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PAC to debate tainted Scorpene submarine deal

Last Updated: Sunday, October 25, 2009 - 11:14

New Delhi: Parliament`s Public Accounts
Committee is scheduled to take up the alleged financial
"advantage" given to a French company while concluding the Rs
18,798-crore Scorpene submarine deal.

The Committee, at its meeting on Tuesday, would go into
the report of the Comptroller and Auditor General relating to
"undue favour to vendor in acquisition of submarine,"
Parliament sources said.
Defence Ministry officials would also give oral evidence
on the issue before the Committee, headed by expelled BJP
leader Jaswant Singh.

Bogged down by kickback charges, the Scorpene submarine
deal came under criticism from the CAG for the delay involved
and the financial "advantage" given to the French company.

In its audit report tabled in Parliament in July, the CAG
came down heavily on the Defence Ministry for the nine-year
delay in concluding the contract.

It also slammed the "undue financial advantage" shown to
the French company, which hiked the price by Rs 2,838 crore
despite the vessel`s design being unproven.

The CAG report for 2008 had said Indian Navy`s projected
requirement for a submarine fleet was approved in 1997, but
the contract with Armaris, a joint venture of DCN and Thales,
was done only in October 2005.

The CAG had noted that the project to construct six
Scorpenes at Mazagon Dockyards Limited (MDL) had already
slipped two years behind schedule, though the delivery of the
submarines was fixed between 2012 and 2017.

"The contractual provisions resulted in undue financial
advantage to the vendor of a minimum of Rs 349 crore, besides
other unquantifiable benefits," the report had said.
India also extended to the vendor "wide ranging
concessions" on warranty, performance bank guarantee,
escalation formula, arbitration clause, liquidated damages,
agency commission and performance parameters, it added.

The Committee is also expected to look into the
performance audit report relating to the Midday Meal Scheme
and listen to the oral evidence from officials of the Ministry
of Human Resource Department.

The BJP and its ally Shiv Sena had boycotted the first
meeting of the PAC in September and asked Jaswant Singh to
quit the post. But Singh has refused to put in his papers.

BJP faced an embarrassing situation when Singh rejected
its request to step down from the post after he was expelled
from the party on August 19 following controversy over his
book on MA Jinnah.

As per rules, he cannot be removed unless the Speaker
finds him unable to discharge his duties.

Bureau Report

First Published: Sunday, October 25, 2009 - 11:14
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