Rafale Deal: The ‘Fall’ of the Modi Government

Congress’ Pawan Khera debunks the ‘myths’ of the Rafale deal and what it means for the Modi government.

Of all the seasons, Fall plays a unique role. Fall starts revealing the true character of denuded trees. This year, Fall in Europe has shown its colours in Delhi – 12,000 kms away from France.

Former President of France Francois Hollande has rocked the boat which already had several gaping holes.

From the conflicting versions of India’s Raksha Mantri and Finance Minister, it was clear that not only was the Modi government concealing facts, it also did not know how to escape its own web of lies.

Price Discrepancy

When confronted with the vast price difference – from 526 crore per aircraft to 1,670 crore per aircraft – the first defence of the government was ‘secrecy clause’, which ostensibly did not permit the government to reveal to the Indian taxpayer how much of their money was being spent on procurement of fighter planes.

The claim was contradicted by the former French President François Hollande, who, in an interview, clearly said that the price per aircraft was not under any secrecy clause.

More importantly, both Reliance Defence and Dassault have mentioned the price per aircraft. The government should invoke the so-called ‘secrecy clause’ and file a case against both of them. Another argument that came as an afterthought to Nirmala Sitharaman was that the UPA regime was getting a cheaper deal because those aircrafts did not have weaponry. Perhaps the Prime Minister did not share the India-France joint statement dated 10 April 2015 which clearly states ‘the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by Indian Airforce’.

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Thus, it is clear that for 526 crore, the UPA government was getting fully-loaded aircrafts as per the Air Staff Quality Requirement (ASQR) along with technology. For 1,670 crore, we are now getting a fully-loaded aircraft as per identical ASQR, but without the transfer of technology. While Sitharaman justifies the steep price gap citing mythical difference in configuration, Arun Jaitley claimed that the basic plane bought by Modi was 9 percent cheaper than the UPA deal and was overall 20 percent cheaper. Both the esteemed ministers forgot Manohar Parrikar’s statement in April 2015 that the cost of 126 fully loaded aircrafts was roughly 90,000 crores.

Offset Guidelines

When we asked the government the basis on which HAL was replaced with Reliance Defence, we were told by Nirmala Sitharaman on 12 February 2018 that no such offset contract had been awarded. Interestingly, on 27 October 2017, Ms Florence Parly, the Defence Minister of France, laid the foundation of Reliance factory in Nagpur. She had met Ms Sitharaman the same morning. We are then told that under the offset policy, an Original Equipment Manufacturer (OEM) is free to choose its partner(s), with the government having no role to play. The truth is, the offset partners of the OEM need to be approved by the Ministry of Defence.

Offset guidelines clearly state that the ‘private company has to submit technical and financial details by a date to be specified in the RFP, 3 months from the date of submission of the main technical and financial proposals’.

The DG Acquisition has to then constitute an evaluation committee to go into both the financial as well as technical proposals, following which the MoD has to approve the offset partners.

Ravi Shankar Prasad, Minister of Law and Justice of India, tried to deceive the nation when he claimed that the negotiations between Dassault and Reliance dated to 2012. As Law Minister, he did not produce any documentary evidence to support this bizarre claim. He merely quoted a newspaper report. Surely Prasad knows that it was Mukesh Ambani-led Reliance Industries that was in talks with Dassault, and not Anil Ambani. The then UPA government made it clear to Dassault that the tender for the procurement clearly stated that aerospace PSU HAL would be the partner in the deal.

Transfer of Technology

The UPA government negotiated a deal that was not only cheaper, but for 560 crore per aircraft; India would have also bought the technology. Modi negotiated a deal under which we ended up paying 1,670 crore per aircraft and still did not get the technology. The government has not responded to this critical aspect of the deal which undermines its own stated motto of ‘Make in India’.

Reliance Infrastructure Ltd stated in its Investor Presentation that it had secured 1 lakh crore of ‘Lifecycle Cost Contract’ over and above the 30,000 crore ‘offset contract’.

When cornered by such damning information and questions on replacing HAL, a Navratna company with 70 years of experience in aircraft manufacturing and maintenance, Sitharaman had another gem as an argument – that HAL did not have the capability to manufacture. It was bravely countered by the former boss of HAL, Suvarna Raju. Just 15 days before the Prime Minister visited France along with Anil Ambani, Éric Trappier, CEO of Dassault Aviation announced on 25 March 2015, that his company and HAL had resolved the issue of warranties, and that 95 percent of the deal was complete and the remaining 5 percent would be finalised soon.

So what transpired in 15 days that HAL suddenly became ‘incapable’ of partnering the deal?

The UPA regime has been accused of not finalising the deal in 10 years. The Indian Airforce was asked by the Ministry of Defence in 2004-5 to prepare a tender for 126 Medium Multi-Role Combat Aircraft. The IAF prepared the tender in 2007. These tenders involving such expensive equipment take time as our forces have to research and identify a compatible technology. In 2008, there were 6 bidders. Again, the IAF had to evaluate 6 different planes based on 643 technical parameters. This evaluation was completed in 2011. Rafale was L1 and the tender was finalised on 12 December 2012.

Modi Govt’s False Bravado

Not even one minister of the Modi government has yet responded to some critical questions. So perhaps the answer lies in Hollande’s revelation. One would think that this was an arrogant government that refused to answer questions raised by the opposition on Rafale.

We now know this is a government which is afraid of these questions.

This false bravado, where the defence minister of the country resorts to hashtags instead of clearly responding to questions; where the finance minister, instead of responding to questions on Rafale, makes personal attacks on those who question; where the prime minister of the country has a lot to hide – to begin with, his face from the brave Indian Army that is starved of equipment and the tax payers of this country who ask ‘why are you paying 300 percent extra per aircraft, why are you procuring only 36 aircrafts when the Army requires 126, Mr Prime Minister?’

For Narendra Modi, it appears, “all at once Summer collapsed into Fall”.

(This piece is a response to Arun Jaitley’s interview on Rafale)

(The writer is former political secretary to Sheila Dikshit, and is with the Congress party. He tweets @Pawankhera. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)