In a scathing report on the 2004 Gorshkov deal,the Comptroller and Auditor General (CAG) has said the government is acquiring a second-hand aircraft carrier that has half the life span of a new ship and is turning up to be 60 per cent more expensive. The CAG has also alleged that the government has given undue favour and concessions to French firms in the Rs 18,000 crore deal for six Scorpene submarines for the Indian Navy that was inked in 2005.
On the Scorpene deal,the report says undue favour was given to award the mega Rs 18,000 crore contract to French firms DCNS for the submarine and MBDA for the Exocet missile systems onboard the vessel. Raising serious questions on the propriety of awarding the contract to DCNS,the report says the Ministry/Naval HQ scaled down the original technical specifications and extended undue financial benefit to the vendor. The report says a clause that prohibits commissions paid to agencies was not included in the contract even though it has been included in the Defence Procurement Procedure manuals of the ministry. Besides,there was an 11.06 per cent price escalation of the submarines due to a questionable formula for escalation worked out in the negotiations,the report says.
While delays and price escalations in the Gorshkov carrier have been reported in the past,the audit report brings out that failure to plan the acquisition will result in the warship having no defence against missiles and air attacks after it has been inducted into the Navy. The warship will be retrofitted with a Close-In Weapon System (CIWS) in India only in 2017,five years after its planned induction,leaving Indias flagship carrier vulnerable to air attacks.
The report says the crucial arresting gear system that is needed when the aircraft lands on the carrier has not been finalised due to development problems. Saying that alternatives are being worked out,the report fears that this could further increase the risk of further delay in the delivery of the ship.