sudhir007
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Tehelka - India's Independent Weekly News Magazine
THEY ARE calling it a confused case of fuses but only as a joke. And its a poor one, because the fact is there is no confusion at all. Many say its simply another instance of rules being bent to favour a particular party, sparking general outrage. Indeed, ever since the alleged impropriety came to light, it has been raining petitions in the Ministry of Defence (MoD), demanding a probe into the Rs 800 crore-procurement of artillery fuses four years ago. The fuses are tiny electronic devices that cause artillery shells fired from guns like the 155-mm Howitzer to instantly explode on reaching their target.
Just last week, Chief Vigilance Commissioner Pratyush Sinha received a complaint from Prasanna Patasani, a relatively unknown MP. The acquisitions must stop and the facts collated by different agencies, including the Committee of Petitions, should be acted upon, Patasani told TEHELKA. He is the latest in a long line of protesters among them a Lok Sabha committee to question the Rs 200-crore order, made on a singlevendor basis by the state-owned Electronics Corporation of India Ltd (ECIL). All spoke of how the ministry dumped multi-vendor competition, reportedly structuring the tender in a manner that excluded private bidders. Sinha has not replied, but CVC officials have confirmed receiving similar petitions earlier.
The case is a curious one, because ECIL is not a defence PSU and functions under the Department of Atomic Energy (DAE). And yet, it maintains an almost incestuous relationship with the MoD, which has made it the sole approved supplier of nearly 80 percent of the Armys fuse requirement. Earlier, Cabinet Secretary KM Chandrasekhar also looked into ECILs near-monopoly status, after a stream of petitions by MPs, the CVC, the Lok Sabha Standing Committee on Defence and the Lok Sabha Committee on Petitions (43rd report, tabled on November 8, 2008) reached his office.
So just where are the fault lines? Those protesting against the decision call it arbitrary because ECIL routinely depends for supplies on South Africas Fuchs Electronics the main supplier of fuses to South African armaments giant Denel, that the MoD has blacklisted. Highly placed ministry sources told TEHELKA that the tenders successful execution depended a lot on ECILs dependence on imported fuse components from Fuchs. The Army allows import duty exemptions for fuse components of up to 70 percent of the value of the contract.
Though ECIL is not a defence PSU it is the sole approved supplier of fuses to the army
Now consider this: the contract value includes a profit margin of about 15 percent as a result of which the 70 percent exemption clause easily allows suppliers to import 80 percent of the fuses. Clearly, this cannot be classed under local production. I would not call it indigenous, especially when a company is importing 70 percent of the fuses and assembling the components in India, says Jagdish Prasad, chairman of HBL Power Systems, which has a far higher percentage of indigenous components in its fuses. Why, then, does ECIL remain the Indian Armys sole choice? All government policies have been bypassed just to accommodate the South African product under the cover that it is a PSU, Manvendra Singh, MP and a member of the Committee of Petitions, wrote in his report. This was not all. Another committee member, HN Sharma, pointed out that ECIL merely assembles fuses from components supplied by Fuchs, and that the main components a safety and arming device, the battery along with an electronic timer kit are all imported.
Petitions from another PSU, ITI of Bareilly, were passed over despite routine submission of fuses for trials, Sharma told TEHELKA. He raised other contentious issues about the state-owned company (ECIL) as well, and explained in detail about how the company had flourished along with its key buyer, the artillery branch of the Indian Army. For example, he cited the note that Army headquarters sent to the Lok Sabha committee, admitting that former Director General of Artillery Lt Gen Charanjit Singh joined ECIL as an advisor immediately after retirement. In its defence, the Army says ECIL had routinely appointed several retired officers as its advisors, but that no one had ever questioned the move.
AND THOUGH ECIL despite repeated nudging is not talking, others have accused the ministry of allegedly doctoring the tender by lumping together three kinds of fuses: point detonation, timed and proximity. The rulebook is quite clear on this: either a vendor supplies all three, or none. This is hurting many, like the Hyderabad-based HBL Defence Electronics and Delhi-based Micron Instruments, because the stipulation puts them out of bounds. Artillery experts, too, find the ministry guidelines questionable; and since each type of fuse involves different technologies, lumping all three together puts the others out of the race. Whereas if these firms were allowed to bid and run, the ministry wouldnt have to depend on just one large PSU. A Defence Procurement Policy in 2008 too had encouraged bringing in diverse suppliers.
