The Situation Report

14th February  1999

Air Chief keeps close tabs on purchases

By  Iqbal  Athas

Its conclusion came at the end of a home and home battle in Colombo between two organisations of the Russian Federation – Rostvertol, the supplier of the Mi-35s and Rosvoorouzheni (pronounced rosvu ru zenie), the State Armament Corporation.

Delegations from the two organisations have been locked in discussions at a five star hotel in Colombo over each other's right to enter into the Mi-35 contract with the Ministry of Defence.

In what turns out to be a direct purchase with no tenders called for, the Ministry of Defence first turned to Rostvertol for the procurement of two Mi-35s in December, last year. This came with the visit to Moscow of a three member Sri Lanka Air Force (SLAF) delegation led by Squadron Leader Ranil Ranasinghe.

This was followed last month by a two member SLAF team comprising Air Commodore Lal Perera, Director, Aeronautical Engineering and Squadron Leader, Jagath Rodrigo, Commanding Officer of Mi-24 Squadron to Moscow. They are learnt to have examined the aircraft and later recommended their acceptance. This saw the arrival in Colombo of a Rostvertol delegation on January 25. It was headed by the Director of International Business Division, A.B. Shibitov.

The team commenced negotiations for a deal that encompassed not only two Mi-35 helicopters re-conditioned at the Rostvertol's production complex, but also a comprehensive package of spare parts.

The defence establishment in Colombo has touted the Mi-35 deal as a Government to Government one. Officially Rostvertol has claimed it had no representative in Colombo for their helicopters.

However, in November, last year, Rostvertol Helicopter Production Complex ("Rostvertol" Public Limited Company) issued a "Power of Attorney" to a Colombo firm appointing them to be "the Distributor for Rostvertol Plc for the supply of spare parts and repair of Mi-24 helicopters and spares and all aviation related equipment during 1999."

This "Power of Attorney" declared that the firm concerned is "hereby authorised to represent and negotiate with any of the Security Forces/Ministry of Defence and other organisations in Sri Lanka on the subject of delivery of aviation equipment, take part in preparation and entering of contracts, effect all actions and formalities on behalf of Rostvertol Plc."

Through that "Power of Attorney", Rostvertol made it quite clear they had no agent in Sri Lanka for the Mi-35s. That gave greater credibility to the fact that the procurement of the two helicopters by Sri Lanka was a Government to Government deal.

Yet, well informed sections of Colombo's military business community spoke of a Sri Lankan third party with very powerful political connections being involved. They said this party brokered what was seemingly a direct deal with visits to Russia. However, Defence Ministry sources declined to comment on the matter except to insist that "this is a direct Government to Government transaction. We don't know of any third party."

In fact negotiations were going on in Colombo with the Rostvertol delegation on that basis. An agreement was on the verge of being signed with them, when other events began to unfold. If the assertion that the transaction itself was on a Government to Government basis, it became clear that those concerned had not done their home work. If the Government of Sri Lanka negotiated with Rostvertol, who were to re-condition and deliver the two Mi-35 helicopters, a third Russian party emerged. That was Rosvoorouzhenie, the State Armament Corporation.

The latter claimed they were the State agency to deal with in a Government to Government transaction.

A three member delegation from Rosvoorouzhenie headed by S. Anishenko, head of the Regional Department, arrived in Colombo early this week. Last Wednesday, he met Defence Secretary, Chandrananda de Silva, to stress on him the importance of his organisation. Mr Anishenko was of the view that any deal with Rostvertol could be over ridden by Rosvoorouzhenie since it was the State arm through which Government to Government transactions were channelled. Moreover, Rosvoorouzhenie had an accredited agent in Sri Lanka. Whilst Government officials pondered over the move, news reached that senior officials of Rosvoorouzhenie had close connections with the Russian leader, Boris Yeltsin and therefore wielded considerable political clout. That was whilst the delegations from Rostvertol and Rosvoorouzhenie were locked in several rounds of discussions.

It is not clear why the assistance of the Soviet Embassy in Colombo was not sought by the Ministry of Defence to check on matters. But negotiations ended on a tri-lateral note.

An agreement between the Ministry of Defence and the two organisations of the Russian Federation – Rostvertol and Rosvoorouzhenie. That has led to both parties providing guarantees on a number of matters including after sales support and warranty. In a cash strapped Russian Federation where every State organisation is vying with each other for deals, the one with Sri Lanka will undoubtedly yield some financial spin off for Rosvoorouzhenie.

