Monday, February 19, 2018

Rafale Jet Deal: Mother of all defence scams

The Indian Air Force’s (IAF’s) glorious feats in wars since 1947 have been in consonance with the force’s motto of “Touch the sky with glory.” However, the process of its latest acquisition, Rafale, a 4.5 generation omnirole combat aircraft manufactured by Dassault Aviation, France, is so opaque, nepotistic and shrouded in secrecy, that it may turn out to be the mother of all defence scams in the history of India.
It was in September 2016 that the deal for 36 aircraft for ?58,000 crore was finalised with the signing of the Inter- Governmental Agreement (IGA) by then Defence Minister Manohar Parrikar and his French counterpart Jean-Yves le Drian in New Delhi. It had been announced a year earlier by PM Modi in Paris. Basically, India would pay a whopping ?1,611 crore for each of the planes, the same planes for which the UPA government was paying ?526 crore per unit. The UPA government had floated a tender to purchase 126 medium multi-role combat aircraft and the Rafale was chosen over five other competitors.
The irony is that while inflation plus weapons package cannot justify this huge difference in per aircraft cost, the UPA’s price included transfer of technology (ToT), under which 108 aircraft would have been built by the state-owned Hindustan Aeronautics Limited (HAL). Under this current deal, there is no ToT as all 36 planes have been ordered on a fly-away basis. So, several questions arise. Why were orders for seven squadrons cut down to two? Why is there such a massive price escalation in spite of no transfer of technology? Where is this money going? Why is Dassault partnering with Reliance Aerospace in India and, in the absence of ToT, what are the offset obligations of Dassault? And there are many more such questions. Till date, the Narendra Modi-led BJP government has not answered any of them.
Incumbent Defence Minister Nirmala Sitharaman’s written reply to Parliament on February 5 this year that the government is not aware of the Indian partner of Dassault Aviation has taken what was murky into the realm of the unreal. When the joint venture company of Dassault and the Anil Ambani-led Reliance Aerospace laid down the foundation stone of its facility in Nagpur in October, 2017, BJP leaders like Maharashtra Chief Minister Devendra Fadnavis and Union Minister Nitin Gadkari were present. The JV was formed 13 months before the deal was announced and it’s in the public domain. So why this denial?
What is perhaps most crucial is the betrayal of national interest on part of the Modi Sarkar by superseding the public sector HAL, which has extensive experience in the aer¬ospace industry in favour of the Anil Ambani-led company, which has zero experience in the defence sector. Under the deal mooted by the erstwhile UPA government, HAL was to get a ?30,000-crore business share in the project, which would have kept its production lines alive. It had signed an agreement to this effect with Dassault on March 13, 2014.
Pallam Raju, former MoS of Defence, told National Herald, “By deleting HAL from the deal, the Modi government has destroyed the whole ecosystem which we had created through the UPA’s offset policy. Thousands of jobs and working hours would have been added if the government had gone forward with the older deal. The deal exposes the sham of Modi’s ‘Make in India.’ Otherwise, he would not have deprived HAL of the chance of producing 108 of these planes.”
18/02/18 Bhasha Singh/National Herald