Rafale Controversy: Opposition allegations of a scam are built on quicksand
On Tuesday, an anti-Modi colleague of mine asked for my opinion on the "Rafale scam". To which, I asked her to explain the scam first. She said, Modi has given a contract to Reliance which should have gone to HAL in the Rafale deal. I asked her what is the Rafale deal and exactly what contract has gone to Reliance instead of HAL? Puzzled for a moment, she refused to discuss it any further, calling me a biased person, and pronounced that all she wants is for Modi to lose in 2019!
This brief conversation sums up the misinformation and propaganda over the deal and the people willing to buy into it.
The Rafale controversy has now turned into a theatre of the absurd.
Due to the dwindling number of air force squadrons from 42 to 32, and the reported failure of HAL to produce Tejas jets, the UPA government floated a global tender, MMRCA to buy the multi-role fighter jets. After a long-drawn process, Rafale emerged as the winner according to the Indian Air Force. Under the deal, 108 jets were to be produced in India. But the UPA government simply failed to clinch the deal due to various reasons.
The chief reason among them was the simple fact that the original number of 126 jets was unaffordable when the full cost of weaponry and modifications was included and it could have wrecked the defence budget. And because Dassault had raised doubts about the capabilities of HAL (the default partner) to manufacture Rafales and refused to take responsibility of the jets so produced.
In fact, as late as July 2014, the issue of responsibility sharing between Dassault and HAL for licence manufacture of aircrafts was unresolved. And lastly, the then-UPA defence minister was paralysed by the fear of corruption in this mega deal, given that scam after scam had started to rock the UPA by 2012.
The harsh fact is that the original deal reached a dead-end. Therefore, the new government in 2015 decided to scrap the older deal altogether and opted for an Inter-Governmental Agreement (IGA) signed in 2016 between the Government of India and the Government of the French Republic for the supply of 36 Rafale aircraft with India-specific modifications, weapon package, industrial support for 50 years (instead of 40 years in MMRCA), additional warranty for three years, free of charge weapon storage for six months and advanced training of IAF pilots by the French Air Force.
Also, the Modi government negotiated the higher offset requirements at 50 per cent, which must be ploughed back into India by the French companies involved in the Rafale manufacturing.
Consequent upon this Rafale deal, there are dozens of separate deals being negotiated between the French companies and their Indian counterparts, which include both private and public sector companies. Some of them are the Mahindra Group, the Kalyani Group, Godrej, Bharat Electricals Ltd, DRDO, Tata Advanced Systems, Samtel, etc.
One of these 72 companies is the joint-venture between Reliance Defence Ltd and Dassault Aviation. And that has become the eye of the storm with the Opposition alleging undue favour to Reliance at the cost of HAL.
The false impression has been created that the original deal was tampered with in violation of the rules to take away the manufacturing of the jets from HAL to favour Reliance. But no parameters of the old deal were changed. It was simply not required as the old deal was scrapped.
What we have is an entirely new deal in full conformity with the Defense Procurement Procedure-2013.
The due process of mandating, conducting and monitoring of negotiations, etc., were observed and approval of the Cabinet Committee on Security was obtained before entering the deal. The deal is for the 36 jets in fly-by condition and there will be no manufacturing within India either by HAL or Reliance — so, the question of the contract of HAL being given to Reliance is ludicrous.
The arrangements regarding the offsets follow the Rafael deal but are separate. And HAL is very much a party to the offset deal. In fact, the joint-venture of Snecma & HAL will be producing the aero-engine parts for Rafale’s M88 engine whereas Reliance will be producing some parts of a business jet.
What’s more?
Unlike the technology transfer limited to the licensed production of Rafale earlier, French companies will be entering the joint development of technologies and transfer technical know-how in a range of products and services, building a broad-based capacity in India.
Also, another fallacious objection is why Reliance, a supposedly new company in the field, was given a contract under the offset requirements? Well, why only Reliance? Most of the private Indian companies are new to defence sector manufacturing — to build them up is precisely the idea behind the offset! Also, Reliance is not exactly a neophyte in the defence sector. Anil Ambani's Reliance Defence and Engineering Limited has worked on the maintenance and service of the formidable 7th fleet of the US Navy.
Apart from a naval frigate it is building, it has produced offshore patrol vessels capable of offensive operations, with export orders in the bag. It is not difficult for Reliance to tap into its manufacturing and engineering experience and resources and redeploy them for aeronautics as it did with the creation of the new company. But here is the thing; offsets don’t need to be in aeronautics or related fields. They can even be in producing spare parts of other platforms!
The whole story of a scam or misconduct is built on quicksand — and the Opposition knows it.
But it doesn’t care as it is simply playing upon the socialist delusions of the public which itself prefers Airtel or Vodafone over BSNL — but has a strange love for HAL. It will stand for hours in queues for a Jio sim but somehow deems Reliance evil! And this socialist strain of the mistrust of private companies is what the Opposition is trying to cash in on.
All this anti-Rafale tirade is essentially an extension of the "suit-boot ki sarkar" jibe.
Vacuous — and unwarranted.