Rahul’s Rafale’s Fiasco by Pavithran
Rahul’s
so-called spirited speech culminating with awkward hug and sarcastic wink
followed by nauseating smile in the floor of august Parliament House on the ‘No
Confidence Motion’ against Modi Government moved by Chandra Babu Naidu’s Telugu
Desam Party for not giving a special status for Andhra Pradesh was most hollow
and devoid of substance and seriousness to attract our attention and response.
But Lutyens
Medias and their lobbies had hailed Rahul for his performance sky high without
going into details or caring in for an in-depth scrutiny of his theatric
utterances.
It was
another matter that Rahul had not spoken even a single word about his party’s
stand on awarding special status to Andhra Pradesh for which Parliament was
assembled to discuss and then to vote on No Confidence Motion. No Confidence
Motion was however defeated with 325 voting against the motion and 126
supporting.
Further
Rahul allegations and accusations in the Lok Sabha were mainly confined to
purchase of 36 Rafale Jets by Modi Government and these are not anything new,
as these were of what Rahul was saying during Gujarat and Karnataka election
meetings repeatedly and through his various tweets spread over a period of
time. These were also equally answered by various sources apart from the BJP
Ministers and spokespersons in various forums.
As Rahul had
again raised this issue of 36 Rafale Jets purchase in Parliament, it becomes
incumbent on us to take note of his allegations and to analyse in detail afresh
to know whether Rahul’s charge of Rafale Jets’ Purchase by Modi Government
‘smells like a scam’ is anywhere even remotely having any truth in it. Rahul,
due to fear or failure inspite of privileges of protection as Parliament MP,
had not the courage to say directly in the Parliament that ‘Rafale Deal of Modi
is scam deal’
Now, let us
list out Rahul and also Congress Spokesperson charges in the purchase of 36
Rafale Jets by Modi Government.
1.
The
price per jet during the UPA regime was 520 crore, but was increased with magic
powers to 1600 crore, when the PM went to France and sealed the contract. The
cost of each aircraft is three times more than what the previous UPA had
negotiated with France in 2012.
2.
There
is no agreement preventing Government of India in disclosing the price and
other details of the contract and Modi Government is taking shelter under the
secrecy clause to avoid exposure of its scam in the deal. Rahul said: “I
personally met the French president and asked him if there is such a pact
between the French and Indian governments. The French president told me that
there is no such pact between the French and Indian governments. This is the
truth, and he told me that I have no objection to for the details of Rafale
deal being made public, you can tell it to entire India.”
3.
36
number ‘ready to fly’ fighters purchased instead of trying to acquire
technology from Dassault Aviation and make it in India. Hence, this purchase
instead of making them in India is a negation of policy shift of Modi’s pet
project of ‘Make In India’ and hence it was one of the biggest failures of the
Make-in-India Programme.
4.
50%
offset clause – (which means that 50% of the final sales price will have to be
spent in India) –(Here offset amount comes to around 30,000 crore) was made
beneficial to Anil Ambani’s company. The lion’s share of the Rafale offset was
cornered by Anil Ambani’s company, Reliance Aerostructure, formed as a joint
venture between Dassault and Reliance Group. This was a clear case of PM’s
favouring Anil Ambani’s company to get Rafale contract in Offset Clause.
5.
Major
share of 50% offset clause should have been allotted to the public sector unit,
Hindustan Aeronautics Limited, but, Anil Ambani’s recently started company got
the contract. Anil Ambani’s company did not have the previous experience in the
manufacture of jet planes like Hindustan Aeronautics Limited. Hence, it is a
clear case of Modi government promoting crony capitalist friends who might have
funded his political marketing campaign leading to a huge scam in Rafale
fighter jets deal. Apart from offset contract, Life Cycle contract of rs.1 lac
crore over five decades to maintain the aircraft is to be paid to Anil Ambani’s
company.
6.
