s courage to conduct the nuclear tests । India launches GSAT-9 satetllite from Sriharikota । India to make Israeli rifles and small arms । Punj Lloyd and Israel Weapon Industries (IWI) collaborating in the venture । Trump to visit Israel and Saudi Arabia this month । This will be his first foreign visit as US President । India, Turkey signed three agreements including one between the Foreign Services Institute of India and the Diplomacy Academy of Turkey । Turkey President Recep Tayyip Erdogan calls on President Mukherjee, Vice President Ansari, PM Modi and EAM Sushma Swaraj during his State visit to India । The Turkish President, visiting from April 30-May 1, backs India in fight against terrorism । Turkey conveyed its support for India’s bid for membership of the Nuclear Suppliers Group (NSG) । PM Modi expressed his gratitude on Turkey’s support । Indian Army celebrates 79th Armour Day । On 1 May 1938, Scinde Horse cavalry regiment was equipped with Vickers tanks and Chevrolet armoire cars । The Indian Army’s Armourerd Corps has played decisive role against Pakistani intruders in 1947, 1965 and 1971। India, Cyprus sign 4 agreements including one on Air Service Agreement । Agreements signed during Cyprus President Nicos Anastasiades’s visit to India April 28 । Cyprus President called on President Mukherjee, Prime Minister Modi and External Affairs Minister Sushma Swaraj in New Delhi । The visiting President and PM Modi agreed on urgent need for all countries to decisively act against the states supporting factories of terrorism । PM Modi also thanked the Cyprus President for his support to India’s claim of Permanent Membership in UNSC । North Korea test fires a ballistic missile which landed in the Sea of Japan । India, Sri Lanka ink pacts on economic cooperation and road infrastructure development । The agreements signed during Sri Lankan PM Ranil Wickremesinghe’s visit to India । Prime Minister Modi, Home Minister Rajnath Singh and External Affairs Minister Sushma Swaraj called on him । Foreign Secretary S Jaishankar accompanied Sushma Swaraj when the latter called on the visiting Sri Lankan PM । India-Russia defence engagement will continue to grow, says Defence Minister Arun Jaitley । He was speaking at the 6th Moscow Conference on International Security in Moscow । India, Russia are celebrating 70 years of Diplomatic Relationship । China launches its first indigenous aircraft carrier । The new carrier will accommodate 36 aircraft and will be commissioned in 2020 after sea trials । It’s a 50000 ton platform with a ski jump deck modeled on Soviet carriers but has many design innovations । India, South Korea Sign Inter-Governmental MoU for Defence Industry Co-Operation in Shipbuilding । The MoU signed by Secretary (Defence Production), India, Ashok Kumar Gupta and Minister of Defence Acquisition and Programme Administration (DAPA), South Korea, Chang Myoung-Jin । The Inter-Governmental MoU was conceived under the overall umbrella of the ‘Special Strategic Partnership’ between both countries । The Cabinet Committee on Security (CCS) accorded its approval for signing the MoU । The CCS also gave a go ahead for nominating Hindustan Shipyard Ltd, Visakhapatnam for collaboration । Indian Navy successfully test-fires land attack version of Brahmos supersonic cruise missile । Nepal President Bidya Devi Bhandari calls on President, Vice President, Prime Minister, Home Minister and Defence Minister in New Delhi Apr 18 । Nepalese President is on a State visit to India April 17-21 । This is her first ever visit to India since taking over in 2015 । She was given a ceremonial Guard of Honour on her arrival at Rashtrapati Bhawan । Canada’s Minister of National Defence, Harjit Singh Sajjan, called on Defence Minister Arun Jaitley Tuesday । He was presented a Tri-Services Guard of Honour on his arrival at South Block । 12 killed in Saudi military helicopter in Yemen । Unconfined reports say the Blackhawk was accidentally shot down by a Saudi Patriot missile। US NSA Gen HR McMaster meets Prime Minister Modi in New Delhi । Gen McMaster also exchanged views on Indo-US relations with Indian counterpart Ajit Doval and Foreign Secretary S Jaishankar । Happy Easter । US drops its biggest 21,000 pound bomb on ISIS in Afghanistan April 13 । Designated GBU 43, the Mother of All Bombs is designed to hit deep caves and tunnels in hardy mountains । GBU 43 is the biggest non-nuclear bomb, carried by the US Air Force (USAF) and the British Royal Air Force (RAF) । White House Press Secretyary Sean Spricer confirmed the night bombing but there was no immediate word from Taliban । Spicer said the ISIS terroists were targeted as they used the caves and tunnels to hit the US forces । GBU 43 is a concussion bomb carrying an explosive charge of 8,500 kg, equal to 11 tons of TNT । India, Australia sign 6 MoUs including on Combating Terrorism and Civil Aviation Security । Agreements signed during Australian PM Malcolm Turnbull’s Visit to India April 10 । He calls on President Pranab Mukherjee, Vice President Hamid Ansari and Prime Minister Narendra Modi । This is the first ever visit of Turnbull after taking over as Australian PM in 2015 । The Australian PM along with his Indian counterpart took a Delhi metro ride to visit city-based Akshardham Temple । India, Bangladesh signed 22 agreements April 8 including key pacts on defence cooperation and civil nuclear cooperation । India announced an additional $4.5-billion concessional line of credit for infrastructure projects in Bangladesh, and another $500 million for Dhaka to procure defence equipment from New Delhi । A joint India-Bangladesh event saw both PMs honour the 1,661 Indian soldiers who sacrificed their lives during the 1971 war for Bangladesh’s independence । Bangladesh Prime Minister Sheikh Hasina arrives in New Delhi for 4-day State visit to India । Prime Minister Modi himself goes to the airport to greet the Bangladesh PM on her arrival । External Affairs Minister Sushma Swaraj calls on Sheikh Hasina at Rashtrapati Bhawan । She is the special guest of President Pranab Mukherjee during her State visit to India । The Bangladesh PM has a full day of bilateral discussions with her Indian counterpart on Saturday (April 8) । 20 agreements are expected to be signed between India and Bangladesh । India, Malaysia sign 7 agreements । The agreements signed during Malaysian PM Najib Razak’s visit to India from March 30 to April 4 । Malaysian PM calls on President Pranab Mukherjee, Vice President Hamid Ansari and Prime Minister Narendra Modi । India and Malaysia joint statement, issued after Modi, Razak meeting, calls for a deeper ties between the two nations ।
June 22, 2017
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Defence Procurement and Blacklisting Policy

