Situation Report

Where the war was not won, but wealth was
Corruption in military purchases now cripples the crutches

Chief of Defence Staff and Commander of the Sri Lanka Navy Vice Admiral Daya Sandagiri was the chief guest at the finals of the Army inter regiment drill and band competition at their grounds on Friday. Army photo

The near two decades of war between the armed forces of Sri Lanka and Tiger guerrillas left behind many a legacy. The most important among them has been greater militarization. Strengths of armed forces and even the Police multiplied to unprecedented levels. Together their accumulated total countrywide was nearly 250,000. The Tiger guerrillas, even at the peak of confrontation in the North and East, never exceeded 20,000 cadres.

Accompanying this growth in numbers was another important factor - the acquisition of a variety of military equipment. If the upkeep of the swelling ranks cast a severe strain on the country's economy, the acquisition of military hardware only went to exacerbate it further. Every Sri Lankan had to bear the burden through direct and indirect forms of taxes.

Added to that are the threats they are exposed to from mounting incidence of grave crime. No longer were such activity carried out with Shot Guns, Kris knives and clubs. Replacing them are assault rifles, automatic pistols and grenades - all procured for war. This process saw the beginning of the proliferation of small arms in Sri Lanka. Paradoxical enough, the deserters who used them were also trained by the State. That has altogether spawned a new crisis.

During what is euphemistically called Eelam War 11 - the phase that began in 1995 with the launch of Operation Riviresa - to re-capture the Jaffna peninsula from Tiger guerrilla control, millions of dollars or billions of rupees were poured in for procurements. Tender and other evaluation procedures were relaxed. They were branded as "crisis purchases." But not all the equipment was worth the money that was spent. It only made some in uniform and others outside it very rich.

In the Army, for example, radars worth millions of rupees did not function, some varieties of ammunition were found to be dud. Body armour meant to save lives of soldiers was of such poor quality that bullets could penetrate easily. In the Navy a Hovercraft purchased at a cost of a million Sterling Pounds (now over Rs 160 million) has become a museum piece. Old Fast Missile Vessels (FMV) lay idle for want of engine replacements. Thus the available stock of missiles may become hazardous for use. A submarine chaser is idler than in use. Under water detection systems were ineffective. The Air Force ended up with helicopter gun-ships that could not fly. Laser guided weapons systems procured at great cost were left to idle. At least one of two C-130 Hercules troop transport aircraft has remained more on ground. One had to be stripped to obtain spares to keep the other airworthy.

These are just a few examples from a lengthy catalogue. Successive governments did not think it fit to conduct a study to ascertain where things went wrong. Not despite the fact that vast sums of money squandered would have been enough to fund much needed development projects. As a result some of the millionaires born out of this process escaped with their ill gotten wealth with little or no scrutiny.

The others, as revealed in these columns last week, are being investigated by the Commission to Probe Allegations of Bribery or Corruption. When legal action against them materialise, the public will no doubt have a glimpse of how comfortably some of them won their wealth even if the war was not won.

One would have thought the military establishment was wiser by the experience. But the cycle seems to be repeating itself. An example which clearly illustrates the situation occurred recently. The Army floated tenders to procure crutches for wounded soldiers under their care. When they were opened, it came to light that suppliers were able to provide them at a little over Rs 1700. An officer involved in the procurement process asked a colleague to go in civvies to one of the bidders and inquire about the local selling price. It came to light that the identical product was available for Rs 570.

The mark up, three times the original price, an Army source who spoke on grounds of anonymity said, was to provide for kickbacks to those who helped. Like in the case of crutches, such high mark ups are all too common says the source. Here again there is a paradox. On the one hand, funds from State coffers are paid out at unconscionable rates. On the other, members of the Army's Seva Vanitha are forced to take to the streets with till in hand to ask for public contributions for the welfare of soldiers. A case of the tax payer's money being channelled for procurements and the poor man's coins, at a time when they are hit by the soaring cost of living, into the tills.

But a study of the procurement needs of the armed forces for the coming year seems to have become a turning point. The Sunday Times (Situation Report - October 10) revealed how the National Security Council (NSC) at its sessions on October 5 examined the procurement needs of the Army. As reported in these columns, a moment of shock came when the NSC was told that the Army needed 98 Main Battle Tanks phased over a period of five years.

