The unloading of the Rs 14cr Tatra truck scam
Manjula Lal Tehelka.
WHEN ARMY chief VK Singh talked about being offered a bribe so that the Indian Army bought Tatra trucks, the brandname was perhaps unknown to the civilian world. It sounded so much like Tata, the other truck behemoth, that the public might have thought it was an Indian company.
Tatra Trucks, a Czech firm, is a big name worldwide for all-terrain vehicles. It has specialised trucks for purposes of construction, mining, oil and gas tankers, forest logging and even firefighting. A whole chain of collaborations enables it to operate in countries like India, beating other global competitors.
On March 18, 2010, the defence ministry had ordered 788 Tatra vehicles from Bharat Earth Movers Ltd (BEML), a Bengaluru-based public sector company that has a collaboration with Tatra Vectra Motors Ltd (TVML) to produce variants of the Tatra vehicle in India. The order was worth Rs 632 crore ($141 million) and delivery time was 18 months.
But this was just one order. It turns out that the army, starting in 1986, has bought 7,000 Tatra trucks till now.
It seems unlikely that the truck was ‘sub-standard’, considering its lineage – an allegation that defence ministry officials are now refuting. There may have been a problem with availability of spare parts and service, which was handled by BEML. But in competitive bidding, especially when huge defence contracts are involved, it is quite likely that bribes are offered to seal the deal. That is why the Rajiv Gandhi government banned middlemen, only to have allegations thrown at them of kickbacks being paid for the Bofors gun deal. The gun itself was found to be unexceptional.
Tatra Trucks is not operating directly in India — it has a joint venture with UK-based Vectra, which boasts of operations mainly in India and East Europe. Besides heavy duty trucks, Vectra is known for its helicopters. Both these engineering giants sell worldwide.
In 2009, the Czech company had tied up with Russian firm Kamaz Inc (which also has ties with Vectra) and applied in India for homologation, the roadworthiness test. That year, Hino Motors of the Toyota Group was also exploring the possibility of selling trucks in India, and had started roadshows for potential customers. It ended up establishing a joint venture with Marubeni Corporation for selling Hino vehicles, including buses, in India.
Kamaz Inc, which was already selling its products to the Indian Army but in a smaller way, was a state-owned corporation set up in 1969 at a time when the USSR believed in centralised, large-scale production.The first Kamaz rolled out in February 1976. Although Kamaz was meant to produce supersized cars, it also brought out the midget city car Oka in 1987. Kamaz trucks, incidentally, are no pushovers — they won the Dakar Rally a record 10 times till 2011. The last rally rolled across South America, and registrations are now open for 2013, if you have a truck to race.
Manjula Lal is Senior Editor, Tehelka.