WASHINGTON DC, June 30, 2005 | ISSN: 1684-2057 | www.satribune.com

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Sagem Lowers Bid to Euro 43,500 Each Unit
or a total of $47.6 million on June 30, 2005


Army's Budding Mansurul Haq Pays Extra $21m in Hush-Hush French Deal

By M T Butt

ISLAMABAD, June 30: For the first time in Pakistan Army’s history, intimate details of a multi-million dollar weapons deal have been leaked to the media by angry middle ranking officers who point to a massive scandal which has already left the Ministry of Defence and most of the senior officers in the GHQ wondering how bold and blatant some people can get.

These officers have released all the details, including names, places, time and dates about the deal, raising a plethora of questions about the manner in which specialized defence equipment is being purchased in a blatantly roughshod manner, without any financial oversight. They say if no action was taken now, more details of many more scandals would also be made public including some personal scandals of Generals which many would not like.

According to an expert, who has studied Pakistan military purchases for years, such deals and over-payments are a very common occurrence in the Pakistan Army but what is new and different in this case is that the details have been leaked to the media for the first time while the deal is still in the process of being wrapped up.

“These officers cannot reconcile with the fact that an extra 21 million dollars are being paid to a French company in extra-ordinary haste and that too to buy inferior quality equipment already discarded by most countries, including Pakistan Army itself,” an E-Mail received by the South Asia Tribune disclosed.

The details of the deal are bizarre and the two top most Army Generals under General Musharraf are being named as the interested parties who are forcing the violation of all rules and regulations. Both are due to retire in 2007 and one of them may survive to become the Army Chief as well.

“This violation is happening in the Army Headquarter right now and can possibly be stopped if General Musharraf or the helpless politicians occupying the posts of the Defence Minister or the Prime Minister, intervene and stop these Generals from making quick money at the expense of national defence and even country’s exports,” a concerned official said.

According to the details, a quick fire, Restricted Tender was floated on June 17, 2005 by the Director General of Defence Purchases seeking to buy 900 Thermal Image Sight (TIS) Fire Control System Units (Pix Above) for the main Pakistani battle tanks – Al-Khalid and Al-Zarrar, T-85 & T-80U.

Surprisingly for such a large purchase through Tender No: 1338/49/TISight/DGDP/PC-3B Dated 17th June, 2005, only four days were given for submission of bids. June 21 was set as the last date.

This was ostensibly done because the Weapons and Equipment Directorate (W&ED) of the Army GHQ in Rawalpindi, had already pre-qualified and short-listed two French companies, through a long process of tests, trials and final technical evaluation by the ITD-Directorate and I&E Directorates in the first week of June, 2005. So both the companies were practically ready to bid.

These companies were Sagem and Thales, the first being Europe's third largest defence and security electronics company, while Thales is France's largest military company. Adnan, son of late Maj. Gen. Jamsheed Malik represents Sagem in Pakistan while Thales is represented by a Colonel Wazir and Mr Shibli from F.A. Enterprises.

The tests and trials had included draft contract proposals, including commercial and technical offers, which were sought by the W&ED on May 24 and May 26, 2005 from these two companies. Both gave their offers and both were pre-qualified/short listed by GHQ.

Then the W&ED sent the files to DGDP for final purchase contract before June 30, 2005. DGDP floated the tender asking for bids in 4 days. Both Sagem and Thales separately submitted their technical and commercial offers on June 21 in the presence of DGDP and their own representatives.

First the technical offers were opened and evaluated by the technical departments, I&E and ITD Directorates of GHQ and after two hours both were declared technically qualified with 4 technical observations made on Sagem’s offer and 35 technical observations on Thales bid.

The most significant difference in the two offers was that Sagem bid for the Generation-3 (G-3) TIS Units while Thales offered the older Generation-2 (G-2). The Tender had asked for both types although G-2 is almost obsolete.

Why were G-2 units put on the tender is a big mystery because Pakistan Army has already been using the G-3 which are mounted on Al-Khalid tanks being manufactured by Pakistan for which Islamabad and the GHQ have been trying hard to secure export orders from the Gulf, Saudi Arabia and other countries.

The angry Army officers say G-2 units were not being mounted on Al-Khalid tanks because of integration, stabilization and target identification problems. In all the demonstrations to potential foreign buyers, the GHQ has been displaying Al-Khalid tanks with G-3 units.

Side by side, the Pakistan Air Force has upgraded all the F-16, Mirage and Helicopter Gunships with G-3 units bought in 2001 or thereafter. These were purchased from Sagem in 1997. Sagem is also the main contractor in collaboration with Kamra Avionics Company. It introduced Kamra to the international export market for which General Musharraf is said to be very proud and keeps referring to.

