Situation Report

A big kill from Navy big guns
President Chandrika Bandaranaike Kumaratunga on Wednesday told armed forces chiefs the Government would not allow any fresh military procurement with immediate effect. Only the ongoing deals for which orders have been placed would be permitted in view of financial constraints. Long term needs, she said, would have to be prioritized for consideration later.

The three Commanders – Lt. Gen. Shantha Kottegoda (Army), Vice Admiral Daya Sandagiri (Navy) and Air Marshal Donald Perera (Air Force) met her at Janadipathi Mandiraya with their staff dealing with procurement matters. This was to review issues relating to armed forces procurements in the light of mounting projected needs and severe financial constraints in meeting all of them.

The Army, the largest among the security forces, had mainly focused on recurring expenditure. So has the Sri Lanka Air Force although the Tiger guerrilla acquisition of air capability had necessitated them to request for equipment needed for counter measures. But the Navy’s requirements, which even stunned the Government’s own Procurement Committee, have run into billions of dollars or rupees.

According to evidence that has unfolded before this Committee chaired by a former Defence Secretary, Chandrananda de Silva, some of the recommendations for procurement by the Navy have been made without any proper assessment of needs. Nor have such needs been weighed against the financial resources available, their suitability in terms of the existing Naval assets or its economic viability.

One such instance that clearly highlighted these serious shortcomings was the recommendation by the Chief of Defence Staff and Commander of the Navy, Vice Admiral Daya Sandagiri, to procure the British built logistics landing ship Sir Gallahad. This was repeatedly highlighted in The Sunday Times (Situation Report) in the past weeks. There were many other similar requests by the Navy that went before the Government. They highlight the scandalous state of affairs with regard to procurements. Here is another glaring example:

In 1997 the Navy purchased from Britain’s Royal Ordnance ten 30 mm Oerlikon (GCM-A/A32) guns at a cost of over Rs 703. 9 million. This is a gun used both for air defence and in surface to surface warfare. Nine units were installed on ships and one was allocated for training purposes at the gun site located at Eastern Naval Area Headquarters in Trincomalee. They were regularly rendered non operational due to frequent failures particularly in the HPTU or Hydraulic Power Transmission Unit. A ding dong battle continues to date between the Royal Ordnance and the Navy over this matter. As revealed below, documents in possession of The Sunday Times confirm this and bare many irregularities.

Notwithstanding this, the same supplier was to be awarded the contract after the Navy called for tenders in the year 2000 for the procurement of two guns with Fire Control Systems (FCS). This was for installation in SLNS Sayura, the former Indian Navy Offshore Patrol Vessel (OPV) INS Saryu. The gun (30 mm GCM- A/A32) was to come from the Royal Ordnance in Britain whilst an accompanying Fire Control System was to be obtained from Radamec Defence System also from the same country. The Fire Control System or FCS is a device that automatically detects (with the use of sensors etc) a target and directs fire at it. The total cost was to be Sterling Pounds 3,762,093 or over Rs 658,366,100. (Converted @ Rs 175 to a UK Sterling Pound).

The reason for the selection – Britain’s Royal Ordnance was the only supplier that met with the Navy’s requirement that the gun in question should fire 800 or more rounds per minute. Compared to other purchases, this benchmark left out almost all other would be suppliers. The tender had stipulated that the gun required was between 30 mm and 40 mm. There was no other supplier who could meet with the specifications to provide a gun that fired more than 800 rounds per minute. Moreover, Vice Admiral Sandagiri declared that this procurement was very urgently needed. Hence he did not want to lose any time.

Yet, a Technical Evaluation Committee (TEC) headed by Rear Admiral Vasantha Tennekoon examined this procurement but did not favour its purchase. It recommended that fresh tenders be called in view of the inability of the company to ensure the previously sold ten guns were in working order. The heavily priced guns were defective. In other words the TEC was not happy with the past performance of Royal Ordnance guns. But, Navy Commander, Vice Admiral Sandagiri wanted to procure the two weapons on the grounds that fresh tenders would further delay equipping SLNS Sayura.

He recommended this procurement first to the then United National Front (UNF) Government. A three member Cabinet Appointed Tender Board (CATB) led by Dhara Wijetilleke, Secretary, Ministry of Justice, Austin Fernando, Secretary, Ministry of Defence and S.B. Divaratne, Deputy Secretary to the Treasury studied the matter. The CATB on June 3, 2002 directed that that the Technical Evaluation Committee submits a report to them “on completion of trial test with regard to entire satisfaction of technical performance of both guns and the fire control system, especially HPT unit of the gun system for re-consideration.”The CATB warned that no financial commitment is made by the Navy against proposed trial tests.

