By Ajai Shukla
Business Standard, 17th Nov 17
Underlining the Bharatiya Janata Party’s (BJP’s) unease at Congress Party allegations of wrongdoing by the National Democratic Alliance (NDA) government in the Rs 58,000 crore purchase last year of 36 Rafale fighters from French company, Dassault, Defence Minister Nirmala Sitharaman led a counterattack on Friday.
Flanked by Defence Secretary Sanjay Mitra and Indian Air Force (IAF) procurement chief, Air Vice Marshal Rathunath Nambiar, Sitharaman lashed out at the Congress on five counts.
First, she stated, the previous BJP government had, as early as 2000, “recognised the need to strengthen the IAF”, leading to procurement being initiated for 126 medium multirole combat aircraft (MMRCA). Yet, the Congress Party was unable to conclude the purchase of Rafale fighters “for an entire decade between 2004-2014”, she said.
That “act of omission” had led to severe fighter shortages in the IAF, Sitharaman charged. “This was the grim situation when this government came to power in 2014”, she said.
In fact, the MMRCA procurement was initiated only in 2007, with the issue of a Request for Proposals (RfP or tender). Over the next four years, the IAF evaluated six contending fighters --- Boeing’s F/A-18E/F Super Hornet: Lockheed Martin’s F-16IN Super Viper; RAC MiG’s MiG-35; Saab’s Gripen C, the Eurofighter Typhoon and the Rafale --- in what was hailed worldwide as “the world’s most professionally run fighter competition.”
In April 2011, the IAF ruled out four fighters, leaving only the Eurofighter Typhoon and Dassault Rafale in the fray. In January 2012, the Rafale was identified as the winner of the contest and negotiations began with Dassault over the cost. Therefore, the UPA can, at worst, be accused of two years and three months of vacillation, until the BJP came to power in May 2014.
Sitharaman’s second rebuttal related to the Congress accusation that Prime Minister Narendra Modi had not followed due procedure, and not even consulted his defence minister before announcing during a state visit to France in April 2015 that India would buy 36 Rafale fighters in fly-away condition.
“When the prime minister went to Paris in 2015 and agreed [on the purchase of 36 Rafales], he followed the due process of getting it cleared through the Cabinet Committee on Security (CCS)”, said Sitharaman. “In September 2016, almost a year and a half later, the Inter-Governmental Agreement for buying 36 Rafales was signed in the presence of the defence ministers of France and India”, she said.
While it is true the CCS cleared the Rafale purchase after Modi returned from Paris, no CCS permission, or from any defence ministry procurement body, was obtained before Modi and French President Francois Hollande announced the Rafale buy in April 2015.
Thirdly, Sitharaman countered the Congress’ accusation that the NDA government had obtained the Rafale without transfer of technology, whilst the MMRCA contract the United Progressive Alliance (UPA) government was negotiating involved full transfer of technology (ToT) for building the Rafale in India.
“This is simple economics. When we are talking about building 126 aircraft [in India], ToT makes economic sense. But when you are buying 36 aircraft across-the-counter… it makes no economic sense for ToT to be added on”, she correctly stated.
Fourthly, Sitharaman rejected the Congress’ oblique allegation that Anil Ambani’s Reliance Defence Ltd (RDL) had benefited from his proximity to the PM to be unfairly picked as Dassault’s Indian partner for discharging the 50 per cent offset clause that came with the Rafale deal.
“If two private firms come together, that doesn’t require government’s permission”, said Sitharaman. She argued the PM does not control the composition of his business delegation and it does not matter if it includes “a certain individual”.
Finally, Sitharaman argued that “The price we have obtained [the Rafale for] is far less [than the UPA]”.
However, she was unable to address media queries about how must the government was paying for 36 Rafales, compared to what the UPA government had negotiated.
“We will give you the figures that you want”, said Sitharaman, directing the query to the defence secretary. However, he did not have the figures either.
In April 2015, the announcement in Paris by Modi and Hollande of their agreement over the Rafale took the defence ministry by surprise. This was evident from a series of uncoordinated statements from then defence minister, Manohar Parrikar, who was left fielding questions in India.
The morning after the announcement, Parrikar erroneously told PTI in Goa that the 36 fighters would join IAF service within two years. Apparently distancing himself from the Rafale deal, Parrikar termed it “a great decision taken by Prime Minister Narendra Modi on better terms and conditions.”
Nor was Parrikar aware of how many Rafales would be bought. He told Doordarshan: “It may be worked out that we will buy another 90 Rafales… The ‘Make in India’ part will be decided only after government-to-government talks.”
With the Congress pressing home its attack over "insurmountable loss" of taxpayers' money, the BJP is marshalling its counter. On Thursday, IAF boss, Air Chief Marshal BS Dhanoa stated the NDA had pulled off “a cheaper deal” than what the UPA was contemplating.
In fact, between 2013-14, UPA defence minister, AK Antony, had repeatedly made clear his deep reservations over the Rafale procurement, telling close associates that he was never going to sign it.