Though each of the Mi-35s is estimated to cost US $ 1.2 million, the entire deal including a comprehensive spare parts package has come to over US $ 3.7 million. The spares include engines, gear boxes, rotor blades, Main Wheels and Nose Wheels.

A significant feature of the new procurements for the Sri Lanka Air Force is the fresh wind that has begun to blow. SLAF Commander, Air Marshal Jayalath Weerakkoddy, has personally taken over the task of ensuring transparency over procurements. He has also begun to closely monitor all phases of the procurement process in a clear move which demonstrates his efforts to give the SLAF a new image and to fully restore its credibility. During meetings with a three member panel that advises the Government on procurements, Air Marshal Weerakkoddy recently raised queries over some purchases for which procedures had been initiated before he assumed office.

On his recommendation, the three member Committee headed by Gen. Denis Perera (a former Army Commander), Air Vice Marshal Pathman Mendis (a former Air Force Commander) and Vice Admiral Asoka de Silva (a former Navy Commander) cancelled the deal.

Procurements by the Sri Lanka Air Force up to late 1997 have been embroiled in serious controversy with questions being raised over many transactions. There were widespread allegations of corruption. So much so, President Chandrika Bandaranaike Kumaratunga appointed a top level Committee to further probe the matter.

A press release by the Presidential Secretariat said that consequent to a report submitted to President Kumaratunga by a Committee headed by the Secretary to the Ministry of Defence, it has become necessary to "further investigate into certain alleged irregularities in the procurement of military aircraft, weapons and other equipment."

She appointed a three member Committee – Christie Silva, former Secretary to the Ministry of Health, I.M. Liyanage, former Judge of the High Court and Asoka Silva, a one time Navy Commander to "commence inquiries immediately and submit a report to the President within a period of eight weeks." The eight weeks were to take effect from April 4, 1998. More than ten months after their appointment, the Committee is continuing with its probe. The receipt of detailed representations on the terms of reference of the Committee has prompted it to seek an extension of its term. Even last week, the Committee continued its sittings. It is likely that its report will be finalised by next month.

Air Marshal Weerakkoddy and his senior staff went through the new Mi-35 deal very closely to ensure all provisions required by the SLAF were incorporated into the purchase deal. They related particularly to the full airworthiness of the two helicopters and adequate spares to ensure they are put to full operational use.

If that was the case with the two Mi-35s, another aircraft procurement deal, the acquisition of three C 130 Hercules transport aircraft from Britain's Royal Air Force (RAF) has come up for close re-scrutiny after Air Marshal Weerakkoddy declined to give a post inspection go ahead (Situation Report – January 3, 1999). This was after senior SLAF officials inspected the aircraft in London.

The result is the arrival in Colombo of a three member Royal Air Force delegation headed by Commander Paul Miller. The others are a senior representative of (RAF) Port Authority and Logistics Command (Contract Division) and a uniformed Hercules expert.

In a Government to Government deal, the Ministry of Defence procured from the Disposable Sales Agency of the Ministry of Defence in UK three C 130 Hercules transport aircraft. A fifty per cent down payment amounting to Sterling Pounds 5.6 million has been remitted by telegraphic transfer. The balance was to be paid after the aircraft were delivered. In terms of the deal, the British firm Marshals Aerospace was to effect a full overhaul of two C 130s and a minor overhaul of another. The C 130s (K Models) are said to be over 30 years old. Since it was inspected in 1997, a minor overhaul of one aircraft after the lapse of an year since inspection, caused concerns for Air Marshal Weerakkody and his senior staff. Therefore, they did not make a post inspection recommendation and sought an airworthiness guarantee from the Royal Air Force. Since, the single C 130 was being subject to a minor overhaul, a guarantee was not forthcoming unless that aircraft was also subjected to a full overhaul. That again meant an additional cost of over a million sterling pounds.Government officials and an RAF delegation are now discussing the matter. Defence Ministry sources said they would agree to a full overhaul for the remaining C – 130. A deal confirming this is likely to be concluded next week.

The three C 130 Hercules aircraft which the SLAF will receive are from a fleet of six tanking variants belonging to Royal Air Force, once employed for operations in the South Atlantic.

The RAF is taking delivery of the state of the art Hercules C 130 J models (the newest member of the Hercules family) later this year. When the new J- models are delivered, the RAF is handing over its fleet of K- models to the manufacturers of Hercules, Lockheed Martin. The tanking variants, however, were an exception and were available for sale. In terms of the deal between the MOD and the Royal Air Force, the latter has arranged to train SLAF pilots and crew in an Asian country. This is in addition to ensuring supply of spares.

