Money Over Matter | Modernisation Travails

Mired by systemic and policy issues, the IAF continues to struggle

Maj. Gen. Mrinal Suman (retd)Maj. Gen. Mrinal Suman (retd)

As per the reports appearing in the media, India is likely to spend close to USD 130 billion in the near future to enhance the combat potential of the armed forces. A large portion of the proposed budget is likely to be earmarked for the modernisation of the Indian Air Force. Depleting strength of the flying fleet has been a cause for concern for the authorities. Shortages in the fighter strength are alarming. It is not that such a precarious situation has emerged overnight and taken the government by surprise. The writing has been on the wall for the last two decades.

Despite tall claims and frequent assertions, modernisation of the IAF has been lagging behind by more than a decade. Whereas there are numerous reasons for this worrisome state of affairs, some key issues have been highlighted here.


Internal Weaknesses

Most unfortunately, internal weaknesses of the IAF are primarily responsible for its modernisation travails. Adhocism appears to be afflicting its policy planning as it seems unsure of what it should acquire. For example, it keeps vacillating between single engine and twin engine fighters. Also, debate continues unabated with regard to 4th generation, 4th generation plus and 5th generation aircraft.

Worse, the Air Force has failed to put in place a well-organized and competent procurement set-up. Although the Defence Procurement Procedure (DPP) mandates that procurements should be carried out in multi-vendor competitive tendering, the IAF has singularly failed to conclude any major contract in open competition successfully since 2001. All efforts have been in vain. A perusal of two high value aborted proposals reveals the nature and extent of the ineptness of the procurement regime of the air force.

In the case of procurement of helicopters for VVIPs, the Comptroller and Auditor General of India (CAG) observed major irregularities and concluded that the process of acquisition posed ‘serious questions on accountability and lack of transparency in the finalization of contract, which need to be addressed’. CAG has been rather charitable in its criticism. For, the whole process reeks of grave misdemeanours and manipulations at every stage, flouting all provisions of DPP.

To start with, service ceiling was ingeniously reduced to 4,500 meters and cabin height fixed at 1.8 meters to favour the chosen vendor. It effectively made it a single vendor case as no other helicopter in the world possessed that facility. Further, whereas field trials are required to be carried out in actual conditions in India, the Air Headquarters (Air HQ) coerced the ministry of defence (MoD) for permission to conduct trials abroad at the vendors’ premises. Worse, the trials were held on substitutes and mock-ups as the helicopter on offer was still under development. It was a transgression of unpardonable proportions.

CAG has also highlighted the gross inconsistencies in pricing the deal. The Air HQ had projected the likely cost to be Rs 793 crore in January 2006. In September 2008, before opening the bid, the Contract Negotiation Committee (CNC) benchmarked it at Rs 4,877.5 crore as ‘fair and reasonable price’. Thus, within a span of 30 months, the acceptable price had jumped more than six times the estimated cost. Interestingly, the cost quoted by the vendor was Rs 3,966 crore. Thus, the benchmarked cost was higher by 22.80 per cent. The enormity of the transgression can be gauged from the fact that the final contract was signed for Rs 3,726.96 crore whereas CNC was ready to pay an extra amount of Rs 1,150.54 crore to the vendor, a whopping sum indeed. Something was certainly amiss.

The case for the procurement of 126 Medium Multi-Role Combat Aircraft (MMRCA) is equally illustrative. Initially, the tenders were issued in 2005. They had to be recalled as the Air HQ had specified parameters in a highly shoddy and slapdash manner. Fresh tenders were issued in August 2007. After extensive trials, two platforms were found technically acceptable. Finally, Rafale was declared the winner due to its lower life-cycle cost. The announcement was made on 31 January 2012 and contract negotiations commenced thereafter. However, serious doubts got raised as regards the methodology followed in determining the lowest bidder. The then defence minister wanted the whole process to be relooked into. With no solution in sight, the proposal had to be aborted. Thus, effort put in over a period of 10 years came to naught, primarily due to the ineptitude of the procurement staff of the IAF. Consequently, the deficiencies remain unfulfilled to date.

Despite much trumpeted claims of transparency, every single deal by the IAF has been questioned for irregularities. CAG has been scathing in his comments. Cancellation of Eurocopter deal at an advanced stage, ostensibly on grounds of flawed evaluation procedure, dented the credibility of the system the world over. Foreign vendors found the whole environment highly dissuasive and were reluctant to participate. At one stage, both Boeing and Bell declined to submit their proposals for combat helicopters for the IAF.


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