When we broke the Rafale story, we raised many questions on the irregularities in Modi govt’s decision to purchase 36 Rafale fighter jets from France. We raised questions not only on the exorbitant cost escalation, but, many other contradictions which Modi government is not able to answer. Raising these points are important at this time because many people include journalists are concentrating only on the financial aspect of the deal to justify the price hike.
The first and foremost point is, when Nirmala Sitharaman says “the contract negotiations reached an impasse”, how was it possible that the Chairman and CEO of Dassault Aviation – the manufacturer of Rafale – was not aware of such an “impasse till as late as 25 March 2015? Or shall we assume, Modi govt wanted to purchase 36 Rafale jets in a separate deal beyond the then ongoing negotiations with Dassault for the purchase of 126 units? If that is the case, when did the government take such a decision and in which cabinet meeting? Or the decision was taken without a cabinet meeting? When did the approval of Cabinet Committee on Security come for this decision?
As pointed out in one of our previous columns, on 25 March 2015, Eric Trapier held a press conference on the occasion of the handing over of the first two upgraded Mirage 2000 to Indian Air Force in Dassault Aviation’s Flight Test Centre at Istres, France. India’s ambassador to France Arun K Singh, Senior IAF and HAL officials attended the ceremony.
In the video posted on Dassault Aviation website, Eric Trapier is seen saying, “The Rafale aircraft has been chosen by India after a comprehensive selection process in the frame of the MMRCA competition, and exclusive negotiation is ongoing. The Rafale is the next logical step. HAL and Indian Industries will contribute to the ‘Make-in-India’ policy by developing and manufacturing the aircraft locally. The Rafale will fulfill all of the operational requirements of the Indian Air Force and the industrial requirements of India’s economic policy as the Mirage 2000 continues to do.”
Dassault Aviation CEO added further that the then ongoing “negotiations with India’s Ministry of Defence were 95% completed and due to the conformity to the RFP, the contract finalisation and signature could happen soon.”
This raises serious doubt on Sitharaman’s answer in Parliament. If the negotiations reached an “impasse” wasn’t the CEO of Dassault Aviation aware of that? Or did the negotiations reach an “impasse” after 25 March 2015? In that case, there is a 16 day window between PM Modi’s announcement of “his decision“ to purchase 36 units of Rafale off the shelf from France on 10 April 2015. On the same day, In the press conference Modi said: “I have asked President (Francois Hollande) to supply 36 ready-to-fly Rafale jets to India.”
What makes this statement of Modi more curious are few things. When the CEO of Dassault Aviation says on 25 March that the negotiations is 95% complete and due to the “conformity of RFP”, the contract can be signed soon, what was the reason for this “impasse” Nirmala Sitharaman mentioned?
From the above statement of Eric Trapier, it is difficult to believe Dassault was not happy to work with HAL as projected by BJP supporting Defence analysts and defence journalists. Though this question was raised in November last year itself, neither did the government nor did any BJP leader bother to clarify it, let alone the RW supporting journalists and defence analysts.
Further, few significant developments took place in between the 16 days period- from Eric Trapier’s Press conference to Modi’s announcement from France. The first two are the incorporation of two companies in India in defence manufacturing sector. In the first, Gautam Adani’s Adani group incorporated “Adani Defence Systemes And Technologies Ltd” in Ahmedabad on 25 March 2015 and three days later on 28 March, Anil Ambani led ADAG incorporated “Reliance Defence Limited” in Mumbai.
Big corporates forming new companies within their groups are nothing new. But these two incorporations at that time raise eyebrows because of the proximity and relationship these two business magnets share with Prime Minister Modi. And within few days of this development, Dassault Aviation became unhappy with HAL (with whom they signed a work share agreement way back in March 2014 and till 25 March 2015 “very happy to work with”) and in less than three months, Modi government formally withdrew the RFP for the procurement of 126 MMRCA.
Well known defence analyst Ajai Shukla confirms in his article that the then defence minister Manohar Parrikar was not aware of the decision to purchase 36 Rafale jets off the shelf till 3 April 2015. He came to know only when he was called to PMO to ‘inform’ this decision. And note, he has been called to inform, not to consult.
