India to ensure greater transparency in defence purchases

August 1st, 2008 - 4:44 pm ICT by IANS  


New Delhi, Aug 1 (IANS) India said Friday it would ensure greater transparency in the purchase of military hardware by streamlining procedures to speed up the acquisition process. Significantly, the Defence Procurement Procedure-2008 (DPP-2008) released Friday contains a provision for banking the reinvestments in India that foreign vendors would have to make in all deals worth over Rs.3 billion ($70.8 million).

DPP-2008 also lays down clear guidelines for conducting trials to remove ambiguities of the kind that led to the cancellation of a major helicopter deal that was on the point of being signed last year, and also rationalises the licensing system to promote joint ventures between foreign vendors and Indian industry.

“If our armed forces are to modernise, we need to speed up the procurement process. I don’t claim (DPP-2008) is 100 percent foolproof. There is still scope for improvement,” Defence Minister A.K. Antony said while releasing the report in the presence of the top brass of the armed forces and senior bureaucrats of his ministry.

DPP-2008 builds on similar documents released in 2002, 2005 and 2006, the last one specifying that the procedures would be reviewed after two years.

On the question of transparency in defence deals, DPP-2008 says that vendors will be given advance information before a request for proposal (RFP) goes out in all procurement cases, except those that are security sensitive.

This information, posted on the defence ministry website, would provide them lead time for preparing their offers in response to the RFP.

This apart, all verbal communication with the vendors during the course of trials would be confirmed in writing.

As for the field trials, the methodology for this would be clearly stated in the RFP.

“Trials have always created controversies. We have learnt from this and have made the process more transparent,” Antony pointed out.

The Indian Army was on the verge of signing a contract last year with a European manufacturer for purchasing 197 utility helicopters when the negotiations were abruptly called off on the ground that the company had sent the civilian version of the machine and not the military one for evaluation.

To facilitate foreign vendors in discharging their reinvestment obligations - called offsets - as also promote joint ventures with Indian industries in the public and private sectors, DPP-2008 removes the need for them to obtain a license from the defence ministry. They will now have to obtain only a licence only from the industry ministry.

“This will hasten the process of indigenisation, help both the defence public sector units and private industry from entering into joint ventures with foreign companies, and also strengthen the DRDO (Defence Research Development Organisation),” Antony maintained.

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