New Delhi, May 08, 2005 (NDTV)

Documents available with NDTV show a defence public sector unit Bharat Earth Movers Ltd (BEML) has broken guidelines to purchase trucks.

Trucks, which should have been indigenously built, are still being procured from abroad due to a breach of official guidelines.

The Tatra trucks, which form the army's lifeline in conflict situations, are used to transport tanks, vital armaments and ammunition.

But now there's documentary evidence to prove that these trucks, like hundreds others in the army, maybe just be at the heart of another dubious defence deal.

NDTV has learnt that rules and guidelines have been broken in the purchase of these trucks. The scam apparently may be traced back to 1986 when BEML entered into a transfer of technology agreement with a Czech company Omnipol.

After the bifurcation of Czechoslovakia, BEML started dealing with Tatra SIPOX, a London-based trading company and not the original manufacturer of the truck. This marked the first breach of defence procurement rules, which stipulate buying directly from manufacturers.

Technology transfer withheld

The transfer of technical know-how was the stated purpose of this deal. Over the next few years, India was hoping to manufacture these trucks indigenously.

But as the manufacturers were not part of the deal, SIPOX could not pass on any knowledge.

Nineteen years later, documents available with NDTV make it clear that Tatra SIPOX is a company which has no previous experience in defence deals.

Its balance sheets shows it has a share capital of 30,000 pounds. It has not made investments which could suggest that it handled a project worth thousands of crores. Incidentally, the company has two Indians on its board.

But the BEML chief says no rules have been broken because SIPOX belongs to the original manufacturer.

"We are dealing with the marketing subsidiary of the original manufacturer. They were meant to promote overseas sales as it was a subsidiary of the parent concern," said R S Natarajan, CMD of BEML.

The procurement has continued through the tenure of various governments and defence ministers. Only one officer has raised questions on why BEML was procuring these trucks from abroad.

Objections raised

In letters, copies of which are with NDTV, the then DDG of Equipment Branch put his objections down on paper and sent them to the Defence Attaché in Prague and BEML. The letter raised questions about:

• The original manufacturer of the Tatra Truck
• The indigenous content of the vehicle, and
• The role of Tatra SIPOX
• Within two months, the official was transferred and the letter was treated cancelled.

On its part, BEML says the indigenisation process has been slow because they didn't get the relevant technical documents from Tatra SIPOX.

That's only natural, because all along they were dealing with the wrong company.

In the meanwhile 19 years have passed, crores have been spent, but BEML at the end of it remains at best an assembling unit - when it should have been the cutting edge manufacturer of military equipment.