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Last Updated: Tuesday, 21 March 2006, 15:07 GMT
India defends submarine purchase
Scorpene type submarine under construction
India plans to build six Scorpene submarines in Mumbai
The Indian government has rejected opposition allegations of corruption in a $2bn submarine deal with France.

Defence Minister Pranab Mukherjee told parliament there was "no irregularity" in the contract to buy six Scorpene submarines from two French firms.

The deal was part of an agreement finalised during Indian PM Manmohan Singh's visit to France last September.

The opposition Bharatiya Janata Party says the government paid 4% of the contract in commission to middlemen.

Mr Mukherjee said the claims were simply untrue.

"On the contrary, the government successfully negotiated a reduction in submarine prices and managed to save more than $70m of public money," he said.

'Scrap deal'

The defence minister was replying to opposition charges that the government had paid $113m more than the estimated cost of the submarines.

The BJP-led National Democratic Alliance alleged that the extra money was meant for middlemen who, it said, had played a key role in clinching the deal.

Indian law bans commissions in defence deals.

The NDA has described the Scorpene deal as India's biggest defence scandal and has called for the contract to be scrapped.

Mr Mukherjee strongly defended the deal, saying the Indian and French governments had for the first time signed integrity pacts to ensure complete transparency in defence deals.

He said the agreement provided for safeguards, including cancelling the contract and stiff penalties if any party breached the contract terms.

Modernise

India plans to build six diesel-powered Scorpene SSK-class submarines at a naval dockyard in Mumbai (Bombay).

The deal is the latest in a series of military purchases by Delhi aimed at modernising India's armed forces.

It comes after the notorious Bofors arms deal, one of India's most high-profile and longest-running corruption cases.

The deal, signed while Rajiv Gandhi was in office, led to his electoral defeat in 1989 two years before he was assassinated. Gandhi was posthumously cleared of wrongdoing.

Prosecutors alleged that millions of dollars was paid by Swedish firm AB Bofors in commissions on the $1.3bn deal, but failed to prove their case.


SEE ALSO:
India's navy in $1.8bn sub deal
12 Sep 05 |  Business
India tops weapons purchase table
31 Aug 05 |  South Asia
Hindujas acquitted in Bofors case
31 May 05 |  South Asia
Cases filed over defence scam
06 Dec 04 |  South Asia


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