Indian Defence Procurement Updates

Indian Ministry of Defence, The Government has signed a contract for upgradation of 63 MiG 29 aircraft with RAC – MiG, Russia, at a total value of about 964 million USD on March 07, 2008. 
 
Thirteen MiG 29 aircraft have crashed till date since their induction in mid 1980s. The upgradation of all 63 aircraft is likely to be completed by March 2014. 
 
This information was given by Defence Minister A K Antony in a written reply to Shri Braja Kishore Tripathy and Shri Kishanbhai V Patel in Lok Sabha today.  
 
—Discrepancies In Eurocopter Deal: 
The helicopter offered by Eurocopter for field trials was a civilian version whereas helicopter offered in their bid was the military version. Further, the engine fitted on the helicopter during trial was different from the one offered along with the military version of helicopter in the bid of Eurocopter. 
 
This Ministry is not aware of any person or agency as a go-between for Eurocopter in this acquisition process. 
 
This case has been foreclosed and the process as per the extant Defence Procurement Procedure (DPP), has been initiated afresh. Requisite provisions to eliminate middlemen in defence deals already exist in the extant DPP. 
 
This information was given by Defence Minister A K Antony in a written reply to Shri K S Rao and Shri Milind Deora in Lok Sabha today.  
 
— Middlemen In Defence Deals: 
On the basis of Ministry of Finance’s instructions issued on 31st January, 1989 relating to Indian Agents of foreign suppliers for all the Ministries / Departments under the Government of India, supplementary instructions were issued by the Ministry of Defence in April 1989 and in November, 2001 to regulate authorized Indian representatives / agents of foreign suppliers. 
 
The instructions provide for the regulation of representational arrangements through a system of registration, categorical and open declaration by the foreign suppliers of the services to be rendered by their authorized representatives / agents and the remuneration payable to them by way of fees, commission or any other method. 
 
So far no authorized Indian representatives / agent has been registered by the Ministry of Defence in terms of these instructions. 
 
Defence Procurement Procedure (DPP) 2006 and Defence Procurement Manual (DPM 2006) under implementation with effect from 1st September 2006 provide for direct dealing with Original Equipment Manufacturers (OEMs) or Authorised Vendors or Government sponsored Export Agencies (applicable in case of countries where domestic laws do not permit direct export by OEMs). 
 
Further, the procedures inter-alia incorporate provisions for penalties being imposed if any seller engages any individual or firm, whether Indian or foreign whatsoever, to intercede, facilitate or in any way recommend to the Government of India or any of its functionaries, whether officially or unofficially, to the award of the contract to the seller. 
 
This information was given by Defence Minister A K Antony in a written reply to Shri Shyam Charan Gupta and Shri Hansraj G Ahir in Lok Sabha today.