By Amit Cowshish Published: November 2016

New Delhi. The Defence Acquisition Council (DAC), chaired by Defence Minister Manohar Parrikar, cleared procurement proposals worth around `82,000 crore ($12.35 billion) and also approved the new blacklisting policy in the meeting held on November 7.

The DAC is a high powered body which accords approval in principle – also known as the Acceptance of Necessity (AoN) – for all capital acquisitions, exceed ing `500 crore ($75 million approximately). Proposals for lesser amounts up to `150 crore ($23 million) and `300 crore ($44 million) are approved by the Services Capital Acquisition Plan Categorisation Committee (SCAPCC) and the Defence Procurement Board (DPB), respectively.

Although the DAC meetings get extensive coverage in the media, it is becoming a routine staid affair with proposals worth thousands of crores being accorded AoN in every meeting with hardly any word on the status of the approvals accorded in the previous meetings. If one adds all proposals approved in the last two years since the present government came to power, the total amount may add up to around $50 billion. That is a staggering amount by any stretch of imagination. The question, however, is how many of these approvals have culminated in contracts.

Before the Defence Procurement Procedure (DPP) 2016 brought down the validity of AoNs to six months, every AoN used to be valid for one year within which the Request for Proposal (RFP) had to be necessarily issued to prevent its lapse. This is odd, for the broad time table for procurement activities, given in DPP 2016, allows only eight weeks to issue the RFP from the date the AoN is accorded.

Be that as it may, excessive focus on the value of proposals approved in principle by DAC has overshadowed the fact that by themselves, AoNs do not guarantee procurement of equipment. These have to be converted into contracts. There is little information available on the number of AoNs accorded so far and the ones that fell through because the RFPs could not be issued within six months, as also the progress of those that did not. At any rate, the journey from AoN to signing of contract is long and arduous; many an AoN has fallen prey to the rigours of this journey and never reached the destination.

