No scam submerged in submarine deal: govt

New Delhi, March 21 | Updated: Mar 22 2006, 05:30am hrs
Defusing NDAs attack on the Scorpene deal, defence minister Pranab Mukherjee on Tuesday categorically stated that middlemen were not involved in the multi-crore French contract.

Rejecting the Opposition charges, the defence minister told Parliament that the facts of the case were contrary to the allegations. Mr Mukherjee contended that the UPA government not only brought down the overall price by Rs 313 crore, but also signed integrity pacts with the two French firmsM/S Armaris and MBDAto ensure transparency in the deal.

In a suo moto statement in the Lok Sabha, the defence minister said the total costs of the two contracts signed for the project was Rs 7,197 crore. No contract or contracts were signed with the French firms for Rs 16,000 crore for the Scorpene project, he said.

The government did not pay an extra amount of Rs 4,500 crore than what was negotiated earlier. On the contrary, after the present government came to power, it re-examined the project even though all negotiations had been completed in 2002 and the ministry of finance had accorded approval to the project in 2003, he said.

He said the safeguards included cancellation of the contract and recovery of all advances with an interest rate that was 2% higher than the European Inter Bank offered rate .

The minister stated that the French company accused of having committed to pay commissions to the alleged middleman had denied the allegations and termed as fake and fabricated all emails published in a journal. He said the French embassy here also in a press communique termed the media reports as slanderous. The French company had filed a case in the Delhi High Court last month against the journal.

On media reports seeking to establish a link between the Scorpene project and the breach of security in the directorate of naval operations, he said a court of inquiry against Lt (Retd) Kulbhushan Parashar had found leakage of information, but it did not pertain to the submarine deal.

He said the board of inquiry convened to hold a full investigation into the matter severely indicted three naval officerscapt Kashyap Kumar, commander Vinod Kumar Jha and commander Vijyendra Rana.

It had established that there had been leakage of information to unauthorised persons. The three naval officers were dismissed from service and the CBI had been asked to undertake further investigation.