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How a CAG report exposed DRDO’s mishandling of AEW&CS programme

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The CAG report showed irregularities in the selection of aircraft for the programme

By Pradip R Sagar August 29, 2018

Indian Air Force’s indigenous AEW&CS in action during ‘Exercise Iron Fist’ in Pokhran | PTI

THE WEEK

As the indigenous Airborne Early Warning and Control System (AEW&CS)—aircraft fitted with a radar system—flew over the Rajpath during the 2017 Republic Day parade, India joined an elite group of five countries that had this capability. But, before it could be formally inducted into the Air Force fleet, the ‘Eye in the Sky’ has flown into turbulence.

A report by the Comptroller and Auditor General, which was recently tabled in Parliament, has made startling observations about the programme, on which the Defence Research and Development Organisation has spent more than Rs 2,500 crore.

The CAG report showed irregularities in the selection of aircraft for the programme. The auditor slammed the DRDO for the cost overrun—the initial cost was Rs 1,800 crore—and its claims about indigenousness. Moreover, preferred vendors were selected to benefit certain companies, said the report. Though the Air Force had accepted the AEW&CS last year, it is yet to get the final operational clearance.
The AEW&CS is a moving surveillance platform, making it difficult for the enemy to locate the exact position of the aircraft. With its long range and detection capabilities, it gives a 360 degree view of the sky and can track many aircraft simultaneously.

China currently has 20 such airborne warning systems, while Pakistan has eight. The Indian Air Force has only three—Israeli Phalcon radar systems mounted on Russian IL-76 aircraft. India had bought the radar systems from Israel in 2004. According to experts, India currently does not have the capability to cover its entire airspace during a war.

A programme to develop an indigenous early warning system was taken up in 1994, but was shut down after a fatal crash. Subsequently, the defence ministry in 1999 approved the import of three airborne warning systems (the ones from Israel) and decided to meet further requirement through indigenous development.

In October 2004, the cabinet committee on security approved indigenous development of AEW&CS at a cost of Rs 1,800 crore. The deadline was April 2011. Under the project, two AEW&CS were to be supplied to the Air Force. DRDO’s Bengaluru-based laboratory, Centre for Air Borne Systems (CABS), was the nodal agency for design and development.

Considering the operational importance of this project, the CAG carried out an audit to know whether the system had everything that was promised. K. Subramaniam, principal director of audit, Air Force, recently sent the classified report to Dr S. Christopher, the then secretary of the Department of Defence Research and Development—which found serious irregularities in the programme.

The report has come down heavily on the programme over its claim of indigenousness. Despite the project being called home made, it was only 48 per cent indigenous. The DRDO had claimed it to be 81 per cent. And, the cost of foreign consultancy, about Rs 106 crore, was categorised as indigenous.

The CAG’s observations draw strength from the ongoing CBI investigation into alleged kickbacks in the process of selecting the aircraft. The Embraer EMB-145 aircraft from Brazil was shortlisted for the project in 2007. However, Brazilian media reported that Indian officials were bribed to swing the deal in Embraer’s favour. In 2016, the CBI registered a case against NRI arms dealer Vipin Khanna and two private companies based abroad. The case was about the alleged payment of more than $5.70 million as kickbacks to seal the deal for the aircraft.

The CAG report also pointed out inadequacies in management, which stretched the development period to 13 years. “And, the operational requirements, instead of being based on the functional needs of the Air Force, were being adjusted according to the aircraft that was ‘pre-selected’. It took seven years to finalise the operational requirements,” said the report.


During the design and development stage, some operational parameters were compromised because of the Embraer’s limitations. Also, there was no competitive bidding while selecting the aircraft. The Embraer was shortlisted through a nomination. Notably, several aircraft, such as the IL-76, and models from Gulfstream, Bombardier and Boeing were available at the time.

“The justification given for the selection of EMB-145 was not tenable,” the CAG observed. “No objective assessment of the merits and demerits of available options was done. The selection of EMB-145 was arbitrary and based on preconceived preference.”

