After Janta Ka Reporter’s two-part expose of the glaring irregularities in Prime Minister Modi’s announcement to procure 36 Rafale combat jets in flyaway condition from France, the main opposition party of the country raised few questions on crony capitalism.
However, the government’s only response was a press conference by defence minister Nirmala Sitharaman which didn’t answer any of the raised questions, but went into rhetorical defence by saying “the deal signed by Modi government is far better.” No facts or figures presented. Traditional media outlets, under fear of losing their lucrative revenue in the form of government advertisements coupled with the fear of reprisals, completely avoided the issues raised. Instead of questioning the Prime Minister’s reasons for bypassing set norms and taking a unilateral call to order 36 Rafale combat aircrafts, the government published weird arguments using right-wing authors claiming how it had saved Rs 12,600 crore in the deal. Though it will not be answered, it raises few more questions. It’s worth noting that Modi had gone ahead to procure 36 aircrafts even though the decision to buy 126 jets was based on the request from the Indian Air Force and had the union cabinet’s approval.
Why did Modi take unilateral call?
The first and foremost question is why did Modi take a unilateral call? Why did he not take the required approval of the relevant cabinet committees and choose to keep even his defence minister and finance minister in the dark? What prompted him to cancel the negotiations of a deal which was 95% completed as per Dassault Chairman on 25 March 2015? In the next 15 days leading to 10 April of the same year, what earth shattering emergency occurred in India to order 36 units in flyaway condition? These questions continue to remain unanswered.
A lot of weird theories and arguments have been put forward to justify the prime minister’s decision and and its impact on the price variation. Those arguments are untenable for the reasons mentioned here.
Veteran Defence analyst Air Marshal Anil Chopra wrote in detail about the modified defence procurement policy. He clearly mentions in his article “TCA includes direct cost of acquisition, cost of total technical life (TTL)-based reserves, cost of time between overhauls (TBO) mean time between failures (MTBF)-based reserves, cost of inspection level servicing, cost of repair level servicing and overhaul, basic operating costs and cost of transfer of technology (ToT). The types of spares include daily use spares such as consumables, line replaceable units (LRUs) and items like nuts, bolts, filters, fuses, etc. Intermediate level spares are used for rectification of the LRU up to card level. Depot level requires spares for major servicing and repairs. TTL and TBO-based reserves include components with specified life after which they need to be mandatorily replaced such as engine, pumps, gear boxes, cartridges, etc. If an aircraft has a TTL of 10,000 hours and engine TTL is 5,000 hours, two engines will be required in the life time. The direct cost of acquisition includes aircraft, weapons, support and handling equipment, MRLS for five years, tools and testers up to intermediate level servicing, initial training of personnel, training aids and publications. Cost of TTL-based spares include all mandatory replacement items up to stipulated life. Cost of spares for intermediate level is included in the MRLS, so only man-hour cost has to be factored in. Cost of depot level servicing over the entire life includes man-hours and spares and the amortised cost of infrastructure required to be set up at repair depot. The operating costs are essentially for fuel. MMRCA TCA included seven elements.”
This clarifies the right-wing propaganda machinery’s and some journalists’ arguments that the new deal announced by Modi included additional things and previously negotiated price was for “vanilla” product. The MMRCA deal was the first ever in the IAF history, which was calculated as per the Total Cost of Acquisition method.
Another important question completely avoided by BJP and its supporters are when the union foreign secretary told a packed house in the customary press briefing a day before the prime minister’s departure to France. In his press conference, the foreign secretary had confirmed that the negotiations between the government of India, HAL and Dassault Aviation was undergoing well based on the existing RFP issued by the previous UPA government. Why then no one cared to ask if the prime minister hadfollowed all the set norms to announce such a decision?
More pressing questions
There are other pressing questions which are not yet answered by any one. The government of India sent out RFP as per the recommendation made by the IAF on the required number of aircrafts. The IAF shortlisted two products after extensive trials. When the IAF rejected all the other aircrafts except two twin engine ones, when did IAF change its stand and decide to go for single engine aircrafts? Or did the government take a unilateral decision on that front too? A recently published article shows that the government was re-considering that decision and even contemplating to include twin engine fighter jets into the competition because single engine fighter jet selection may lead to a single vendor situation.
Tata group signed a Joint Venture agreement with Lockheed Martin to produce F-16 Block 70 in India. IAF rejected F-16 because nothing much as product upgrades was expected. Also, aside from F-16 being the oldest, Pakistan Air Force was too much familiar with this combat aircraft. Moreover, previous experiences of American behaviour towards India after 1998 Pokhran nuclear tests played heavy on Indian defence establishments’ mind. Also, the world over F-16 is retiring. And Saab uses almost 50% American parts for Gripen. Defence news website Indian Defence Research Wing published an article on 5 July 2017 with the title “IAF Test Pilots give ”Thumbs Down” to both F-16 and Gripen-E”. It quoted unnamed senior test pilots of IAF asking why these two fighter jets should not be included into the IAF and why it was rejected earlier when the testing was on for the now cancelled RFP.
That makes the question more valid – Why did Modi Government cancel the previously negotiated and 95% completed RFP and float another RFI for single engine MMRCA? When the IAF – the end user and the people with technical knowhow – already rejected these two products, how and why was another RFI sent across to these two companies? It will be worthwhile remembering that Adani Group signed a Joint Venture with SAAB to produce Gripen in India after this RFI was floated? Whose “National interest” was behind this? Before sending the RFI to these companies whose products were already rejected by the IAF for multiple reasons, why was the so-called nationalist government hell-bent on compromising India’s national security?
Business Standard published an article On 8 September this year which quotes Boeing India Chief Pratyush Kumar as saying: “tried hard, and could not find a single example [of successfully building an aircraft under ToT] where it was just the brand new private enterprise with limited aerospace experience”.
Business Standard published another article on 17 November 2017 titled Boeing And HAL Discuss F/ A – 18 Fighter in which author defence analysts Ajai Shukla says : “Boeing’s partnership with HAL — which already has an airfield and manufacturing hangars in Bengaluru — would significantly reduce the price of each Super Hornet. In contrast, a vendor that partners a private Indian firm would need to factor aerospace infrastructure into its pricing. Boeing has already expressed public reservations about the private sector’s inexperience in aerospace.” This discussion is very significant for two reasons. Indian Navy has already issued an RFI to procure 57 twin engine aircrafts for its aircraft carrier and secondly what prompted Dassault and other manufacturers like SAAB to avoid the experienced HAL to tie-up with newly formed companies of Anil Ambani and Adani Group respectively.
Modi government cannot avoid answering pertinent questions citing any newly introduced clauses to evade its responsibility. Instead of using its sympathetic media and party propaganda websites, government should be forthcoming with proper and convincing answers to clear the air once and for all.
(The author can be contacted on Twitter via @t_d_h_nair )