THEY ARE calling it a confused case of fuses but only as a joke. And its a poor one, because the fact is there is no confusion at all. Many say its simply another instance of rules being bent to favour a particular party, sparking general outrage. Indeed, ever since the alleged impropriety came to light, it has been raining petitions in the Ministry of Defence (MoD), demanding a probe into the Rs 800 crore-procurement of artillery fuses four years ago. The fuses are tiny electronic devices that cause artillery shells fired from guns like the 155-mm Howitzer to instantly explode on reaching their target.
Just last week, Chief Vigilance Commissioner Pratyush Sinha received a complaint from Prasanna Patasani, a relatively unknown MP. The acquisitions must stop and the facts collated by different agencies, including the Committee of Petitions, should be acted upon, Patasani told TEHELKA. He is the latest in a long line of protesters among them a Lok Sabha committee to question the Rs 200-crore order, made on a singlevendor basis by the state-owned Electronics Corporation of India Ltd (ECIL). All spoke of how the ministry dumped multi-vendor competition, reportedly structuring the tender in a manner that excluded private bidders. Sinha has not replied, but CVC officials have confirmed receiving similar petitions earlier.
The case is a curious one, because ECIL is not a defence PSU and functions under the Department of Atomic Energy (DAE). And yet, it maintains an almost incestuous relationship with the MoD, which has made it the sole approved supplier of nearly 80 percent of the Armys fuse requirement. Earlier, Cabinet Secretary KM Chandrasekhar also looked into ECILs near-monopoly status, after a stream of petitions by MPs, the CVC, the Lok Sabha Standing Committee on Defence and the Lok Sabha Committee on Petitions (43rd report, tabled on November 8, 2008) reached his office.
So just where are the fault lines? Those protesting against the decision call it arbitrary because ECIL routinely depends for supplies on South Africas Fuchs Electronics the main supplier of fuses to South African armaments giant Denel, that the MoD has blacklisted. Highly placed ministry sources told TEHELKA that the tenders successful execution depended a lot on ECILs dependence on imported fuse components from Fuchs. The Army allows import duty exemptions for fuse components of up to 70 percent of the value of the contract.
Though ECIL is not a defence PSU it is the sole approved supplier of fuses to the army
Now consider this: the contract value includes a profit margin of about 15 percent as a result of which the 70 percent exemption clause easily allows suppliers to import 80 percent of the fuses. Clearly, this cannot be classed under local production. I would not call it indigenous, especially when a company is importing 70 percent of the fuses and assembling the components in India, says Jagdish Prasad, chairman of HBL Power Systems, which has a far higher percentage of indigenous components in its fuses. Why, then, does ECIL remain the Indian Armys sole choice? All government policies have been bypassed just to accommodate the South African product under the cover that it is a PSU, Manvendra Singh, MP and a member of the Committee of Petitions, wrote in his report. This was not all. Another committee member, HN Sharma, pointed out that ECIL merely assembles fuses from components supplied by Fuchs, and that the main components a safety and arming device, the battery along with an electronic timer kit are all imported.
Petitions from another PSU, ITI of Bareilly, were passed over despite routine submission of fuses for trials, Sharma told TEHELKA. He raised other contentious issues about the state-owned company (ECIL) as well, and explained in detail about how the company had flourished along with its key buyer, the artillery branch of the Indian Army. For example, he cited the note that Army headquarters sent to the Lok Sabha committee, admitting that former Director General of Artillery Lt Gen Charanjit Singh joined ECIL as an advisor immediately after retirement. In its defence, the Army says ECIL had routinely appointed several retired officers as its advisors, but that no one had ever questioned the move.
AND THOUGH ECIL despite repeated nudging is not talking, others have accused the ministry of allegedly doctoring the tender by lumping together three kinds of fuses: point detonation, timed and proximity. The rulebook is quite clear on this: either a vendor supplies all three, or none. This is hurting many, like the Hyderabad-based HBL Defence Electronics and Delhi-based Micron Instruments, because the stipulation puts them out of bounds. Artillery experts, too, find the ministry guidelines questionable; and since each type of fuse involves different technologies, lumping all three together puts the others out of the race. Whereas if these firms were allowed to bid and run, the ministry wouldnt have to depend on just one large PSU. A Defence Procurement Policy in 2008 too had encouraged bringing in diverse suppliers.