Initial operational requirements stipulated that the system should be able to operate from high-altitude locations like Leh to have a much deeper view into the Chinese army’s activities. As the EMB-145 was incapable of doing so, claims the report, the Air Force had to drop this requirement in February 2006.

The report also said that the Air Force officials working with the DRDO reiterated that Embraer was not the suitable aircraft.

The CAG also criticised the project for the way the pilots were trained. “From the scrutiny of the expenditure on training, the audit found that the training commenced in June 2007. At this point, the procurement contract for EMB-145 was yet to be awarded and negotiations were underway between the CABS and M/s Embraer. Therefore, training of pilots on an aircraft even before finalising its purchase is highly unjustified,” CAG pointed out. Six pilots were trained abroad at a cost of Rs 23 crore.

Of the 18 requirements specified by the Air Force, AEW&CS could not fully achieve ten important ones. Despite this, the Air Force accepted the first system in February 2017.

“Since EMB-145 was selected, the weight of the mission system had to be adjusted to the optimum payload capacity of EMB-145, which was 3,000kg. The radar along with its associated systems, which was to be mounted on the fuselage, had to be limited to 1,500 kilos due to structural limitations,” the CAG said.

The probable date of completion was revised four times and the final date of completion was extended by over six years, said the report. The Air Force kept changing its requirements. In the middle of the programme, the Air Force demanded air-to-air refuelling and a de-icing system. It led to a delay of nearly two years.

Christopher, who was the head of CABS, said the repeated modifications in the operational requirement by the Air Force played a major role in the delay of the project. “It is all recorded in official documents and no one can find fault with me for it,” he said. “However, I believe that operational requirements is a prerogative of the user and you, as a developer of the equipment, cannot challenge it.”

Regarding the aircraft, he said, “Embraer was a well-proven aircraft. The decision to buy Embraer was taken in consultation with the then IAF chief S. Krishnaswamy. Four countries were using this platform as AWACS—the generic term for such a system. Moreover, the IAF decided that it has to be a turbo jet, not propellant. Turbo engine gives them the desired speed and efficiency.”

When contacted, Krishnaswamy said the selection of aircraft was purely DRDO’s decision. “The IAF was using Embraer for its VVIP fleet and thought of commonality if it is selected for AEW&CS. Since AEW&CS was DRDO’s project and budget was allocated to them, the final decision for selecting aircraft was DRDO’s only,” he said, adding that any modification in the operational requirements was a collective decision of the Air Force and the DRDO.

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CAG blows holes in DRDO’s early warning planes

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The auditor has said that operational requirements specified by the IAF were not met and added that there has been a 70% time overrun. (Representative image)

By Shaurya Karanbir Gurung, ET Bureau, Aug 08, 2018
After a Central Bureau of Investigation probe into corruption allegations, the Comptroller and Auditor General has also cast a shadow on an indigenous program for Airborne Early Warning and Control (AEW&C) system ordered by the Air Force.

In a detailed report, the CAG has stated that the project is yet to be fully realised even though it was conceived in 2002, leaving gaps in the IAF’s air-surveillance capability.

The auditor has said that operational requirements specified by the IAF were not met and added that there has been a 70% time overrun.

The central auditor also said selecting the Embraer aircraft as the platform created design constraints and caused the delays. It may be recalled that the CBI is probing allegations that kickbacks were paid in the Embraer aircraft deal that DRDO had struck with the Brazilian aircraft manufacturer in 2008.

The AEW&C is an airborne surveillance system which detects incoming hostile fighters, cruise missiles and drones much before ground based radars.

It also detects enemy troops build-ups, warships and directs friendly fighter jets during combat. The project for the indigenous development of the AEW&C of the IAF was approved by the Cabinet Committee on Security in October 2004 at a cost of `1,800 cr. The CAG, however, said that the project’s total cost up till August 2017 was `2,425 Crore.
Under the project, two AEW&C were to be supplied to the IAF. Banglore based Centre of Air Borne Systems (CABS) of the DRDO was the nodal agency for developing the system.