Later, Vice Admiral Sandagiri obtained the approval of then Defence Minister, Tilak Marapana. However, Mr. Marapana had second thoughts and made sure that the deal did not go through. The Sunday Times learnt he was told by those in the know of the pitfalls if the purchase was allowed. But Vice Admiral Sandagiri did not give up his efforts though he was fully in the know the guns supplied earlier were clearly defective. Soon after the UPFA Government was voted to power, he revived efforts.
On April 11, 2003 he sent a two-page fax to the Royal Ordnance (part of British Aerospace) in Britain titled “WARRANTY REPAIRS TO GCM 30 MM GUN HPT UNITS.” This is what he said:

“1. It is re-capitulated that the SLN purchased ten 30 mm GCM guns from Royal Ordnance at a cost of Rs 703,923,230.00. From the date of installation, 04 April 1997 it was noted that the trigger unit of this gun has an inherent problem due to which it is not possible to operate the gun at their optimum efficiency.

“2. Your esteemed organisation provided support by placing an engineer in Sri Lanka, on call for two years, whereby any defects were attended by him very quickly. Further you had made a commitment to change the trigger units at the first opportunity. In fact you had made an undertaking in writing that the units will be replaced by a more efficient electro-mechanical unit in the year 2000. In the meantime your representative here was also recalled in August 2000.

Since then a deaf ear has been turned towards the many pleas that the SLN had made regarding the deficiencies of the units. As of date there are seven defective guns, which needs urgent attention. “3. (a) As per reference above at the rate you intend to carry out repairs a minimum of four months will elapse before you could complete the repairs starting today during which time SLN is unable to make use of the guns for which an investment has been made.

“(b) Further you indicate that replacement of existing trigger units by a new HPTU will begin only by the end of 2003. “4. It is informed quite regretfully that SLN has been patiently absorbing all excuses that have been forwarded by your organisation. However, instead of improving for the better, it appears that the trends and attitudes displayed by your organisation has been declining from bad to worse over the years.

“5. Hence it is very obligingly informed that it is about time that a more agreeable method be employed to find a solution to the problem, which is your own creation, and absolve the SLN from the price it has to pay for an attitude that is most unbecoming of an organisation of your founding.
“6. Unless an immediate solution is provided SLN may be reluctantly compelled to make matters known to the authorities concerned where reliance cannot be placed on your organisation.

“D.W.K. Sandagiri, VSV, USP, reds, psc, MSc (DS), FlMgt, Vice Admiral, Commander of the Navy.” The “trends and attitude” of Royal Ordnance which Vice Admiral Sandagiri complained “have been declining from bad to worse” did not change. Yet, he despatched a four member Navy team (that travelled elsewhere on official business) to Britain to examine the Royal Ordnance guns and the Radamec Fire Control System. They visited Britain on December 19 last year and returned to Colombo in early January, this year.

The team reported back to Vice Admiral Sandagiri that the defective HPTU unit in the gun has been rectified by the manufacturers. They suggested that payment for the two guns to be procured be made only after (a) the new HPT unit is to the satisfaction of the Navy, and (b) the HPT units of the existing guns that are defective are replaced with “new” HPT units.
A Navy team that conducted tests seven years earlier on the same gun were not happy. One of its members, Rear Admiral Wasantha Karannagoda, now Commander, Eastern Naval Area headquartered in Trincomalee, had this to say on March 31, 2001 in a minute in the relevant purchase file at Navy Headquarters.

“…The second time also RADAMAC and 30 mm gun have emerged as the winner but the TEC (Technical Evaluation Committee) is not happy with the system due to certain drawbacks…..

“I too agree with the views of the Chairman TEC due to the following:
a. …..a report submitted by a Board of which the present C of N (Commander of Navy – reference is to Vice Admiral Sandagiri) was the President. The paragraph 4 a(4) of the report indicate that the available 30 mm GCM guns have frequent failures.

b.The biggest problem the 30 mm GCM gun has is the frequent failure of HPT unit. The manufacturer had tried to correct this problem in June 2000, but has failed up to now.

c DNL (Director Electrical and Electronics) has sent a detailed letter indicating to manufacturer of the problems of the modified HPT unit of 30 mm GCM guns and to attend to them early, in July 2000 but they have not even bothered to reply.

