CAG report: Irregularities in Defence Purchases

Published: September 24, 2020

On September 23, 2020, the Comptroller and Auditor General submitted its report on Defence Ministry to both the houses of the Parliament.

Key findings of the Report

  • The modernisation of Mi-17 medium lift helicopters that was proposed in 2002 has still not been achieved.
  • According to the report, the contracted delivery of the upgraded ninety Mi-17 helicopters by an Israeli company was to start from July 2018 and completed by 2024. However, according to the audit, 56 of these helicopters will be left with less than two years of life and phased out by 2024. In simple terms, the delay is shortening the deployment period of the helicopters
  • The French aircraft maker Dassault Aviation and weapons has not confirmed transfer of technology to the DRDO (Defence Research Development Organization). The company was a part of Rs 59,000 crore Rafale contract.
  • Due to poor planning and indecision at various stages of procurement, it took 15 years for the defence ministry to enter into upgradation contract of 90 Mi-17 helicopters with the Israeli company.

CAG on UAV Rotax Engines

In March 2010, the Israel Aerospace Industries concluded a contract to supply five 914F certified UAV Rotax Engine at a cost of Rs 87.45 lakhs per engine. The same engine was procured by DRDO at Rs 23.30 lakh per engine in 2012. The average price of the engine in the international market is between Rs 21 lakhs and Rs 25 lakhs.  The audit thus accuses that the vendor has gained Rs 3.16 crores in supplying five UAV engines at a market price three times more than the price offered to DRDO.

An investigation in to the matter has been recommended by the CAG.

Landing Platform Docks

The report says that the landing platform docks (a ship) of Indian Navy is inadequate to meet its expeditionary and amphibious operations. Hence, the Indian Navy decided to acquire vital warfare ships in 2010 at a cost of Rs 16,000 crores. However, due to failures in fixing a time frame to obtain debt restructuring exit certificate, even after nine years the contract has not been concluded.

Tankers

In 2014, approval for acquisition of fleet tankers at a cost of Rs 9,045 crores was provided by the Defence Ministry. However, the contract is yet to be concluded till August 2019.

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