India halts Barak I missile purchase

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NEW DELHI, Aug. 30 (UPI) -- India has put on hold procurement of 262 Israeli-made Barak I missiles until the Central Bureau of Investigation finishes a report into possible corruption.

The navy wants the missiles for its anti-missile defense systems on 14 frontline warships, including the country's aircraft carrier Viraat and three new Shivalik class stealth frigates, a report by The Economic Times said.

The Indian Ministry of Defense has called the $140 million purchase of the short-range surface-to-air missiles as having "critical operational urgency."

Navy chief Adm. Sureesh Mehta told the Times of India in 2008 that he hoped the CBI investigation wouldn't get in the way of buying more much-needed Barak I missiles.

However, the Defense Ministry indicated last week that its hands were tied because of the CBI investigation into an alleged Barak kickbacks scheme, unnamed sources told The Economic Times.

The CBI is the government's main anti-corruption investigation agency.

"Legal opinion obtained from the law ministry and the solicitor general holds that the fresh procurement case should not be progressed for the cabinet committee on security till the CBI probe is complete," said a source.

An end to the CBI's investigation doesn't appear anywhere in sight, after an initial six years, The Economic Times reported. Things are getting serious for the navy, which has cut back on practice firings of the Barak I AMD systems to save its stockpile of missiles.

In August 2007 The Times of India reported the CBI told Supreme Court it has unearthed payment of around $10.6 million in alleged kickbacks to Baccano Holdings Inc. in the United Kingdom.

The payments appeared to be part of the Barak missile deal signed between India and an Israeli firm in 2001, reported The Times of India. Baccano is believed owned by arms dealer Vipin Khanna.

CBI had registered a First Information Report -- the initial step for setting up a formal investigation -- in 2006, The Times of India said.

The FIR named former Defense Minister George Fernandes, former Samata Party President Jaya Jaitly, former Samata Party Treasurer R. K. Jain and former Navy chief Sushil Kumar in connection with irregularities in the deal for seven Barak-I Anti-Missile Defense systems and 200 missiles.

The deal with Israel Aerospace Industries and Rafael Advanced Defense Systems was worth $268.6 million.

The Barak I has a short response time, an anti-sea skimmer capability and a 360-degree aim flexibility on its vertical launch system. It also has a 6-mile maximum range against air targets, information from IAI says.