Rafale deal not yet BJP’s Bofors

Columnist  | Pavan K Varma

Opinion, Columnists

The perception that there has been a huge defense scandal has hardly percolated down to the common people.

Rafale aircraft

The Rafale deal needs some clarity. That the Indian Air Force is badly in need of modern fighter aircraft is without doubt. The fact that we need to purchase them from abroad is incontrovertible. Our own abilities to manufacture state of the art aircraft, or even weaponry, is highly limited, given the verifiable under performance of organisations like the Defense Research and Development Organisation (DRDO), and some of our other public-sector units associated with defence. It is also true that procurement of fighter planes has been much delayed, thanks to the proclivity of the UPA government — and within it of the then raksha mantri, A.K. Anthony — to postpone decisions vital to our national security.

It is true that in the deal negotiated by the previous UPA government in December 2012, Rafale was the most acceptable aircraft in terms of price and strategic requirements.   That deal was for 126 aircraft, of which 18 were to come from France in a flyaway condition, and 108 were to be manufactured in India by Hindustan Aeronautics Limited (HAL), in order to facilitate much needed transfer of technology. In the agreement, 70 per cent of the work was to be done by HAL, and 30 per cent by Dassault Aviation. This “workshare agreement”, signed in March 2014 was to the tune of about Rs 36,000 crore. The publicly disclosed price per aircraft in the overall deal was Rs 526.1 crore.

It is also true that during his visit to France in April 2015, PM Modi abrogated the earlier deal, and announced an “off the shelf” purchase of 36 aircraft at a cost of Rs 1,670 crore per aircraft.  This was roughly three times the price per aircraft compared to the earlier deal. This price is in the public domain; Dassault Aviation disclosed it in its annual report for 2016. It is also known that in the revised deal, HAL was dropped as the Indian partner. Dassault entered into partnership with several Indian corporate entities, in which the most prominent was Anil Ambani’s Reliance Group.

With these facts on board, the Opposition is asking the government why the price of the aircraft escalated to three times the originally negotiated price, especially since the joint statement issued during PM Modi’s trip to France said that the “aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by the Indian Air Force” under the UPA government. The Opposition also wants to know why HAL was dropped, and the Reliance Group, among others, was chosen by Dassault as per the offset clause. The essential response of the government is that the procurement of the Rafale aircraft was unacceptably delayed, the needs of the Indian Air Force could no longer be ignored, it was an inter-governmental agreement so there were no middle-men, the price is actually cheaper when you take into account add-ons such as state of the art weaponry and gadgets, and that the government had nothing to do with the choice of Dassault’s offset partners, of which the Reliance Group was only one among several others.

Between these strongly opposed narratives is a full-blown perception war. The Opposition would like to make Rafale the Bofors of the current regime, alleging corruption, crony capitalism, and violation of defence procurement procedures.  To be honest, even if its accusations are — as it believes — correct, it is not doing too good a job in projecting them. The perception that there has been a huge defence scandal has hardly percolated down to the common people. Most people don’t even know what Rafale is, bird or plane. It is nowhere near being a national issue, or anywhere as close to what Bofors was manipulated to become. Staccato press conferences drowned in technical details, held largely in Delhi, or brief speeches in Parliament, have hardly translated into a mass movement of protest on the ground, and do not seem to have significantly dented the credibility either of the PM or his government.

The government does not seem to be doing too good a job to defend itself either. The initial attempt to not reveal the revised price of each aircraft by invoking a secrecy clause was hardly convincing, since much of the facts on pricing were already in the public domain. One contradictory statement followed another, reinforcing the impression that there was something to hide. On Anil Ambani’s company being chosen as Dassault’s partner in the offset agreement, the government’s defence bordered on the bizarre. First, it was maintained that the government had nothing to do in the matter, and that this was entirely Dassault’s decision.  Then, when former French President Hollande said that Anil Ambani was chosen as a partner only on the request of the Indian side, the raksha mantri — no less — actually accused Rahul Gandhi and Mr Hollande to be in conspiracy with each other to malign the government!  To make such an allegation against a former head of state of a friendly country borders, quite frankly, on the ridiculous.

The best course for the government would be to opt for transparency. If it has done nothing wrong, then why not share as much information as possible, subject to national security concerns? All the facts relating to pricing should be, to the extent possible, placed in the public domain. Details with regard to price negotiations, and formal clearances, including exact dates, should be made public. Why the price-per-aircraft has increased threefold should be credibly explained. Any doubts about why a particular corporate house was chosen as the offset partner should be clarified. Prevaricating statements should be avoided. And, instead of any and every minister deciding to speak on the subject, only the raksha mantri, or the PM, should do so.

Allegations on defence scams get magnified with every attempt at secrecy. If the government is so convinced of its innocence, it could even agree to a JPC. The JPC is not a party forum.  It has been set up in the past, and the BJP itself has asked for it the most.