These Czech built T - 72 MBTs are estimated to cost more than Rs 100 million each and the total cost would have been a staggering over two billion rupees. In terms of this request, at least an average of 19 tanks per month would have cost Rs 1.9 billion. This is besides a catalogue of other items that would have cost billions of rupees more. President Kumaratunga who chaired the meeting requested the Army top brass to review their list and make a fresh presentation taking into consideration the economic situation in the country. Evidently the Army hierarchy has not properly appreciated threat perceptions taking into consideration the ceasefire, the ongoing peace process and the resources now available.

She has not stopped at that. President Kumaratunga has now appointed a four member Committee to review existing military procurement procedures. It is headed by one time Defence Secretary Chandrananda de Silva and comprises Rear Admiral (retired) Basil Gunasekera, a former Commander of the Navy, Air Vice Marshal (retired) Paddy Mendis, a former Commander of the Air Force and Chandra Wickremasinghe, a one time Sri Lanka Ambassador to France.

From November 1, this Committee has been studying existing procurement procedures in the Army, Navy and Air Force. They have been told to report to President Kumaratunga within three months on the changes that are necessary and how the procurement mechanism could be centralised for optimum efficiency.

The Government is likely to bring military procurements under the purview of a new National Procurement Agency (NPA). The Cabinet decided recently to set up a National Procurement Agency that will function in liaison with the Procurement Support Bureau of the Department of Public Finance in the Treasury. This agency is to be tasked with the responsibility of procuring goods and services for the Government besides issuing guidelines for tender procedures.

The office of the NPA will be on 17th floor of the West Tower at the World Trade Centre in Fort. Until such time the work of the NPA becomes fully operational, the existing Cabinet Appointed Tender Boards (CATB) and the Cabinet Appointed Negotiating Committees will continue.

A United States Pacific Command assessment of the armed forces of Sri Lanka declared that the procurement process in the armed forces was inefficient. Their study noted: The procurement process used throughout the SLM (Sri Lanka Military) needs review and revision. The process is cumbersome, slow and full of bureaucratic requirements that reduce the process to a state of ineffectiveness, and does not provide the flexibility needed to execute efficient procurement actions in a timely manner.

"Procurement decisions by the SLM are primarily based on the 'lowest bidder' concept. Though criteria/specifications are normally established for desired items prior to opening them up for tender, the criteria are often so broad that from year to year, a myriad of different manufacturers may be capable of meeting the prescribed specifications. Thus, over time, the number of makes and models of equipment used by the SLM has significantly increased the variety of equipment currently used by the SLM, resulting in a lack of standardisation within equipment that prevent economies of scale and create second and third order effects that impact equipment readiness rates, service life and capabilities.

"Additionally, the current procurement procedures required by the SLM in order to procure equipment and spares is bureaucratic, and inefficient. In order for needed spares or other items available in the SLM's supply system to be procured, requesting activities must use the same tender process that is used for the procurement of major items. This process calls for bids to be taken for at least 21 days before a contract can be awarded.

"The mandatory tender period, when combined with the administrative process used to process the request prior to announcement of the tender and the order ship time from foreign manufacturers can result in a three month to one year lag time in receiving spares and equipment. As a result of the SLM's current procurement procedures, equipment often awaits repair for extraordinary long periods of time and accumulate additional shortfalls that result from lack of use and cannibalisation."

The visit of the Pacific Command assessment team followed a meeting then Prime Minister, Ranil Wickremesinghe had with US President George W. Bush in Washington in July, 2002. The United States offered assistance to Sri Lanka to assess various elements of the country's national security and economic establishments. The Department of Defence was tasked to assist the Sri Lankan Military to assess a broad range of issues, including operations, doctrine, procurement, training and Professional Military Education.

In respect of procurements, the Pacific Command report recommended that: "The SLM must move toward a decentralized procurement system where certain category of items, with prescribed costs, can be procured by major subordinate logistics elements without specific approval from the service component level. Additionally, the full tender process should be waived for these items in order to reduce time needed to obtain critical spares and equipment.

"The decentralisation of procurement actions and lessening of controls related to the tender process will provide significant benefits to logistics personnel throughout the system and will improve readiness and responsiveness in key logistics areas such as equipment maintenance and spares availability."

In the wake of the UPFA Government's first budget later this month, the Appropriation Bill presented to Parliament by Finance Minister, Sarath Amunugama, reflected a rise in the defence budget to Rs 56 billion from last year's Rs 43 billion. Though this led to speculation of more military procurements, the Rs 13 billion increase reflected a rapidly declining rupee to the US dollar and an official inflation rate of 11.6 %.

