PM ill-advised on middlemen: Bhagwat

India's former naval chief Admiral Vishnu Bhagwat also seeks an end to middlemen in defence deals.

india Updated: Oct 16, 2006 12:37 IST

Strongly demanding an end to middlemen in defence deals, India's former naval chief Admiral Vishnu Bhagwat has said that Prime Minister Manmohan Singh has been wrongly advised on the issue.

He described as "extremely unfortunate" Singh's statement that the presence of agents in defence deals was unavoidable, but their role could be regulated. Bhagwat also demanded a thorough probe into all defence deals during the tenure of former defence minister George Fernandes.

"With all due respect to the prime minister, I would like to clearly say he has been misadvised on the issue. It is very unfortunate that an honest man leading the country should have formed such an opinion, as presence of middlemen is a very dangerous trend."

"We have been victims of so many acts of subversions of military and civilian intelligence due to these middlemen and this should be shelved straightaway", Bhagwat told the BBC Hindi service programme Aapki baat BBC ke Saath.

"The Defence Procurement Procedure 2006 eliminates all middlemen. During the days when defence procurement was being done from the erstwhile Soviet Union, there were no middlemen at that time."

"In my view, middlemen should never be allowed in defence procurement deals as these elements carry out acts of subversion against the military establishment and intelligence agencies. They work as intelligence stooges of foreign agencies and hike the price of equipments by at least 15 per cent."

"In this communication era, there is absolutely no need of middlemen, who are at best post offices for defence deals. They have little or no knowledge about the equipments, systems and their operational details", the former navy chief said.

Bhagwat, who was removed as naval chief during Fernandes' tenure as defence minister, said: "I know from my personal experience that the cost for acquisition of aircraft carrier Admiral Gorshkov in August 1998 was fixed at US $400 million in Moscow."

"However a few months later in February in collusion with Admiral Nanda and his son, George Fernandes, the Defence Minister at that time got the price fixed at US $738 million. Tell me how this was possible and how this could have been done without political pressure and collusion between politicians and middlemen."

"All middlemen are influential people—look at the case of Admiral Nanda and George Fernandes. Their friendship goes back 35 years, when George was the president of the dock workers union and Amdiral Nanda was its managing director. I hope CBI would unearth all this."

"Look at the price we have been paying due to the presence of these middlemen. We purchased a 35-year-old design of Hawk Advance Jet Trainers (AJTs) from British Aerospace, a company whose track record in frauds is well known in Britain."

"The Serious Frauds Office of Britain has stated that British Aerospace paid a heavy bribe to Saudi authorities for ensuring defence contracts", Bhagwat said.

Attacking the political establishment for interfering in the functioning of armed forces and especially in defence deals, he asked: "Can anyone explain why Rear Admiral Purohit was turned out of service? Can any of the ministers in NDA government explain this?"

"He was eased out because he was not ready to tolerate interference from influential people close to Prime Minister Vajpayee and his son-in-law Ranjan Bhattacharya".

Demanding a thorough probe against Fernandes, Bhagwat said: "The Comptroller & Auditor General (CAG) report of 2001 has said that all rules and regulations were bypassed in the defence purchases for Kargil conflict. The government at that time did not allow that report to reach the Public Accounts Committee (PAC) of Parliament."

First Published: Oct 16, 2006 11:33 IST