Last Minute Phone Call on SAT Report, Saves Army $37M Loss
M T Butt
July 3: General Pervez Musharraf intervened just 7 minutes before
the signing of the final contract between Pakistan Army and the
French Company, Thales, on the night of June 30, to stop what
would have been a straight loss of over 37 million dollars to
24 hours of the South Asia Tribune report that top Generals
of the Pakistan Army had decided to award a Thermal Imaging Units
(TIS) contract for Al-Khalid tanks to Thales, despite the French
company had offered a higher bid for low quality equipment, so
much pressure built up that Musharraf had to personally call the
GHQ late at night, just minutes before the signing ceremony, to
stop the deal.
revealed that the Tender floated on June 17, 2005 had now been
cancelled and within two months a new Tender would be floated
in which new bids would be invited.
Army officers had revealed all the details of the on-going scandal
to the South Asia Tribune in a bid to stop the award
of the contract for 900 Thermal Imaging Units sought by the GHQ
through a restricted tender on June 17. Only two companies, both
French, were pre-qualified to bid and Sagem had offered a price
of 59,000 Euros per unit for latest technology units while Thales
had bid 78,000 Euros for Generation-2 technology. Click
to Read earlier story
Chief of General Staff of the Army, General Tariq Majeed, had
ordered that the contract be awarded to the highest bidder to
buy obsolete technology and many GHQ officers were angry at the
decision. For the first time some of them picked up the courage
to leak the entire scam to the media to save the image of the
Majeed had left Pakistan after issuing the orders that the contract
be signed with Thales and June 30 was the last date for signing
the meantime, Sagem, the losing bidder, made another cut in its
price and brought it further down by Euro 16,000 per unit from
59,000 to 43,000 or raising the difference between with the price
offered by Thales to Euro 34,500. That would have meant that for
900 units Pakistan would have paid over US$37 million more.
insiders kept a tab on the developments on June 30 and informed
the South Asia Tribune that the final signing ceremony
had been decided to be held at 22 hours or 10 pm at the GHQ. The
whole day documents were being prepared for the final award.
at exactly 9.53 pm, the telephone rang and General Musharraf was
on the line. He ordered the Defence Production officials ready
to ink the contract to call off the deal. Within a few minutes
the entire room was empty and the Pakistan Army saved some $37
million,” one officer reported after watching the scene.
next day on July 1, the Director General of Defence Production
declared Thales as a “Defaulting Company” because
some years back it had not fulfilled its contractual obligations
on the submarines deal, the officers revealed on July 1.
was an amazing success for the officers who had leaked the whole
scandal just in time to save the damage. But details of what happened
on June 30, specially in the evening are startling.
to one version Lt. Gen. (Retd) Tariq Wasim Ghazi, who was appointed
Secretary of the Ministry of Defence after he was superceded and
retired by Gen. Musharraf, when he appointed Lt. General Ahsan
Saleem Hayat as Vice Army Chief, moved in quickly on June 30 to
intervene and declare Thales as a Defaulter.
Ghazi spoke directly to Musharraf and briefed him about the details
of the case as well as the past performance of Thales and other
companies which had merged into Thales, and asked him to stop
the deal before it was signed," said an insider.
the view of an expert: "Gen. Ghazi was trying to get even
with the junior officer (Gen. Ahsan) who superceded him by not
allowing him to make easy millions. Gen. Ghazi was the fittest
candidate to become the Vice Army Chief but he was bypassed."
episode also reveals that the authority of the Vice Chief and
Chief of General Staff has now been challenged by a retired General
who is still close to General Musharraf. "This grouping on
a matter involving corruption of 35 or 40 million dollars is a
much more serious development," the defence expert said.
all eyes are now on Thales as it is a major French exporter of
sophisticated war equipment to the world and disqualifying it
as a Defaulter means Pakistan is asking for a lot of legal and
financial trouble. Thales has already signed two earlier contracts
this year and what happens to those is not clear yet.
expert on defence purchases disclosed to the South Asia Tribune
that Thales was actually a new company set up in 2000 after merger
of several French companies including Thomson-CSF which had been
supplying Pakistan with a lot of weaponry for years.
is just possible that one of the many companies which merged into
Thales or were acquired by it in corporate takeover had some history
of not meeting its contractual obligations with Pakistan which
was now being used by Pakistan not to award it the TIS units contract,”
the expert said.
cancellation of the Tender has given rise to many questions now
that the damage has been controlled, the expert said. “General
Musharraf should now start an investigation as to how and why
a Defaulter Company had been pre-qualified, why the higher bid
with inferior technology had been accepted and which senior officers
were involved in the scam.”
the expert said, there is also a possibility that instead of the
senior officers who pushed the deal, an inquiry may be launched
to find out who leaked the details to the media and some scapegoats
may be hunted to appease the Generals who apparently lost their
big chance to make a few million dollars on the side.
South Asia Tribune tried to get the official version
of Thales on the latest developments but Emails sent to their
Press contacts remained unanswered. Thales was asked to confirm
whether Pakistan Army had declared it as a “Defaulter”
Company and the said contract which was due to be finalized on
June 30, 2005 had been canceled.