Since the ceasefire successive Governments have down played the need for military procurements or to embark on new plans to ensure enhanced military preparedness. The previous United National Front (UNF) Government only replenished dwindling stocks of ammunition.

However, besides the Army, both the Navy and the Air Force have also placed their fresh requirements before the UPFA Government. The Navy is seeking Fast Attack Craft, guns for its existing FACs and radar among its requirements. The Sri Lanka Air Force is negotiating with the British Ministry of Defence to procure another Hercules C-130 transport aircraft. This aircraft had earlier been used by the Royal Air Force for meteorological purposes. A British firm is to re-fit this aircraft including advanced avionics for troop transport. The SLAF has two C-130s, former tanker versions, converted by the same British company. One is now undergoing overhaul in Jordan while the other is grounded for repairs. The SLAF has also sought transport helicopters.

Though late, President Kumaratunga's decision to streamline military procurement procedures is still salutary. The current "no war, no peace" situation underscores the necessity. The defence establishment cannot altogether ignore military preparedness. Sadly, this is the case today. Only the Liberation Tigers of Tamil Eelam (LTTE) seems to be alive to this reality. They have used the period of the ceasefire to recruit, train and re-equip. They have thus built a much stronger military machine than the one that existed before the ceasefire.

These developments come in the backdrop of the Ceasefire Agreement of February 22, 2002, coming under severe strain. According to Jayantha Dhanapala, Secretary General of the Secretariat Co-ordinating the Peace Process (SCOPP), "cumulatively the record of violations ruled by the Nordic staffed SLMM (as at September 30) against the LTTE stands at 2,491 while the number of violations by the Government of Sri Lanka totals 113." In other words for every single violation on the part of the Government, there are nearly 23 by the LTTE.

Mr. Dhanapala told The Sunday Times "This reveals not only a wide disparity in numbers but also in the nature of the violations which in the case of the LTTE include political assassinations, torture, child recruitment and abductions while in the case of the Government violations, regrettable as they may be, are mainly in respect of harassment of civilians at checkpoints."

Mr Dhanapala added "Significantly, the highest number of violations by the LTTE has been in the Eastern district of Batticaloa totalling 690 violations since the casefire came into force. Fifty per cent of the violations in the district are of child recruitment and more recently there have been an increasing number of political killings by the LTTE. These cases are currently under investigation by the Sri Lanka Monitoring Mission."

"Notwithstanding this, the Ceasefire Agreement," Mr. Dhanapala says "is holding up well with the support of the SLMM who has also devised ancillary confidence-building arrangements. These must be implemented in letter and in spirit." But despite the pious pronouncements of the SLMM Head, retired Norwegian Major General Trond Furuhovde, the widening disparity in ceasefire violations by Tiger guerrillas continues.

Though more suave than his predecessor, Maj. Gen. (retd.) Tryggve Teleffsen, neither the SLMM boss who is serving a second stint nor his organisation has so far been successful, as ceasefire monitors, to see a halt to the Tiger guerrilla spree of assassinations. If they say that it is not part of their mission then the question is one of whose responsibility it is? How does one explain the large number of LTTE ceasefire violations? The SLMM head and his organisation have only been successful in issuing comforting statements to the Sri Lankan public most of who have begun to question his as well as the Mission’s dwindling credibility. As one senior serving Army officer in an operational area declared, "they (the SLMM) have been successful in only explaining to the public why they should not be blamed. The time has come for them to play a more proactive and assertive role instead of saying sweet nothings."

Daily incident reports from the Joint Operations Headquarters (JOH) to the SCOPP speak of an average of one to two reported ceasefire violations by the LTTE in the Eastern Province. A SCOPP official said they were regularly in touch with the Monitoring Mission with regard to these complaints.

Once again, efforts to revive the peace process at summit level get under way in the coming week. Due in Colombo is Norwegian Foreign Minister, Jan Petersen, leading a high powered delegation. He will meet both President Kumaratunga and LTTE leader, Velupillai Prabhkaran. On hand to help Mr. Prabhakaran will be Chief Negotiator and his close advisor, Anton Balasingham. He is due in Colombo on Tuesday and is expected to fly in a Sri Lanka Air Force helicopter to Kilinochchi.

Besides taking the peace process forward, as already declared, Mr Petersen is to talk to both sides about the need to ensure the Ceasefire Agreement is upheld. It would not be a bad idea for Mr. Petersen to also remind the SLMM boss, Maj. Gen. (retd.) Furuhovde about this. Perhaps that may help the one time Norwegian soldier not only polish up his seemingly superb public relations but not give up a second time in disgust.

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