Going by the information provided from time-to-time by MoD to Parliament or contained in the reports of the standing committee on defence, the rate of conversion of AoNs into contracts has not witnessed any spurt. In 2012-13, MoD had signed 73 contracts for procurement of defence equipment. This figure came down to 42 and 47 respectively, in the two succeeding years. During the last six months of 2015-16, 28 contracts were signed. Even if this is taken as the yardstick, the total number of contracts signed during 2015-16 would be around 56 – much below the number of contracts signed in 2012-13.

It is important, therefore, that in its monthly meetings DAC takes stock of progress of AoNs accorded in the past that are yet to culminate in contracts and resolve any issues that might be hindering the progress in specific cases.

The benchmark for assessing the progress of cases already exists. The DPP envisages a time frame of 74-114 weeks –an additional 12 weeks if winter trials are also contemplated – from AoN to signing of the contract. Unless every single AoN is monitored by DAC, especially those which entail manufacturing in India, this time frame will remain only on paper, which has largely been the case so far.

Once in a while, DAC also takes up other policy issues, such as approval of the Long Term Integrated Perspective Plan (LTIPP), Defence Five Year Plans, and revised versions of the Defence Procurement Procedure.

In its November 7 meeting, DAC also approved the much awaited policy on blacklisting of defence companies involved in bribery and other transgressions. The policy is expected to be uploaded on the ministry’s website within a few days. Though not the main cause, blacklisting of companies in the past has indeed resulted in MoD scoring many a self-goal. Several procurement programmes, ranging from ammunition to guns, ran aground because of the blacklisting of the potential suppliers. More damaging is the long period of suspension of dealings with the potential supplier preceding the actual blacklisting.

There have been instances of dealings with companies being put on hold even if there were no allegations against them but they happened to be the sister concern of another company facing corruption charges. Suspending dealings with or blacklisting an entire group of companies for wrong doing on the part of one of the subsidiaries is counterproductive. For example, India’s new conventional submarine, INS Kalvari has sailed out into sea for trials without being equipped with the Black Shark torpedoes because the Italian firm WASS that makes the torpedoes happens to be a subsidiary of Finmeccanica, the holding company of AgustaWestland which figures in the bribery scandal surrounding purchase of VVIP helicopters.

It is almost certain that the new policy will do away with indiscriminate blacklisting of the entire group of companies if there are charges of bribery against some other subsidiary of the same group. The new policy is also expected to prescribe graded penal action, from payment of hefty fines to blacklisting for one to ten years, depending on the nature of transgression. Some reports suggest that companies may be blacklisted for one year at a time. The much-awaited policy could have a provision for fast track investigation into allegations and for taking the duration of investigation into account while prescribing the ban. These are important decisions but unless the policy is worded unambiguously and the procedure for handling allegations of bribery is laid down with absolute clarity, its implementation could pose unforeseen challenges.

There are many challenges in this. For one thing, MoD does not have an investigative mechanism of its own. It will have to depend largely on the Central Bureau of Investigation and the foreign investigation agencies. Given this constraint, it is difficult to visualise how will MoD ensure a speedy investigation.

No penal action is normally taken unless a show cause notice is issued to the offender. There has to be absolute clarity about the manner in which the response to such notices will be processed in MoD, failing which the tendency will be to seek the advice of the investigating agencies and the law ministry. This could become a never ending exercise. Clear guidelines will also need to be laid down for deciding the quantum of punishment to make sure that the officials responsible for taking action against the offending companies do not hesitate in taking decisions in the fear that their decisions could be questioned on the grounds of subjectivity.

It is a good idea to have a clear policy on blacklisting but considering that the current trend of wearing rectitude on one’s sleeves, execution of the policy could run into difficulty unless there is political consensus on it, cutting across the party lines.

The fear is that it may be too late for that.

– The author is a former top official of the Ministry of Defence, who dealt directly with military acquisitions till a couple of years ago.




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