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Israel missile deal on hold

Tuesday, 6 May 2008 - 4:38pm IST
The ghost of Barak—the naval missile deal now under investigation by the CBI — is being cited by sources as the key reason behind dumping the project.

Ghost of Barak forces govt to put Rs10,000cr venture on backburner

NEW DELHI: The government has formally put on hold India’s largest-ever military joint venture with a foreign country — the Rs 10,000 crore effort with Israel to build a medium-range surface-to-air missile (MRSAM) for the Air Force. The ghost of Barak—the naval missile deal now under investigation by the CBI — is being cited by sources as the key reason behind dumping the project.


Defence secretary Vijay Singh on Monday summoned the representatives of the Israel Aerospace Industries (IAI), Rafael Advanced Defence Systems Ltd and the Israeli defence attaché to convey the decision formally, sources said. The group was told that the project is being “put on hold”.


Sources indicate that the decision is as good as the closure of the JV, given the ongoing CBI probe into the Barak scandal, and the government’s efforts to ensure that the military accepts ‘Akash’, the indigenously developed medium range surface-to-air missile.


It was in July 2007 that the Cabinet Committee on Security gave the formal clearance for the largest-ever joint venture India has undertaken in the defence sector with any foreign partner. The proposed MRSAM was to be co-produced by the Defence Research and Development Organisation (DRDO) and the Air Force in partnership with the IAI and Rafael. The JV was valued at Rs 10,000 crore ($2.5 billion).


The proposed missile, a new generation Barak missile, was to have around 70-km range.  


The decision came even as the CBI is investigating alleged corruption in the first Barak deal, under which the Indian Navy bought missile defence system for its ships in 1999 for Rs 1,150 crore.  


The CBI has named former defence minister George Fernandes, then navy chief Admiral Sushil Kumar, and arms dealer Suresh Nanda among others in its FIR. Ever since the CBI filed the FIR, the government has been reluctant to deal on missiles with the IAI and has in fact not cleared a Navy proposal for buying more missiles for the original Barak system.


But it doesn’t mean that there are no other contacts with IAI. A joint venture similar to the now-stalled MRSAM is going ahead full-steam- to create a long-range surface-to-air missile (LRSAM) for the Navy. That project is at an advanced stage and government has shown no inclination to stall that JV, which was started before the CBI claimed evidence of corruption in the original Barak deal.




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