Procurement: The Downside Of Virtue

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September 30, 2013: The Indian Navy is desperately seeking government permission to buy 262 more Barak-I anti-aircraft/missile missiles. Israel is willing to sell the missiles for $573,000 each. At the moment, 14 major Indian warships are equipped with Barak. India first bought Barak 1 in 2000 and in 2007 joined Israel in developing the current Barak 8. Both these projects are in trouble because of bribery accusations. Over the last decade Israel has sold over 6 billion dollars’ worth of arms to India. The biggest single item 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.

Indian corruption investigations revealed that large bribes were paid to Indian officials to make those Barak sales happen. Those naughty Israelis joined naughty Swedes, Italians, and evil foreigners from several other nations that had made major weapons sales to India via Indian officials demanding bribes. 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. The problem is that the CBI (Central Bureau of Investigation) tends to blacklist foreign suppliers accused of corruption until the case can be resolved. Oddly, Israel was not added to the blacklist because of the corruption allegations, apparently because of the Barak 8 joint venture. Nevertheless, in August 2012 CBI put a hold on the navy request for more Barak 1 missiles. This may be a ploy to get the navy to be more helpful in the corruption investigations. No one really knows, and when it comes to investigating corruption in India, things get murky real fast.

The investigation of the Israeli supplier that began in 2006 continues. That is in part due to the senior Indian officials charged for receiving the bribes are trying to shift most of the blame on the Israelis, despite the fact that these bribery cases almost always begin with the Indian officials demanding a bribe to make the sale happen. In the Barak case, the Indian Navy wanted the missiles but the Israelis were led to believe that the bribes were normal Indian practice. They were, but they were still illegal and in the last decade there has been growing popular pressure to crack down. It comes down to what is more critical, military readiness or allowing the notoriously slothful Indian legal process to play out. As is typical with government bureaucrats everywhere, when under stress the civil servants will take refuge in following the letter of the law no matter what. 

The original Barak 1 missiles weighed 98 kg (216 pounds) each, with a 21.8 kg (48 pound) warhead. The missiles were mounted in an eight cell container. The radar system provides 360 degree coverage and the missiles can take down an incoming missile as close as 500 meters away from the ship. The missile has a range of ten kilometers and is also effective against aircraft. Israel 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. The Barak has been exported to India, Chile, Singapore, and Venezuela.

India has bought over $500 million worth of these systems. But the missiles are used regularly for training and the navy needs to maintain a war reserve of missile reloads to replenish heavy usage during combat. Once you've made a major purchase via a tainted process, you still 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 try to concentrate 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. The problem is getting the Indian courts to decide who to go after and persuading the CBI to get out of the way. Meanwhile, without the 262 new Barak 1 missiles the navy has to either cut back on training or see the war reserve fade away.

And then there’s the Barak 8. This year Israel began installing its new Barak 8 anti-aircraft missile on its three 1,075 ton Saar 5 class corvettes. This should be done by the end of the year, which means the system will be ready for action before its scheduled 2015 service date. Israel is believed to be rushing this installation because Russia has sent high speed Yakhont anti-ship missiles to Syria, and Barak 8 was designed to deal with this kind of threat. Barak 8 is also Israel’s first air defense system equal to the American Patriot (and similar systems like the U.S. Navy SM-2, Russian S-300, and European Aster 15). An improved Barak 8 would be able to shoot down short range ballistic missiles.

Barak 8 is a joint Indian-Israeli project, some 70 percent of the development work has been done in Israel, although India will be the major customer if the CBI permits. The two countries evenly split the $350 million development cost. India wants to buy $1.1 billion worth of Barak 8. Each Barak system (missile container, radar, computers, and installation) costs about $24 million. Azerbaijan has also bought Barak 8.

Back in 2009, Israel successfully tested its improved Barak 8 missile for the first time. The Barak 8 is a 275 kg (605 pound) missile with a 60 kg (132 pound) warhead and a range of 70 kilometers. The warhead has its own seeker that can find the target despite most countermeasures. The missiles are mounted in a 1.7 ton eight cell container (which requires little maintenance) and are launched straight up. The compact (for easy installation on a ship) fire control module weighs 1.3 tons.

During the last decade India has become much less tolerant of corruption within the military, and especially when it involves procurement. The most recent example of this is the dismissal of an Indian Air Force officer for demanding a $336 bribe from a French firm (for a better location for a display) in 2011 at a military trade show in India. What worries many Indians is that, even when pressed, the government will only go after the small-time players and the big-time thieves (often very senior officials) will be ignored. In the last decade the Indian government has conducted more and more investigations for obvious corruption and caught only minor players. 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.

Indian efforts to curb corruption in defense procurement doesn't always work out. Sometimes the target of the investigation turns out to 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 blacklist 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. That’s what is happening with Barak 1 and several other crucial systems.

 

 


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