Rear Admiral Karannagoda added: “Under these circumstances going for 30 mm GCM gun is a waste of money. Therefore any FCS (Fire Control System) with 30 mm GCM guns is strongly not recommended particularly in view of defects of the weapon and extremely poor after sales service…….I was a member of the team that carried out field trials of RADAMEC Fire Control System in Trincomalee in 1994. The team rejected the offer ….
“……The Director who handled this at NHQ (Navy Headquarters) had not shown the report submitted by the team that carried out trials to C of N. However, at the last minute I was able to point out the situation to C of N. Subsequently the purchase was stopped. It is such a strange co-incidence the same company RADAMEC is getting selected with a bad gun, again and again…..”

Were the recommendations of this team studied before Vice Admiral Sandagiri asked a Navy delegation travelling elsewhere to proceed to Britain? Why were the apprehensions voiced by senior Navy officers ignored in doing so? What was the need to pursue further procurement from a supplier who had provided defective guns? Only a formal inquiry will bring forth answers to these and many other puzzling questions.
Vice Admiral Sandagiri could not clinch the deal during the UNF regime. The situation became more curious after he pursued his efforts when the UPFA Government was voted to power. A new Cabinet Appointed Tender Board was named. It is headed by H.M.G.S. Palihakkara, Foreign Secretary and comprised Major General (retd.) Asoka Jayawardena, Defence Secretary and S. B. Divaratne, Deputy Secretary to the Treasury representing the Secretary. Vice Admiral Sandagiri was in attendance.

They met at the Defence Ministry on April 7, this year, and considered a letter addressed to them by Vice Admiral Sandagiri on April 5, 2005 for the supply, installation and commissioning of two medium calibre Stabilised Guns with Fire Control System. He had recommended the Royal Ordnance guns and the Radamec Fire Control System and again stressed on the urgency to procure them.

The CATB made the following observations:
“(a) CATB at its meeting held on 18-06-01 had directed the TEC to pursue the gun system offered by the following suppliers in view of the recommendation made by the Commander of the Navy, as the earmarked flag ship of SLN “SLNS Sayura” has been deployed in northern and eastern waters without a proper weapon outfit.

“1. M/s Royal Ordnance, UK – the manufacturer of the guns.
“2. M/s Radamec Defence System, UK – the manufacturer of the fire control system.
(b) Pursuant to the CATB decision on 02-06-02, the Commander/Navy has negotiated with the two manufacturers and reported in his letter dated 13.09.2004 that –
i. the defect in the HPT units of the 30 mm GCM gun has been rectified and is working satisfactory (sic). The defective HPT units of the existing guns of the SLN ships could now be replaced.

ii. with regard to trial test of Radamec fire control system, the supplier proposes that the SLN team visits a country where this system is available for the purpose of checking the performance in all aspects……….
The CATB noted “that the initial quoted price for the system was Sterling Pounds 2,632,440. The supplier has now decided to revise the initial quoted price declaring following contributory factors, which severely affected the inability to maintain the original quoted price given in December 2000. (a)

Advancement of technology in regard to HPT units and fire control systems, and (b) the inflation. Accordingly, the supplier has now offered a revised price of Sterling Pounds 3,762,093. The price difference would be Sterling Pounds 1,129,653 and it is categorically unacceptable.”
The CATB added: “Delay in progressing (sic) the tender since December 2000 could not be regarded as SLN’s inefficiency. The delay in rectifying the HPT problem is a liability by the supplier. While accepting the inability to maintain the initial quoted price over 2 – 3 years, the CATB decided to inform the Commander of the Navy that the revised price is considerably high and cannot be accepted. Therefore, a considerable price reduction is needed for further consideration of the tender.”

What did Vice Admiral Sandagiri do following the observations of the Cabinet Appointed Tender Board? Twenty two days after the CATB meeting, on April 30, 2005 he sent a fax to Royal Ordnance. He not only invited a team from the company to come to Sri Lanka but also said it could be an opportunity that could be utilised to discuss “other related issues or new products too.” That is with a company which has reportedly not honoured its commitments. Here is the full text of his fax message:
“Reference - Commander of the Navy’s letter No. DNL dated 11th April 2003.

“It is needless to mention that Sri Lanka Navy spent considerably to purchase ten 30 mm GCM guns. The weapons have been ineffective since installation due to recurrent defects in the HPT units. This matter has been reported regularly and to-date there is no permanent solution provided.