The CAG says that the IAF had accepted the first AEW&C in February 2017. “However, out of the 18 operational requirements specified by the IAF, eight parameters could not be fully achieved by the AEW&C,” said the CAG report.

Some of these operational requirements are the primary surveillance radar for scanning the airspace to detect targets, the secondary radar to identify friends and foes, and the self protection suite to warn about incoming weapons. The IAF insisted that the eight parameters should be met in the second aircraft. The DRDO agreed to meet five of them, while arguing that the remaining three would not impact operations.

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Shut Down Laboratories And Overhaul The DRDO, Expert Committee Tells Defence Ministry

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All non-core research activity of the DRDO must stop.
Sudhi Ranjan Sen Deputy Editor (News)  The Huffington Post 14/03/2017 3:40 PM IST

HINDUSTAN TIMES VIA GETTY IMAGES The Arjun tank stationed on the Parliament House premises for an exhibition in August 2016 in New Delhi, India.

India’s premier defence research organisation, Defence Research and Development Organisation (DRDO), needs a major overhaul, some its research laboratories closed and the organisation needs to concentrate only on development of defence platforms, a high-level committee appointed by the Ministry of Defence has said in its report.

In the last five years, DRDO has been getting between ₹6,000-₹8,000 crore annually for defence research — roughly 6% of the defence budget.

The DRDO was set up in 1958 to achieve self-reliance in manufacturing weapon systems to equip the armed forces. It has over 33,000 personnel, which includes nearly 8,000 scientists, 13,000 technicians, and 52 laboratories. Its area of research is wide and encompasses everything, from juices to nuclear missiles.

Former Defence Minister Manohar Parrikar had constituted the committee led by Lieutenant General DB Shekatkar (Retired) in May 2016 to suggest ways to enhance the combat capabilities of India. The panel submitted its 550-page report to the government recently.

Top sources told HuffPost India the committee has said as many as 11 laboratories of the DRDO need to closed down or amalgamated and its “non-crore” research activities stopped. The committee also said that DRDO needs to work with “clearly defined” objectives to develop “weapon systems and platforms”.
Instead of the DRDO deciding on areas and focus of research, the committee has recommended setting up of a “Technology Commission”, headed by the defence minister, with representatives from the armed forces. The commission should formulate research and development policy and even set specific deadlines for research.

The committee feels that end-users — the three services — must be consulted on areas of research and development of weapon systems. To break the red-tape in the DRDO, the committee has suggested that DRDO scientists be given incentives for successful completion of projects.

Suggesting further reforms, the DB Shekatkar Committee has also said that Ordnance Factory Boards (OFB) — which produce bulk of the ammunition and weapons used by the forces — should consult the armed forces when inducting new technology or material. It has pointed to the fact that OFB, which produce rifles, wasn’t aware of the exact weight of the guns it was producing.

Interestingly, the committee has said that OFB needs to include private companies and has suggested using private-public partnerships to speed up production, ensure better quality and cut down delays.

This isn’t the first time an overhaul of the DRDO has been recommended. Questions have been frequently raised about the delays and cost over-runs in DRDO projects.

In a 2015 report, the Comptroller Auditor General (CAG) had pointed out that audit examination of 14 mission mode projects, carried out by DRDO laboratories, “revealed that all projects failed to achieve their timelines and the probable date of completion (PDC) was extended many a times”.

These mission mode projects include the crucial S-band surveillance system ‘Rohini’ radars, secure video and fax communication between airborne platforms and ground station ‘Meghdoot’ and electronic warfare suit for the modified MIG-29 fighters.

The delays, the CAG pointed out, “were mainly due to inadequate monitoring”.

 

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CBI finds Embraer deal fixer, may unmask bribe recipients

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TNN | Updated: Sep 29, 2016,

embraer-29-sep-2016NEW DELHI: CBI claimed on Wednesday that it has managed to track down a middleman, a foreign national, who was allegedly paid $5.5 million as commission by Brazilian company Embraer to bag a Rs 1,350 crore ($208 million) jet deal with India in 2008.

