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The Gorshkov Scam
by James Dunnigan
April 25, 2010

India is investigating the senior naval officer in charge of the aircraft carrier Gorshkov procurement project. India recently agreed, after five years of haggling, to pay Russia an additional $1.3 billion to have the Russian aircraft carrier Gorshkov refurbished to Indian specifications. The original deal was the for about a billion dollars. But once the Russians got to work, things got complicated, and out of control. Indians are not happy with the cost increase. The Indian naval officer under investigation, commodore (equivalent to U.S. rear admiral) Sukhjinder Singh, was a key part of the negotiations with Russia, and there are accusations that he was paid off by the Russians to insure that Russia got the best of the deal.

In the last decade, the Indian government has conducted more and more investigations of this type. Not because there is more corruption in military procurement, but because the ancient practice has been getting more publicity. The Internet, in particular, made it easier for whistleblowers to be heard.

Other Indian naval officers have already admitted that they were partially to blame for the Gorshkov fiasco. They admit that, when they signed the deal in 2004, Indian engineers had not closely inspected the Gorshkov, and agreed, after a cursory inspection, that many electrical and mechanical components, buried within the ship's hull, were serviceable. It turned out that many of those components were not good-to-go, and had to be replaced, at great expense. Shortly after the contract was signed, the Russians discovered that the shipyard had misplaced the blueprints for the Gorshkov, and things went downhill from there. Now there is growing suspicion, and some evidence, that this procurement disaster was helped along by some well placed bribes.

Indian efforts to curb corruption in defense procurement don't always work out. Sometimes, the target of the investigation turns out of be innocent, often just the victim of circumstance (being told to pay the bribe, or see the contract go to someone who will). Sometimes, anti-corruption efforts backfire. An example is an attempt to black list firms that have been caught paying bribes to Indian officials, or otherwise misbehaving. These companies were to be blocked from doing any more business with India. It soon became apparent that this was not going to work in some cases. Spare parts and replacement munitions were needed for many systems manufactured by firms on the black list. And sometimes the weapons in question were badly needed. Take, for example, the Israeli Barak anti-missile systems for ships.

 Over the last seven years, Israel has sold over five billion dollars worth of arms to India. The biggest single item, with sales of nearly half a billion dollars, has been the Barak anti-missile systems for ships. The Barak system uses small missiles to shoot down incoming anti-ship missiles. Israeli weapons have a solid reputation for reliability and effectiveness. Israeli success in several wars adds to the appeal of their armaments. U.S. and Israeli arms manufacturers often work together, which also gives Israel an edge when selling their equipment.

An Indian corruption investigation revealed that large bribes were paid to Indian officials, to make those Barak sales happen. Those naughty Israelis joined naughty Swedes and naughty people from several other nations that had made major weapons sales to India. It's not like India is the only nation that has corruption problems in the military procurement area. All nations do, but the extent of the corruption varies quite a lot, and India would like to move away from the top of the list. This will please Indian taxpayers, as well as those concerned about defense matters, especially people in the military. When military suppliers are selected mainly on the basis of how large a bribe they will pay, you often do not get the best stuff available.

But once you've made a major purchase via a tainted process, you have to keep buying material to keep the system (assuming it meets your needs) operational. Despite the bribes, the Barak missiles have performed as advertised. So did the Swedish artillery, and many other items bought only after the procurement officials got their gratuity. Thus the Indians are concentrating more on the corruption among Indian officials. That way, the military won't be cut off from needed weapons, and at least one side of the corruption problem can be vigorously attacked.


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