“a. Your organisation had initially made an undertaking in writing that HPTUs will be replaced in the year 2000 and then in 2003 but failed. Finally, at a presentation made on 6th September 2004 it was mentioned that HPTUs will be made available in the second quarter of 2005, for use in SLN.

“b. It is further noted that BAE (British Aerospace) systems do not respond to inquiries on spares for the said weapons either.
“Considering the above it is appreciated if any representative from your organisation could visit Sri Lanka Navy before and brief on activities intended for the immediate future regarding aspects at para two above please. The opportunity could be utilised to discuss any other related issue or new products too.”

Appearing before the CATB on April 7, 2005, Vice Admiral Sandagiri, in his efforts to obtain their approval, made clear that the HPT units of 30 mm GCM gun have been rectified. He said existing defective HPT units of guns with the Navy could now be replaced. But, neither has Royal Ordnance replaced these guns nor heeded his request to send a representative to Sri Lanka to talk with the Navy.

Instead, a four member team from the Radamac Defence Systems UK arrived in Colombo. Vice Admiral Sandagiri and five other senior officers met them on June 15 at a conference at Navy Headquarters. It is to them that Vice Admiral Sandagiri conveyed the CATB request for a lower price. A representative of the company said they could make a five per cent deduction on the total contract. Evidently the supplier of the Fire Control System was also speaking for the supplier of the guns.

Vice Admiral Sandagiri told the Radamac team there was a “mandatory requirement” to rectify the HPT units of the existing guns. He could not tell this to Royal Ordnance since no one had arrived in response to his invitation. He told the Radamec team this was to be incorporated in the new purchase agreement. As directed by the CATB, payments would not be made until the rectification is made, he told the team. That was how Sri Lanka Navy was doing procurement business. But all their deals including this sordid one have now been stopped by President Kumaratunga.

In analysing this deal a number of key issues arise. The first and most important is why Vice Admiral Sandagiri went on pressing two successive Governments during a period of five long years to purchase the two guns from Royal Ordnance on the grounds that this procurement was so urgent? Could he not have called for fresh tenders and sought a much more economical weapons system from other suppliers worldwide? Since the need to procure was on the grounds that it was urgent, why did he prolong the dialogue only with Royal Ordnance for five long years? This is when they had not even responded to his representations?

Why was he insistent for five long years that the procurement be made only from Royal Ordnance? More so, when they have defaulted on the ten guns purchased earlier by not ensuring they are in working order. It is widely known that the cost of the ten weapons was high. Why were members of the same evaluation team that accepted the guns sent on inspection missions? Why were no other senior officers who were not involved in the evaluation called upon to do so thus ensuring greater transparency? This position is further highlighted in Rear Admiral Karannagoda’s comments that a Director who handled a report relating to field trials had not shown it to the Commander.

What of the ten Royal Ordnance guns now with the Navy in the meanwhile? A signal sent to Navy Headquarters from then Commander, Eastern Naval Area, Rear Admiral Sarath Weerasekera on June 23 says it all. Rear Admiral Weerasekera is now Deputy Chief of Staff at Navy Headquarters and in this capacity responsible for intelligence, operations, hydrography, oceanography, plans and projects. He is directly responsible to the Commander. This is what his message said:

‘PRESENT STATUS OF 30 MM GCM GUNS HPT UNITS AS FOLLOWS:
“A. Operational – 04 units.
B. Semi operational – 04 units (only burst mode firing possible.
C. Non operational – 05 units.
“Availability of sufficient number of FGBs (Fast Gun Boats) for operational commitments / deployments severely affected due to above.
“Request inform principals to attend repairs early or request concurrence to open HPT units to attend possible repairs.”
Note: Though the number of GCM 30 mm guns with the Navy are ten, additional HPT units had been obtained. Even they were defective, as the signal points out.

What is the consequence of the non availability of fast gun boats equipped with weapons during a crisis situation? It places the lives of Navy officers and sailors in great peril. That is when they perform the sacred duty of defending the nation’s sovereignty and territorial integrity.
Merely halting procurements on the grounds that there is no money is not the answer. In the public interest a detailed probe is essential to ascertain why expensive, unsuitable equipment is being recommended for purchase.

This is to prevent the recurrence of malpractices in military procurements. The answer does not lie in spying on journalists or tracking down their sources. In the board rooms of the Navy Headquarters, this was what some top brass were trying to do poring over telephone bills to ascertain who spoke to whom. That certainly is not the answer as coming events will strikingly show.

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