Sources said investigation has established that the payment was linked to the sale of jets to India. Although sources refused to identify the “middleman” or spell out his nationality citing confidentiality clause undergirding cooperation among investigating agencies, they said he is a controversial figure and has been known to be conduits for arms deals. “We will ask Embraer why did they pay such a big amount to the gentleman in connection with the deal with Defence Research and Development Organisation (DRDO) for airborne surveillance systems,” said a CBI officer, adding that the breakthrough could put the agency on the trail of other beneficiaries.
CBI sources said they will approch law agencies of some countries, including Brazil and UK, to get details on him and other aspects like the mode of payment. “That is how this business functions. The defence contractor pays the money to the middleman who, after retaining his own share, distributes the money to those who may help him swing the deal,” said a source.

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S Christopher is new Director General of DRDO; GS Reddy appointed scientific advisor to Defence Minister

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By ET Bureau | 28 May, 2015, 09.30PM IST

s-christopher-is-new-director-general-of-drdo-gs-reddy-appointed-scientific-advisor-to-defence-minister
After a gap of several months, DRDO has finally got a new leadership with Defence Minister Manohar Parrikar pushing through a new concept to divide the top post into two parts.

After a gap of several months, DRDO has finally got a new leadership with Defence Minister Manohar Parrikar pushing through a new concept to divide the top post into two parts.

The government on Thursday appointed S Christopher who heads the centre for airborne systems as the new Director General of DRDO with the rank of a secretary.
Splitting the top post, the government also appointed the younger GS Reddy – a missile scientist – as the scientific advisor to the defence minister. Reddy will directly report to Parrikar and will be the pointsman for the minister for defence research projects.

Both top officials have got a term for 2 years, though Reddy is expected to continue after that and would be a contender for top job of DG DRDO.
The new appointments come after DRDO chief Avinash Chander was removed from his post in January with Parrikar saying that the government wants to have a new, younger leadership for the organisation.

The splitting of the post ks first among a series of structural changes that are expected at DRDO in coming months.

It is still not clear how the responsibilities will be divided among the two as the ministry has not come out with a detailed notification.

Both officials are expected to be based in Delhi.

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Perform or perish

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by Harsh Pant Wednesday, 4 February 2015 dna

The Modi government has done the right thing by jolting an ossified bureaucracy

India’s ossified bureaucracy is being shuffled like never before. The most recent development in this realm has been the rather dramatic sacking of Sujatha Singh from the post of the Foreign Secretary and the appointment of S Jaishankar to that position. The rumours about this development were floating around for quite some time. Still, when the decision actually came to replace Singh about seven months before the end of her tenure, it ended up sending shock waves through the complacent Indian foreign policy establishment.

No one seems to be contesting that Jaishankar is a great choice. Yet the critics of the decision have largely focused on bureaucratic niceties by suggesting Jaishankar’s appointment not only curtailed Singh’s career but also ended up blocking the career prospects of some senior Indian Foreign Service (IFS) officers. The reaction of the Congress Party has been rather strange with former information and broadcasting minister Manish Tewari trying to link the action to the Khobragade episode involving an IFS officer who was jailed in the US two years ago for allegedly mistreating her maid. He tweeted: “Is sacking of Foreign Secretary late retribution for her stand on Devyani Khobragade affair? Removal after a Presidential visit ‘coincidental’?”

Such criticisms of the government’s decision are missing the key point. This decision should be viewed as part of a larger, and much needed, bureaucratic shake-up that the Prime Minister is engendering. Just two weeks ago, the government had also terminated the appointment of the Defence Research and Development Organisation (DRDO) chief Avinash Chander, 15 months before his contract was to end.