Rafale
sold same 48 aircrafts to Egypt and Qatar in 2015 for rs.1319.80 crore per
aircraft then why did India pay rs.1670.70 per Rafale aircraft?
In short,
Rahul’s points of allegations can be summarized as under:
High price
per jet plane as compared to UPA deal,
Non disclosures
of price per jet and other details,
Favoritism
shown to Anil Ambani venture in 50% offset clause in lieu of Hindustan
Aeronautics Limited and
Price of
Rafale’s sale of Jets to Qatar and Egypt was lower compared to sale price of
jets to India.
Before
answering point by point of Rahul’s allegations against Rafale Jet deal by NDA
Modi Government, it is very much necessary to dwell upon the past history in
Rafale deal, as it was originally a Congress deal started in 2007 and dragged
on till 2014 without finalizing the contract – thereby our Indian Air Force’s
fleet was made to suffer with inadequate jet planes.
Such delays
in acquisition of defence equipments by the previous UPA Government are
unpardonable and Rahul even on this count loses his moral right to question
Modi Government as they had clinched the deal in record time and with favorable
terms to replenish the fleet of IAF Jet Planes. Even now, first consignment of
Rafale Jet will be delivered only in September 2019.
The steps to
acquire 126 Medium Multi Role Combat Aircraft (NMRCA) for the Indian Air Force
began in 2007 by the UPA government and in 2010 only, IAF shortlisted two
aircrafts – the Eurofighter Typhoon and the Rafale aircraft of Dassault
Aviation (DA). Then UPA Defence Minister AK Anthony had taken his sweet time
even to choose Rafale aircraft over the Eurofighter Typhoon and Modi here also
had no choice left – as otherwise cancellation might end in heavy penalties
etc.
Purchase of
Rafale jet planes was approved by then Defence Minister AK Antony in 2011 –
taking a full one year. Next two years, certain aspects related to License
Manufacture of 108 aircraft in India with HAL (out of 126 - 18 jet planes as
ready to fly type and 108 to be manufactured in India) could not be settled.
While
Dassault Aviation fixed 31 million man hours sufficient to produce 108 Rafale
aircraft in India, HAL on the other hand was asking for more hours – 2.7 times
more. This became the major bone of contention between the HAL and the French
manufacturer. The UPA could not close a deal because the negotiation was stuck
on the offset clause.
Dassault was
not ready to do business with HAL, as it thought its reputation would suffer by
partnering with HAL. Tmothy Roemer, the then US ambassador to New Delhi, in 2010
wrote about HAL that its potential to ‘successfully partner with US firms on a
truly advanced aircraft remains untested and suspect’ because India’s aviation
industry was ‘two to three decades’ behind the West’s.
After Modi
Government took charge, Ministry of Defence Officials wanted to break the
deadlock as soon as possible since the IAF’s fleet of fighter aircraft was
depleting alarmingly. In the background
of Dassault-HAL mistrust, looming liability issues that Dassault flagged for
the 108 aircraft supposed to be built in India, and rising life cycle costs for
the aircraft, it was threatening to become one of those famous defence
quagmires – courtesy UPA government. India was not only in danger of not
getting the Rafale but not getting anything else either because nobody would be
actually scrap the deal without incurring penalties – not to speak on the
impact on India-France relations.
Hence, the
best course was to buy a minimum number of Rafale jets off the shelf to fill a
critical gap in the IAF’s inventory and the Cabinet Committee on Security (CCS)
gave its approval to the new proposal of acquiring 36 Rafale before Modi left
for Paril on April 9, 2015.
Once the
in-principle decision was taken and after a hard bargain of around 15 months,
India finally signed the contract in 23rd September 2016 for the
purchase of 36 jets. The contract was Government to Government and not
Government to private French Company as in the case of UPA Rafale Deal. The
final negotiated price for 36 Rafale package, along with initial consignment of
weapons, Performance-based Logistics (PBL), simulators along with annual
maintenance and associated equipment and services was fixed at 7890 million
Euros.