All NATO armies and Russians are using G-3 because it is light weight, has no payload problems on air and is more reliable than G-2. In 2002 the Pakistan Army GHQ and Weapons and Equipment Directorate decided to install G-3 in all its main battle tanks.

Sagem was also offering transfer of technology which is included in the quoted price along with state-of-the-art Technical Ugradation Package to upgrade all the existing tanks from G-2 to G-3. That in itself promises a huge export market.

Thales, on the other hand, was not even a qualified supplier until early 2004 and only Sagem was in the run. Then came General Tariq Majeed, the Chief of General Staff with his background of Military Intelligence (MI). He ordered that Thales should also be included in trials and tests which continued until November last year. More trials were done in February/March this year until Thales was pre-qualified, although it was offering only G-2 Units.

The big envelopes of bids were opened on June 21, 2005 after the technical offers of both the companies were approved. Lo and Behold, Sagem had offered each G-3 TIS unit for 59,000 Euros or a total of 53.1 million Euros (US$64.5 million) for 900 units. The price of Thales was an unbelievable 78,000 for each G-2 unit or a total of 70.2 million Euros (US$85.3 million).

On Thursday June 23, 2005, Lt. Gen. Tariq Majeed, Chief of General Staff took the decision, with the knowledge of the Vice Chief of Army Staff, General Ahsan Saleem Hayat, ruling out all technical and other objections to give the contract to Thales, the highest bidder, for its inferior G-2 equipment.

His decision was given on the last day of his work as Gen Majeed proceeded the very next day on an official trip abroad.

The decision stunned many who were involved with the project. There were so many angry officers who found it unpatriotic to keep quiet. Some of them believe the use of brute authority to reward a company which did not offer competitive technology has created a big problem for General Majeed who is being likened to Admiral Mansurul Haq of Pakistan Navy, the convicted former Navy Chief who made millions in submarine purchase deals and paid off a tiny percentage to get off the hook.

The Ministry of Defence has been kept totally out of the loop in the deal. All the files were kept under control of the GS Branch headed by General Majeed. But there were other Generals heading other Directorates involved, who had to agree.

These Officers and Directorates included Director General Armored Corps, Maj. General Saeedullah Khan, DG Weapons & Equipment Directorate Maj. Gen. Ejaz Bakhshi who was assisted by Brig. Zawwar Shah. The Military Operations Directorate under Major General Yousuf and his Technical Director Brig. Khalid Asghar also had to approve the purchase. The ITD Directorate was also involved.

The angry officers of the Army say all these Generals and Brigadiers were put under severe pressure to approve the deal. “Maj General Ejaz Bakhshi was under tons of pressure, so was Major Gen. Yousuf but Technical Director Brig. Khalid Asghar was so terrorized he was almost crying, but he had obey the orders to keep his job and secure a pension,” one officer recalled.

The reason is that General Majeed is the senior most General after the current Vice Chief of Army Staff, General Ahsan Saleem Hayat, who retires in October 2007. General Majeed has the outside chance of becoming the Army Chief as he is due to retire on December 30, 2007 and could thus be a possible replacement of General Musharraf, if he is not kicked out earlier.

The Editor of the South Asia Tribune contacted the Thales company through its given Email on its web site to confirm the deal. An Email sent to 'tosasales@fr.thalesgroup.com' asked Thales whether it had finally got the contract from Pakistan Army of 900 Thermal Imagers at Euro 78,000 per unit for Pakistan’s Main Battle Tanks.

Thales was also requested to confirm whether the TIS Units were of Catherine-QW type, whether the imagers were Generation-2 or Generation-3 and whether Transfer of Technology (ToT) was also part of the contract. No response was immediately available from the company.

The decision to buy G-2 units from Thales has many implications for the Army and Pakistan as well. Firstly Pakistan will be paying an extra US$21 million to buy inferior grade technology which is being phased out by all the armies the world over, including the Pakistan Army.

Secondly by putting in these old Generation units, Pakistan is seriously going to compromise its export potential for Al-Khalid and other tanks as all buyers are looking for the latest technology when they purchase weapons at such a scale.

Thirdly after a few years Pakistan will in any case have to upgrade these tanks and install the new technology which would again cost a bundle to the Army and the country.

Why all this blatant favoritism is being done by some Generals is obvious but no one is still ready to give out a guess of what will happen to the new Admiral Mansurul Haq in the making.

What it, nevertheless, proves is that General Musharraf has turned a totally blind eye on whatever his key position holders in GHQ may be doing because he wants them to stay happy, healthy, wealthy and content and not challenge his authority as the Army Chief, although he has crossed his retirement age years ago.

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