Prime Ministers till now have devoted, at best, occasional interest in nuclear and strategic policy issues, mainly preferring to delegate substantial levels of policy making discretion to organisations like the Department of Atomic Energy (DAE) and the Defence Research and Development Organisation (DRDO). The conduct of the DRDO has been largely driven by an effort to protect its direct communicative link to the Prime Minister, secure recurrent generous funding, and maintain a high level of autonomy. Given its significant budgetary resources in the context of a developing nation, DRDO has repeatedly failed in delivering quality output. Major projects of the DRDO including the Light Combat Aircraft Tejas, Nag missile, Long-range Surface-to-Air missile project and the Airborne Early Warning and Control System have either not been completed on time or have resulted in huge cost overruns. It took the agency almost a decade and a half to operationalise the Agni-I.

The inattention or inability of the Prime Minister’s office so far to take concrete steps to improve the DRDO’s performance and compel it to cooperate with other defence bureaucratic stakeholders has permitted it a remarkable degree of self-governance in budgetary prioritisation, project design and delivery time-scale planning, and setting operational policy through regular statements outlining the doctrinal meaning of DRDO products. Prime Minister Modi had criticised the DRDO for its chalta hai attitude during an address in Kargil in August last year when he had said, “If a project was conceived in 1992, it should not be the case in 2014 we are still saying it will take some more time.” And in December last year, India’s Parliamentary Standing Committee on Defence had censured the DRDO, accusing it of shoddy research, chronic inefficiency, inordinate delays, corruption and its penchant for reverse engineering. The government seems to have taken the bull by the horns and removed Chander to ensure some semblance of accountability in the organisation.

The appointment of Jaishankar as foreign secretary is also along the same lines that merit would be rewarded. The Indian Foreign Service (IFS) needs to recognise that business as usual is no longer enough. At a time when India’s global imprint is expanding rapidly, a risk-averse foreign policy bureaucracy will not be able to meet the aspirations of the nation. The idea that seniority should determine who should be the nation’s top diplomat is an idea whose time has long gone. But bureaucratic resistance has prevented any substantive reforms in the service. There are hardly any incentives to perform and hardly any penalties for underperformance.

As a result, nearly everyone in the diplomatic service manages to rise to the upper echelons. Despite the fact that the best and the brightest are no longer attracted to the IFS, there have been few attempts to cultivate outside expertise, with hardly any opportunities for lateral entry or temporary rotations. In fact, it was Manmohan Singh who had wanted to introduce lateral entry in the Indian bureaucracy in his first term but the idea was quietly killed by the bureaucracy (who else?). Personnel are scarce and demands are growing on the IFS but Indian diplomats have not managed to transform the service and change its character to suit the needs of the time. Is it any wonder then that ad hocism pervades Indian foreign policy thinking?

Bureaucracies, if not competently led and directed, tend to morph into interest groups with a focus on preserving their own institutional privileges. In democracies, effective political control and guidance is absolutely critical if the role of bureaucracies is not to become corrosive on policymaking. It is in the nature of bureaucracies to be risk-averse. Leave them alone and they will muddle along the path of least resistance, trying to increase their power by resisting change. The Modi government is right in shaking things up and making Indian bureaucracies more accountable and effective. But much more remains to be done!

The author teaches at King’s College, London

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PM scraps DRDO’s ‘retirement benefits’ committee

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ABHINANDAN MISHRA New Delhi | 20th Sep 2014 – The Sunday Gaurdian
Prime Minister Narendra Modi has decided to scrap the Departmental Peer Review Committee (DPRCs) of the Defence Research Development Organisation (DRDO) in an attempt to revamp the outfit. The main job of this committee of DRDO scientists is to grant extensions to fellow scientists. The committee has come under scrutiny after complaints that all that these scientists do is to park retiring and retired colleagues in important posts year after year. “The PM has ordered the scrapping of the committee that reviews cases to grant extension of service to scientists who are superannuating. Giving repeated extensions to scientists, whose capabilities could be questioned, is one of the major problems with the DRDO,” a DRDO official said.sunday gaurdians clip

Sources said that 15 top scientists in DRDO, including Director General (DG) Avinash Chander, are on extension. After getting two extensions, Chander is now on contract. “What should have been an exception, has become a norm here. Every year, six to eight senior people in DRDO get extensions. This has led to an alarming attrition rate in the organisation,” said a scientist who has been working with DRDO for the last 12 years. In the seven years between 2007 and 2013, at least 687 scientists left the organisation, which comes to a rate of 100 scientists leaving the organisation every year.

