August 28, 2014

Arun Jaitley to hold first major meeting on defence modernisation, top deals and policy issues to be discussed

More than three months after he took charge of the Defence Ministry, Arun Jaitley is set to have his first major meeting on defence modernisation with several critical deals and contentious policy issues likely to be discussed at a defence acquisition committee (DAC) on Friday.
While the minister has been taking stock of defence matters with several rounds of meetings with bureaucrats and senior ministry officials, Friday's meeting is likely to be of great importance as it will see him taking calls on deals worth over Rs.20,000 crore and discuss issues like rules on the engagement of agents by foreign vendors.
It is believed that two major deals for the air force - a Rs.2,500-crore contract for 15 Chinook Heavy Lift choppers and a Rs.3,100-crore deal for 22 Apache attack choppers - will be put up before the defence minister for approval at the Friday meeting.
The Army, which has been hit by a dire shortage of airlift capabilities with the last government not being able to procure choppers for a decade, is also likely to make a presentation to Jaitley at the meeting on the 197 Light Chopper deal that has been left hanging over the last two years. The deal got stuck after one of the three competitors, AgustaWestland, was under investigation for corruption charges in the VVIP chopper deal.
There is likely to be forward movement on the deal given that the government has on Tuesday notified a new set of rules to be followed when dealing with contracts involving AgustaWestland and Finmeccanica.
According to these rules, procurement cases in which the tainted company was participating will go forward, with the condition that if Agusta wins, it shall not be awarded the deal. In the light chopper case, Agusta has already been eliminated on technical grounds. A decision on the contract will go a long way in helping the Army cope with transportation issues, especially to supply troops on the Siachen Glacier where these choppers are the only lifeline.
Interestingly, the Friday meeting is also likely to discuss the current policies being followed on the engagement of agents by foreign vendors. It may be recalled that the Minister of State for Defence Rao Inderjit Singh has said in the past that the blacklisting process will be reviewed as it has been hampering acquisitions.
Another critical topic that is likely to be discussed is the procurement of third generation anti-tank guided missiles for the Army. The US, it may be noted, has been making a strong pitch for participating in this programme as a joint development project under the Defence Technology Initiative  and has offered its Javelin missile.
Jaitley, who has taken a special interest in the Navy after taking over by paying several visits to bases on both coasts, is also likely to clear a new project to bolster the underwater fleet that has seen a depletion in capabilities over the past few years. A proposal to give a medium refit to six of the Navy's Kilo-class submarines and to equip some of them with modern sonars is likely to be discussed. This project would cost upwards of Rs.5000 crore, sources indicated.
For the Army, Jaitley is likely to take a final call on the procurement of 118 new Indian-built Arjun tanks that is likely to cost Rs.6,700 crore. This will be a repeat order for the Army. The more interesting project, however, is the acquisition of the first batch of the Arjun catapult artillery system that would give a boost to the artillery arsenal that has not seen any new additions for almost three decades following the Bofors scam.
Sources said that Jaitley is likely to take a call on the procurement of 40 new 130 mm self-propelled Arjun artillery systems that have been developed by the OFB and have cleared all user trials. The deal is likely to cost the army close to Rs.900 crore, it is believed.
All eyes are on Jaitley for what is being considered as his biggest meeting in the defence ministry after taking over.


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