The average
unit cost of Rafale aircraft thus turned out to be 91.7 million Euros (going by
the Euro-to rupee coversion rate at the time of signing the contract), it meant
each aircraft would cost Rs.688.30 crore and not Rs.1500 or Rs.1700 crore as
quoted by some analysts.
It is very
much relevant to quote: Under the scrapped NMRCA – UPA deal – the French were
asking for anything between 100 and 110 million Euros per aircraft and that too
without India-specific enhancements.
The lowest
price apart, the Rafales for IAF will have 13 India-Specific Enhancement (ISE)
capabilities which are not present in the Rafale aircraft being operated by
other countries. These enhancements will provide a significant capability edge
to the IAF over India’s adversaries.
With this background information, let us now deal with
Rahul’s allegations one by one.
Point No.1: High Price per jet
compared to UPA deal:
First of all UPA had not entered into any contract or
had not finalized the price – stagnated in the discussion level. Further UPA
deal is between Government to Private party whereas Modi Government’s deal was
Government to Government – G2G and hence it is very dangerous to say that
‘there was scam in price fixation’, as such a statement would tantamount to
accuse apart from Modi inadvertently bringing French President as corrupt.
Nearly one-
and-half years after Prime Minister Narendra Modi announced the proposal during
a visit to Paris, finally in September 2016 after detailed negotiations between
the two Governments, India signed an inter-governmental agreement (IGA) with
France, dubbed as "Rafale deal", in which India will pay
about Rs. 58,000 crore or 7.8 billion Euros for 36 off-the-shelf
Dassault Rafale fighters. About 15 per cent of this cost is being paid in
advance. As per the deal, India will also get spares and weaponry, including
the Meteor missile, considered among the most advanced in the world.
Additionally, an accompanying offset clause was sealed through which France will invest 30 per cent of the 7.8
billion Euros in India's military aeronautics-related research programmes and
20 per cent into local production of Rafale components.
Kindly
see the slide above. Total cost of 126 Rafale jets were negotiated by UPA on various
dates are as under:
2011-
$10.4 billion
2013-
$ 15 billion
2014
- $30 billion (Rs.1583 crore per jet)
In
2 years from 2011 to 2013, increase in price was around $5 billion and in one
year from 2013 to 2014, it was double - $15 billion. As there was no
finalization of deal price, only Rahul or AK Anthony should calculate and
furnish Rafale proposed total cost in September 2016 to compare with Modi
Government’s Rafale Price Deal!
It was
revealed that under the scrapped NMRCA – UPA deal – the French company was
asking for anything between 100 and 110 million Euros per aircraft and that too
without India-specific enhancements!
With
improved version of Jet – Stock of Meteor Missile and Scalp Missile with
maintenance and spare parts for 5 years at no extra cost, the price per jet is
only Rs.1611 crore, while UPA deal at January 2014 cost is Rs.1585 crore per
jet – increase of Rs.26 crore only. Amount of Rs.1585 crore after 2 years will
be definitely more than Rs.1611 crore and the increase of Rs.26 crore will be
wiped out!
Further,
in any deal and particularly in Defence purchases, one should not go by only
price criteria – as quality, compatibility and latest technology loaded
equipment should be taken into account.
Even
here, Modi Government had got a very good price compared to UPA.
Average cost per unit with enhancements UPA –
Rs.1705/-
Average cost per unit with enhancement NDA - Rs.
1646/-
According to NDA deal, India is to get 28
single seater jets and 8 twin seaters for training. According to Defence
Ministry sources, 328 million Euros was saved by negotiation efforts by the
Indian side on this Rafale deal and it was the best favourable terms of
contract for India if the details are studied judiciously.
The
Comptroller and Auditor General of India will scrutize these Rafale deal and submit its report in the
Parliament. Rahul should have waited for its remarks to criticize Modi’s
Rafale’s deal. BJP had accused previous UPA Governments of Scams only after
CAG’s report blaming them with scam. Except Congress, no other party was saying
anything about these Rafale Deal of Modi Government and by this, Congress is
being singled out.
