April 22, 2021
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War in blue-water
Finance Ministry raises objections to WASS torpedo deal

The Ministry of Defence (MoD) and Ministry of Finance (MoF) are into a full fledged battle over the selection of torpedo for India’s Scorpene submarine, contracted from France, which will arrive by 2015.

MoD, under the leadership of Defence Minister A K Antony, which looks into India’s defence preparedness, had forwarded a flawed contract which had reached for clearance at the Cabinet Committee on Security (CCS).

It is MoF that saw the basic flaws in the whole deal which has been marred with series of controversies right from objections raised by Members of Parliament to mishandling of trial report by Naval Headquarters. Even there are complaints with CVC in which serious allegations have been leveled.

While Vice Chief of Navy was handling the torpedo deal from Naval Headquarters side, Preeti Sudan Joint Secretary was the point of contact from MoD side.

The MoF objections are so serious in nature that the PMO has asked the MoD to cancel the whole deal and reverse the process by putting a new file with fresh noting in Defence Acquisition Council meeting.

This assumes significance at a time when the MoD is hunting for the middlemen and MoD officials who are suspected to be involved in wrong doings. The file pertaining to torpedo deal has even defied all basic logic.

Going by Indian government system, according to sources, without Antony’s signature it will not be forwarded to CCS and MoF for clearance. Now it is Antony’s job to come out clean and fix the babus who put forward the file by giving wrong advises.

Italian company WASS and German company Atlas were the contenders for the deal. After the MoD sidelined Atlas, the whole deal became single vendor situation and against all norms the MoD went ahead for CNC with WASS.

The submarine in which the torpedo will fit in could possibly come by 2015. The MoF has raised that if the torpedo arrives before the submarine then the warranty will expire by then.

Although WASS has tied up with BDL in post CNC, the MoF has raised objections how the Italian company will be eligible for government privileges enjoyed by Indian DPSUs.

The torpedo deal is being done with WASS as main contractor and BDL as supporting partner, not vice versa. In that situation, WASS can not claim for exchange rate benefit and excise duty exemption.

But the MoD had passed the deal for clearance without loading proper calculation into the whole deal.

This has happened despite several reports in public domain and complaints made by responsible members regarding the torpedo deal.

Now the DAC which had cleared the whole deal earlier for CNC is silent and there needs to be an investigation as how the file pertaining to torpedo deal reached till CCS without basic norms are being adhered.

Hopefully, Defence Minister Antony should not plead innocence and ignorance at this stage and fix the responsibility on those who are involved.