And in the customary press briefing before the the PM’s departure on a foreign tour, the then foreign secretary S Jaishankar answered journalists’ question on Rafale deal signing: “In terms of Rafale, my understanding is that there are discussions underway between the French company, our Ministry of Defence, the HAL which is involved in this. These are ongoing discussions. These are very technical, detailed discussions. We do not mix up leadership level visits with deep details of ongoing defence contracts.
“That is on a different track. A leadership visit usually looks at big picture issues even in the security field.” It shows, such an announcement was not a part of PM’s official itinerary, but his personal call. The question is how could Mr Modi take such a call unilaterally and what prompted him to take such a call? Nobody knows the answer.
Another interesting development which very few people noticed happened after the withdrawal of RFP was, the issuance of a new RFI on 6 April this year for the procurement of 110 fighter jets. The same 6 manufacturers who participated in the MMRCA tender in 2007 submitted their proposals. If they had to go ahead with a new RFI, why did they withdraw the 95% negotiated RFP of Dassault Aviation, especially when after years long tests, IAF wanted Rafale? Well known defence strategist and analyst Bharat Karnad wrote on 6 April 2018, “(It) compensates for Modi’s buy of 36 Rafales from France for the same amount of money as was set aside for 126 of the MMRCA with transfer of technology, which justly drew flack and plunged the Modi government in hot water.”
“It is obvious the option IAF would prefer is to add 110 more Rafales. Dassault having pocketed $12 billion for 36 of these would be happy to sell the rest for another $20-$30 billion with TOT. And well connected Reliance Defence is already chosen as its strategic partner.”
In October 2016, India reportedly issued a confidential RFI to four single engine fighter jet manufacturers around the world inviting proposals for 110 single engine fighter jets. Well known columnist Ashok Swain then wrote about the Swedish company Saab Gripen being the winner for various reasons.
He argued that the Modi government shortlisted Saab Gripen and Lockheed Martin F-16 Block70 because Saab tied up with Adani Group in September 2017 and beforehand Lockheed Martin tied up with Tata group. The well known secret was, IAF never wanted F-16s because Pakistan Air Force use them and they are well familiar with the machine.
Hence, the only available choice was Saab Gripen. But, after the irregularities in the procurement of 36 Rafale came out, the Modi government cancelled the RFP under political pressure.
On 14 July 2018, Economic Times published an article quoting Chief of Air Staff B S Dhanoa that the govt is planning to put another RFI this month for “a fleet of single engine aircrafts”. We should remember, IAF extensively tested all available options over years before finalising on Rafale in 2011 and rejected all single engine aircrafts. Rather none of them reached even the final list. In this “strategic partnership model” where foreign a manufacturer tie up Indian business partner to manufacture the aircrafts in India. In Previous RFP, govt finalised two products and rejected other two. From the final two, F-16 is not preferred by IAF. Who else left and who will grab the contract?
The higher cost India paying France is a separate issue which everyone is speaking now. When Qatar and Egypt paying approximately 172.75 million euros per Rafale, whereas India is paying a whopping 226 million euros per unit. When people argue that the additional cost (other than for weapons) for Indian specifications increased the cost, they are fooling themselves and others. There is no separate price available. Hence taken the average of the total deal value of both countries put together. Their orders are for 24 units each. (See below)
It is hard to believe that a professional organisation like IAF requested for a RFP without those changes or add-ons and that was not a part of the price submitted in RFP. A defence ministry source familiar with the old RFP said on the condition of anonymity “indeed it was included in the pricing. How can you ask such a stupid question?”
Instead of clarifying these unanswered questions, the government is hiding behind a secrecy pact. Which secrecy pact has ever prevented them from clarifying these doubts and inaccuracies? What kind of national security threat does it create? If Modi government’s hands are clean and they have nothing to hide, they must clear the air with valid and convincing answers.
(The author can be contacted at @t_d_h_nair on Twitter)