Defence ministry rapped for loss in Scorpene submarine project

Thursday, February 24, 2011

NEW DELHI - Pressing for a fool-proof procedure for military acquisitions, a parliamentary committee Thursday rapped the defence ministry for not giving information on the financial loss suffered by the government in the much-delayed Scorpene submarine construction project.

In its action taken report (ATR) on its earlier findings relating to the Scorpene submarines acquisition, the Public Accounts Committee (PAC), headed by Bharatiya Janata Party (BJP) leader Murli Manohar Joshi, also asked the defence ministry to fix responsibility for the financial loss to check the recurrence of such incidents.

Releasing the ATR to the media, Joshi said he had brought to the notice of the ministry that it needed to have a “fool-proof defence acquisition system”.

“The committee deplores the unwarranted stubbornness on the part of the defence ministry not to quantify the exact loss in terms of money due to delayed procurement of submarines for obvious reasons,” the committee said.

India is building six Scorpene submarines in collaboration with the French firm DCNS. The PACs earlier report had slammed the contract as giving undue favour to the vendor, resulting in a financial loss to the government, apart from cost and time over-runs.

The committee, therefore, reiterates the need for quantification of financial loss accrued due to delayed procurement of the equipment and desires that the ministry apprise the committee on the exact losses caused and the action taken to recover the loss, apart from fixing responsibility to check recurrence of such incidents, the 11-page report added.

In its earlier report, the committee had noted that despite a three-tier monitoring system for defence procurements, the acquisition of the submarines got delayed inordinately, pointing out that the shortcomings in the procedures pointed out by a group of ministers (GoM) after the 1999 Kargil war continued without any corrective steps being taken.

Under the Scorpene project, which began in 2006, the first submarine was to be delivered in December 2012, but will be available for induction into the navy only by the end of 2015, Defence Minister A.K. Antony had told the Rajya Sabha during question hour Wednesday.

The PAC rejected the defence ministry’s contention that the delay in the finalisation of the contract was due to the complex nature of the procurement and extensive scrutiny of proposals because of the technical nature of the project.

These are no valid excuses for delayed finalisation of the contract for as long as three years as the interests of the nation were involved in the project, the report said.

The committee impresses upon the defence ministry to discard their tendency of putting across lame excuses and take necessary corrective action to ensure that contracts are finalised within a specific time frame, it added.

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