The DRDO, best known for missing manufacturing deadlines, is gearing up for a hard time after PM Modi told its scientists and officials that their lackadaisical approach would not be tolerated anymore. Last month, while addressing the annual award function of the organisation in the national capital, the PM expressed his unhappiness over the way things were working in the organisation.

“The Prime Minister is clearly unhappy with the way the DRDO has been functioning, as most of our projects are running years behind schedule, resulting in cost overruns and compromising of national security. During the event, he made sure that that senior officials were made aware of his views on the subject and the fact that such lackadaisical approach would not work anymore. With the government approving 49% FDI in defence, we need to start performing now,” said a senior DRDO official. Modi, while commenting on DRDO said that the organisation “should not say in 2014 that a project conceived in 1992 will take some more time”.

DRDO, founded in 1958, has a network of 54 laboratories, employs close to 35,000 employees including 7,500 scientists. In July this year, the BJP-led NDA government increased DRDO’s budget from Rs 5,985 crore — as provided by the UPA’s interim Budget in February — to Rs 9,298 crore, the largest ever increase in the organisation’s history.

However, despite being treated with extreme care by successive governments, DRDO has still not been able to shake off the negative image associated with it. Most of its projects, ranging from Tejas light combat aircraft and long-range surface-to-air missile systems to NAG missiles are running years behind schedule.

According to officials, at least ten major projects that are being worked on by the DRDO have exceeded their stipulated date. “The major ones among these are the light combat aircraft, naval light combat aircraft, aero engine Kaveri, airborne early warning and control aircraft, long range surface-to-air missile, air-to-air missile Astra, advanced lightweight torpedo, dual colour missile approach warning system for fighter aircraft. If you include the minor ones, like the NAG missile system, then the number of incomplete projects will become even more,” the official stated.

According to a former bureaucrat, who had worked in the Ministry of Defence, the government has been always generous when it came to funding the DRDO. “The DRDO has never suffered from any paucity of funds. The main problem with the organisation is at the top. No accountability is fixed on them. There is no other place where you will find senior officials being given repeated extensions despite doing nothing.”

The former bureaucrat added that he had come across instances where the country’s defence preparedness suffered because the DRDO first made a commitment that it would manufacture the product, but when the deadline arrived, it did not have the product. And in cases where the product was there, the quality was not acceptable. “It is a shame that due to DRDO’s inefficiency the country has to import more than half of its defence requirements,” he said.

Even the Comptroller and Auditor General (CAG) has time and again come down heavily on the DRDO. “Year after year, the CAG has revealed the kind of mismanagement that has been happening in the DRDO. In February this year, CAG audits revealed that the DRDO spent Rs 52 crore to buy a cooling substance, which was to be used in the NAG missile system in 2007. The interesting part is that the NAG was not operational at the time and it is still not operational. Can you expect such kind of mismanagement from any other defence organisation in the world elsewhere?” an official with the DRDO said.

According to him, the onus of revamping the DRDO is with the Defence Minister. “The DRDO officials and the defence ministry bureaucrats will not take the bull by the horn; no one wants to disturb the status quo. It is the Defence Minister who needs to do it. The minister needs to implement the recommendation of the first-ever external review report of the DRDO, which was prepared by an independent committee of experts headed by P. Rama Rao, former secretary, Department of Science & Technology, and former ISRO man Dr Brahm Prakash. It had recommended a massive restructuring of the 50-year-old body to make it more effective,” the official said.

However, Ravi Kumar Gupta, Director, Directorate of Public Interface, DRDO, said that the PM was very appreciative of the work being done by the organisation during his interaction with the officials last month. “He has positive views about the organisation and said that the organisation had a lot of potential and whatever we were doing, we were doing it in a professional way. He also said that just as it holds true for any other organisation, we too should not lose focus and follow the chalta hai attitude,” Gupta said.