Defence Scandals

NEW DELHI -- An arms corruption scandal is threatening to delay
India's US$30 billion plan to modernize its military to counter
security threats on its borders, officials said on Wednesday.

The scandal, involving seven companies being investigated for paying
bribes to win contracts worth US$2 billion, has revived memories of
the Bofors arms procurement affair that contributed to the Congress
party's defeat in an election in 1989.

On Wednesday, India's defence minister told parliament that the
government was reviewing procurement procedures and had halted all of
the deals involving the seven companies, which relate to artillery,
ammunition and weapons control systems.

“It is perhaps the biggest corruption scandal in defence deals in
India,” said Harsh Bhal, spokesman for India's Central Bureau of
Investigation (CBI). “It is a huge investigation and could take lot of
time to get to the bottom of the scam.”

The companies under investigation are one each from Israel and Poland,
two from Singapore and three from India. India is one of the world's
biggest arms importers, and the Congress-led government plans to spend
more than US$30 billion on defence upgrades over the next five years
to counter potential threats from Pakistan and China.

“The armed forces are in urgent need of modernization, but this scam
will cause further delays in weapons induction,” Uday Bhaskar,
director of the National Maritime Foundation, a New Delhi-based
defence think-tank said.

Last November's Mumbai attacks, in which 10 gunmen killed 166 people
in Mumbai in a three-day rampage, gave further impetus to India's need
to plug security loopholes and acquire modern weapon systems to tackle
growing militancy.

The military had planned to buy 140 modern artillery cannons from one
of the companies involved.