Point 2 – Rafale Deal is not a classified document –
Details can be shared:
This is the most bizarre statement of Rahul in the
floor of Parliament House and even in the midst of discussion, it is historic
that French Government Foreign Ministry had issued the following statement from
Paris:
It was childish and immaturity
combined for Rahul to hold on to his stand of ‘All are Liars except Me’ in
spite of clear statement from French Government. It is sad to note him to say
that ‘Still I stand by my statement – Let them deny it if they want. French
President said that before me. I was there, Anand Sharma and Dr.Manmohan Singh
were also there.’
His anxiety to corner Modi, Rahul
tweeted: Government’s secrecy on Rafale pricing is proof of its corruption.
Can a Mere Secrecy on Rafale
pricing alone be considered sufficient proof of its Corruption?
Definitely NOT.
As the purchase of Defence Plans
is very sensitive issue involving national securities of two nations, it is
tantamount to exposing our preparedness and plans to other nations inimical to
our country’s interests. Still, due to
Rahul’s persistent accusations, Modi Government had unofficially revealed the
price details which are in the public domain. Only the details were not
officially authenticated.
How ignorant and absurd Rahul was?
A Secrecy Agreement with France was signed in 2008
(under the Congress-led government) and the Rafale deal was also covered in it.
It is an Agreement, which was signed during the previous Government on 25
January 2008. The Agreement of Secrecy is an umbrella agreement, which was
signed by the then honorable Defence Minister, Shri A. K. Antony. As per the
Article 10 of the inter-Governmental Agreement between Government of India and
Government of France on the purchase of Rafale Aircraft, the protection of the
classified information and materials exchanged under the IGA (Inter Government
Agreement) shall be governed by the provisions of Security Agreement signed on
25 January 2008.
Mrs.Nirmala Sitharaman, Defence Minister clarified
in the Parliament as under: "That is the agreement I am showing you with
the signature of the then honorable Raksha Mantri, Shri A.K. Antony. It is that
which we are following. When a question was asked to the French President, if
commercial details about Rafael could be revealed, the French President in that
interview to an Indian media house has said this: "You have these
commercial agreements and obviously you have competitors, and we can't let them
know the details of the deal." These are the words of the French President.
It seems strange that Rahul is
unaware of the confidentiality clause in arms deals which his government had
cited multiple times in the past to avoid divulging pricing details on defence
procurements. During UPA regime, both Pranab Mukherjee and AK Antony in their
capacity as the defence minister had evoked national security as the cause
behind secrecy.
The Congress president's hypocrisy is evident. It is
also dangerous because making the price point of defence procurement a
political ploy (and in effect pressurising the government to reveal these
details) may interfere with the operational security of the fighter jets and
render them vulnerable.
There are two reasons why these deals are a closely
guarded secret. One, the price of engines or cost-per-weaponry makes it easy to
adjudge the deterrence and deep-strike capability of the assets. This beats the
very purpose of procuring advanced fighter jets.
Second, these commercial deals are carried out on
the basis of preferential pricing, not fixed. The sellers consider it
disadvantageous to reveal the sweeteners or discounts because it reduces their
bargaining power vis-a-vis other customers.
Point 3: Purchase of 36 Rafale Jet Planes as ready to
fly status instead of producing them under Make In India Programme:
In
UPA Deal, out of total purchase of 126 planes, 18 to be ready to fly status –
immediate supply and only the remaining 108 planes to be manufactured in India
by the HAL. But Dassault Aviation was averse to partner with HAL to manufacture
the remaining 108 planes and hence UPA deal was stuck with this impasse.
Modi-
led BJP Government, under the pressure from the IAF’s pressing need to upgrade
the Indian Air Force, a policy decision at the highest level was taken to
acquire 36 ready to fly fighter planes from company not directly but through a
Government to Government contract. It is not the policy of Modi Government to
go in for only ‘Make – in - India’ for all products – more so when the defence
requirements are involved.
