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Tatra Scam

The document summarizes a scam involving the procurement of Tatra trucks by the Indian Army. Over many years, the Czech manufacturer Tatra was able to supply over 7,000 overpriced trucks through the public sector company BEML, despite the trucks' poor performance. A lobbyist allegedly offered the Army chief a 14 crore bribe to clear more purchases. The deal violated defense rules by involving middlemen rather than direct purchases from the manufacturer. The scam cost India hundreds of crores of rupees over decades through inflated prices, subpar trucks, and long wait times for spare parts.

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Tejash Nayak
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329 views3 pages

Tatra Scam

The document summarizes a scam involving the procurement of Tatra trucks by the Indian Army. Over many years, the Czech manufacturer Tatra was able to supply over 7,000 overpriced trucks through the public sector company BEML, despite the trucks' poor performance. A lobbyist allegedly offered the Army chief a 14 crore bribe to clear more purchases. The deal violated defense rules by involving middlemen rather than direct purchases from the manufacturer. The scam cost India hundreds of crores of rupees over decades through inflated prices, subpar trucks, and long wait times for spare parts.

Uploaded by

Tejash Nayak
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TATRA SCAM

SUBMITTED TO NIVEDITA SRIVASTAVA

SUBMITTED BY DHARMENDRA(88) TEJASH(23)

TATRA SCAM
The revelation by the Army chief, General VK Singh, of an offer of a 14-crore bribe has sharply brought into focus what was really at stake. The bribe was allegedly offered by a lobbyist for a truck supplier who flooded the Army for more than two decades with 7,000 over-priced vehicles which performed poorly when put to use. Yet, this supplier, Tatra, a Czech manufacturer, who supplies the trucks to the Army through a Defence Public Sector Undertaking Bharat Earth Movers Ltd. (BEML) was not blacklisted. In fact, the swindle worth hundreds of crores appears to have been facilitated by the governmentowned BEML which supplies the Army with trucks and other equipment. The middleman who met General Singh wanted clearance for one more batch of 1600 vehicles in September 2010. For this, the lobbyist allegedly offered 14 crores. In 2010, the government changed the rules so that different manufacturers could apply for the contract through open bidding. After nearly 25 years of a monopoly, Tatra became one of three or four contenders. Since then, the contract has not been awarded to any supplier. Tatra all-weather all-terrain trucks are used to transport missiles, artillery and troops. These trucks are manufactured in the Czech Republic. The cost to the country has been huge. A 4x4 Tatra truck, for example, costs between 40 to 50 lakhs in Europe. It was sold by BEML to the Army at nearly double that price. Ashok Leyland and Tata Motors supply similar trucks for 16-18 lakhs. Jacks for the Tatra truck, available in the market for Rs. 3000 for similar heavy vehicles, were bought for Rs. 30,000 each by BEML on behalf of the Army. The top dollar paid for the trucks wasn't matched by performance. A whistleblower named Anil Bakshi reveals that the Army has, for a while, been unhappy with the performance of the Tatra trucks. Mr Bakshi was a defence contractor for the Indian Army and was contracted to prep vehicles for the Army's use after they had been bought. In 2009, he said that 45 Tatra trucks arrived with faulty or damaged tyres and old batteries. He refused to clear them for usage. Other experts say that spare parts are not easily available for Tatra trucks. BEML takes upto two years to deliver spare parts. Instead of buying these trucks directly from the manufacturer, BEML uses a middleman named Tatra Sipox, a London-based trading company. However, government rules make it necessary for all defence equipment to be bought directly from the manufacturer. In 1986, India signed a transfer-of-technology agreement with a Czech company named Omnipol. The idea was for BEML to learn how to eventually build heavy vehicles locally. That deal continued till 1997 when BEML signed with Tatra Sipox, a London-based trading company, and not the original manufacturer of the trucks. The Czech company is the original manufacturer. In violation of defence rules, a middleman or dealer had

entered the picture. BEML never gathered the expertise to eventually build a Tatra-like truck on its own.

Ethical issues
Spirit of fair competition not observed Middle men used for access to those in power Pure pursuit of profit from companies -TATRA Profit was the main driving force no intention to serve ARMY

Measures
Democracy by governance than by coalition Precedence to fairness rather than precedent More accountability of govt departments to regulators Regulatory bodies equipped with more resources Separation of Duties and Conflict of Interest to be noted in public appointments Internal control measures from the media industry to preserve credibility

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