British officials involved in the transaction are going out of the way to assure their Sri Lankan counterparts that there is no third party involved in this Government to Government deal. According to Sri Lanka Defence Ministry sources, at one point the deal was unexpectedly delayed after reports that a highly controversial local company dealing in military hardware had secret access to the transaction. "British authorities have assured to make available documentary proof that no middlemen are involved," the source added. This is in the form of receipts of money and to whom it went, the source explained.

Whilst the SLAF awaited the arrival of the Mi-35s, two of its Mi-24s now operational were in action last Tuesday in the Palk Straits. They were called in by the Sri Lanka Navy after they detected two LTTE boats on a logistics run from Tamil Nadu were detected by a Navy patrol. It was 6 am last Tuesday (February 9), when a routine Navy patrol, some eight miles south of the island of Delft, spotted two LTTE boats heading in the direction of Nachchikuda. Two Navy fast attack craft (FAC) moved in and engaged them. As the encounter went on, four more LTTE speed boats rushed in from Nachchikuda, a village in the north western coast (off the islands of Iranativu), where the Sea Tigers are known to have a base. It became clear that the four boats have been waiting in readiness to come to the rescue of the logistics convoy. More navy FACs joined in and a battle continued. Navy fire hit one boat which caught fire and sank whilst another was crippled. The remaining boats made a hasty retreat towards Nachchikuda.

This was when the Navy called in for Sri Lanka Air Force assistance. Two SLAF Mi-24s were at the scene in no time and began to engage the fleeing boats. Pilots reported to the SLAF Operations Room that the boats had armour plating and some of their gun fire ricocheted. Later Navy recovered one dead body.

It was only after the Navy seized the 32 foot fibre-glass boat that was crippled did they confirm that the LTTE was continuing to use Tamil Nadu to obtain not only medical but even food and fuel supplies. The two boats, each equipped with two 200 horsepower outboard motors, were carrying a full load of medical supplies. There were 2,000 saline bottles, 2,000 sterilised water bottles, 6,000 syringes, a variety of antibiotic tablets, surgical gloves, bed pans and other items. They were headed for the Sea Tiger base at Nachchikuda and were to be moved overland to LTTE bases in Mullaitivu.

Security officials have learnt that every month, LTTE boats have been ferrying medical supplies across the Palk Straits. The incident came in the backdrop of intelligence warnings that the LTTE was preparing to take some of their wounded to Tamil Nadu for medical treatment.

The intelligence warning said: "Around 35 prominent injured LTTE cadres, have been moved to Vidutaltivu in Mannar area. Whilst the LTTE is planning to transport these injured cadres in small groups by boat for medical treatment in Tamil Nadu in South India, the amassing of Sea Tigers, including Black Sea Tigers, at Vidutaltivu and Nachchikuda pose a threat to Naval craft, operating at Talaimannar and Pesalai in Mannar areas."

Increased LTTE activity, both in the Palk Straits and in Indian Ocean waters, has caused serious concern for the Government. The Government, I understand, has raised the matter at the highest levels of the Indian Government. Diplomatic contacts are under way between Colombo and New Delhi to forge joint action.

Last Tuesday's strike is easily one of the major hits for the Sri Lanka Navy. The men involved in the attack came in for praise by an elated Navy Commander, Vice Admiral Cecil Tissera. According to reports reaching Navy Headquarters, at least 25 Tiger guerrillas in cluding some senior cadres are reported to have died in the Navy attack. Intelligence officials who are assessing the medical supplies found on the logistics run confirm the LTTE is preparing itself for a major attack in the coming weeks. Giving credence to these fears are the varieties of antibiotic tablets found in the boat.

On the battlefront, the operational situation continues to be stalemated. The Government on its side appears to be consolidating its equipment and manpower resources which are badly needed to bolster any new strategies once the monsoon conditions end completely. Whether this means the continuation of the Main Supply Route (MSR) strategy or a multi option strategy, has to be seen. The LTTE, on their part, is obviously focusing on recruitment and training. 

Recent reports of merchant vessels trying to sneak into Sri Lanka waters also speculates that the LTTE are ensuring their armoury. The detection of the renewed Tamil Nadu link is an interesting feature. It bares the fact that the LTTE has revived the Tamil Nadu link.

Both sides seem to be jockeying themselves for a politico military advantage in the political game emerging both in Sri Lanka and in India, both countries due for general elections in the not too distant future.

Taraki's Column

Editorial/Opinion Contents