Under
this deal, Dassault and its main partners – engine-maker Safran and electronic
systems-maker Thales – will share some technology with DRDO (Defence Research
and Development Organisation) and some private sector companies and HAL under
the offsets clause.
Point No.4 & 5: 50% Offset
Clause – Anil Ambani Company was favoured instead of HAL – Modi’s encouraging
crony capitalists.
50% Offset Clause is
around Rs.30,000/- crore. France will invest 30% of this amount in India’s
military aeronautics-related research programmes and 20% into local production
of Rafale components.
The
offsets are to be carried out by French companies Dassault, Safran, Thales and
MBDA, all part of the Rafale project.
The
government-to-government deal for the French twin-engine has Dassault as the
prime contractor, with French multinational company Thales supplying the radar
and electronics.
The
estimated ₹30,000 crore offset
clause is divided among these four companies.
Sources
indicated that the biggest chunk would be with Dassault, with a share of ₹15,000 crore.
The
Thales JV with Reliance Defence inculcates a long term strategy to serve the
defence needs of the country.
Hence
Dassault and Thales JV – apart from other companies – have agreed to engage
Anil Ambani Company to fulfill certain obligatory contracts for the supply of
36 jet planes and these decisions are entirely of their own and Indian
Government cannot dictate terms to them.
As explained in detail above,
Dassault did not want to partner with HAL solely leaving other Private
Companies and it is their decision for which Indian Government had no role to
play.
Further the decision by Dassault
to choose Reliance as its JV partner was an independent agreement between two
corporate private sector entities. If Dassault relies on Anil Ambani Company
(which accordingly to Rahul had no previous experience in the manufacture of
Jet Planes) rather than HAL (having long standing experience in the field), the
consequences, if any, are to be on the shoulders of Dassault and French
Government in the event of any lapses in the delivery of Jet Planes and its
maintenance and supply of spare parts. Still HAL was not completely ignored by
Dassault in the deal which was not touched by Rahul.
The
Thales JV with Reliance Defence inculcates a long term strategy to serve the
defence needs of the country.
Hence
Dassault and Thales JV – apart from other companies – have agreed to engage
Anil Ambani Company to fulfill certain obligatory contracts for the supply of
36 jet planes and these decisions are entirely of their own and Indian
Government cannot dictate terms to them.
As explained in detail above,
Dassault did not want to partner with HAL solely leaving other Private
Companies and it is their decision for which Indian Government had no role to
play.
Further the decision by Dassault
to choose Reliance as its JV partner was an independent agreement between two
corporate private sector entities. If Dassault relies on Anil Ambani Company
(which accordingly to Rahul had no previous experience in the manufacture of
Jet Planes) rather than HAL (having long standing experience in the field), the
consequences, if any, are to be on the shoulders of Dassault and French
Government in the event of any lapses in the delivery of Jet Planes and its
maintenance and supply of spare parts. Still HAL was not completely ignored by
Dassault in the deal which was not touched by Rahul.
Point 6: Rafale
sold same 48 aircrafts to Egypt and Qatar in 2015 for rs.1319.80 crore per
aircraft then why did India pay rs.1670.70 per Rafale aircraft?
Can the price the IAF paid for
the Rafale be compared with the price the other two buyers -- Egypt and Qatar
paid?
While such a comparison would face the same pitfall
of not knowing what each of those contracts includes, on the face of it, both
those buyers are paying prices similar to, or higher than, the IAF.
The Egyptian air force has paid €5.2 billion for 24
fighters and is reportedly considering buying 12 more, a 'fully loaded cost' of
€217 million per Rafale.
Similarly, the Qatar air force has paid out €6.3
billion for a similar number of aircraft, with a 'fully loaded cost' of €262
million per fighter.
