Wednesday, November 29, 2017

Saab’s tie up with Adani to sell Gripen fighters may cause bigger scandal than Rafale

Over the last couple of weeks, the joint venture of Dassault Aviation and Anil Ambani’s Reliance has created quite a storm in India after the Congress party made allegations of a huge scam in Prime Minister Narendra Modi’s decision to purchase 36 Rafale fighter aircraft in flyaway condition.

As originally reported by Janta Ka Reporter (Part 1 and Part 2), Anil Ambani’s newly formed Reliance Defence had struck a joint venture with Dassault Aviation that sold Rafale within 10 days of Modi announcing the deal. It looks like Gautam Adani, another close friend of Modi, too is keenly following in the footsteps of Anil Ambani in benefiting from the prime minister’s shopping spree in the defence sector.

A newly created alliance between a Swedish arms manufacturer and Adani Group is aiming for a much bigger pie while India is planning to spend a whopping $250 billion to modernise its armed forces.

Sweden’s defence firm, Saab, tied up with India’s Adani Group as recently as September this year. But considering the past records of these two companies, there is a strong possibility that their aggressive pursuit to sell arms to the Indian armed forces might create another big corruption scandal soon.
Saab, with the help of the collaboration with Adani is aiming to win its bid against Lockheed Martin to sell more than one hundred Gripen fighters to the Indian air force. In October 2016, the Indian Air Force had issued a request for information (RFI) from the major fighter jet manufacturers to send in their offers to sell warplanes worth $25 billion, which is thrice a bigger deal than what India had agreed to spend on purchasing 126 Rafale jets.

After scrutiny, India’s defence ministry narrowed down the competition to Saab’s Gripen E and Lockheed Martin’s F-16 Block 70. To satisfy Indian demand, Saab has reduced its offer price and even offered to build these single engine fighter aircrafts in India. Moreover, to outsmart its competitor Lockheed Martin, Saab has created a joint venture with Adani Group. Saab, after getting Adani on board, is so confident of getting this deal that it brought all its international partners and suppliers to Delhi on 31 October this year for a two-day Gripen Indian Partnership Summit 2017 to connect with selected Indian industries. Besides, eyeing for this major deal, Saab in collaboration with Adani Group has also announced its intention to sell UAVs and helicopters to the Indian military.

Since early 1940s, Saab has been selling military aircrafts, so there is nothing unusual about the bid by the Linköping-based group for the billion dollar arms deal in India. However, Saab has been involved in a number of scandals as it sold fighter jets to other countries. Its sale of 29 Gripens in 1999 to South Africa has been scandalous due to allegation of payment of huge bribes. The sale of 24 of the same fighter jets to the Czech Republic in the last decade has also come under suspicion of corruption. Its deal with Hungary too came under the scanner of potential corruption.

The recent purchase of Gripen fighters by Brazil in the middle of its economic crisis also smacked of ulterior motives other than the official reasons of technology transfer in defence sector. Thus, controversy-prone Saab’s decision to partner with India’s equally controversial Adani Group raises a number of pertinent questions about the methods it may adopt to procure the contracts to sell military hardware to India worth billions of dollars.

Arms deals have been contentious in India because of the Indian law forbidding any payment to middlemen. However, the reality is that it is simply not easy for foreign arms manufacturers to be able to sell something in India without paying bribes to generals, bureaucrats and politicians. It appears that after coming to power, the Narendra Modi government has attempted to accord a somewhat official sanction to these ‘middlemen’ by encouraging its favorite business houses in India to create their own arms manufacturing units in the name of ‘Make in India’.
28/11/17 Ashok Swain/Janta Ka Reporter