The competitive
price apart, the Indian Rafales will have 13 India-Specific Enhancement (ISE)
capabilities which are not present in the Rafale aircraft being operated by
other countries. These enhancements will provide a significant capability edge
to the IAF over India’s adversaries.
Still, in the absence of authentic details, such
accusations are to be treated with contempt. Further, first Rahul said UPA deal
was best and having failed to draw applause from opposition parties for his
revelation, Rahul was dragging the supplies made by Dassault Aviation to Qatar
and Egypt knowing fully well – such contracts like in India’s contracts are
classified documents!
Considering all aspects and steps taken by NDA
government with the objective of ‘no tolerance for corruption’, Rafale deal is
clean and scam free and this will be soon proved after the CAG scrutinized and
submitted its audit report to the Parliament.
General:
"I
have asked President (Francois Hollande) to supply 36 ready-to-fly Rafale jets
to India," Modi said at a news conference on the first day of a state
visit to France. On his part, then France president Hollande had said that
Jean-Yves Le Drian, the French defence minister, would travel to India soon to
finalise the deal. The formalities were completed between Manohar Parrikar and
Le Drian more than a year later when modalities of delivery were finalised.
The
present Defence Minister Nirmala Sitharaman said: "Not a single procedure
had been violated. It is a government-to-government deal approved by the
Cabinet Committee on Security."
In their
piece for The
Economic Times, Abhijit Iyer-Mitra, senior fellow, Institute of Peace
and Conflict Studies, and Angad Singh, air power analyst, wrote that "the
final negotiated per-unit price including programme costs (simulators, training
and infrastructure) and India-specific modifications of $247 million is well
within the ballpark figure. What is remarkable is that this figure has been
reached despite losing economies of scale and cutting the order to almost a
quarter of its original size."
Reacting to Rahul’s charges on the
deal, Prime Minister Modi in his speech in the Lok Sabha debate said,
"Attacking two nations at the same time with some childish allegations,
what kind of maturity is this? Rafale issue was discussed. I can't believe the
truth can be crushed like this. Both the nations were forced to issue
statements over this childish behaviour. They are screaming without any proof.
People have given you a chance to improve. Every soldier would have been
wounded by the words of the Opposition."
Let me
reproduced what Rahul, among other things, said about Modi in Rafale deal: “I can see Modi smiling. There is a touch of nervousness.
He is looking away, not looking into my eyes. Truth is that Modi is no a
chowkidar (guard) but a bhagidaar (collaborator). It is not a secret and it is a
Big secret. The PM squirms when asked about the price of Rafale and refuses to
look into my eyes. Sure smells like a scam’
As a finale,
even the Times of India paper which is anti-modi in its analyzing and reporting
had published the following:
NDA Govt saved
over Rs.12,600 crore in Rafale Deal:
UPA 18
fighters for 100 million each whereas 36 fighters for 90 million each.
Rafale deal
negotiated by the Modi Government resulted in a substantial 350 million
reduction for 36 aircraft in flyway condition as compared with terms that being
considered by the UPA and there is a futher 1300 million in saving for weapons,
maintenance and training.
Again UPA
deal was based on a fixed escalation figure of 3.9% whereas 36 Rafale fighters
contracted by NDA are linked to a limit of 3.5% thereby ensuring an additional
saving of around 200 million while it could add up around 1 billion euros.
UPA was
offered not technology transfer, but just licence manufacturing technology with
no agreement on crucial terms. Under NDA deal’s offsets clause, the inter
government agreement states the French party will facilitate implementation of
‘Make in India by the industrial supplier, notably through offsets for 50%
value of the supply protocol.
Congress
Party President Rahul should be cautioned to observe some decency and decorum
in commenting about the most sensitive subject such as Defence Procurement and
it is all the more condemnable to accuse directly and calling the French
President as a Liar and corrupt. Rahul had crossed Lakshman Rekha and had lost
his credibility and reliability not only in India but world over.
THINK INDIA
THINK
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