Is Rafale NDA’s Bofors?

Published : Feb 01, 2019 10:08 am | By: M D Sridharan

As the general election is nearing, the “culture of corruption” continues to be the main focus of the political parties. As the country’s two national parties the Congress and the BJP are gearing up for a pitched battle, corruption remains as an important

As the country is gearing up to constitute the 17th Lok Sabha and the incumbent Prime Minister Narendra Modi and Bharathiya Janata Party is seeking a second term in high office, compared with the scam tainted UPA regimes, Modi’s government is successfully nearing the completion of its five year tenure without any major scam. The hallmark of the NDA government under Modi is that so far none of the Cabinet Ministers as well as the top echelon of BJP were found to be involved in any scam.

 

It is indeed highly refreshing for a country where it is not uncommon for its rulers to get involved in a spate of corruption and lootings. With such an impeccable record, Modi looked unbeatable until a few months ago and was certain to enact his 2014 magic.

 

But, Congress President Rahul Gandhi has taken up the “Rafale Deal” as the potential weapon and is pulling all strings to attack Modi and paint him as “corrupt”. The Congress is keen on making the Rafale jet deal as BJP’s Bofors. For the last couple of months Rahul Gandhi has been claiming to have come out with startling revelations on the Rafale deal and continue his tirade against Modi and BJP. In effect, Rahul Gandhi has made the Rafale deal   as the main political campaign and in the process the fulcrum of his 2019 campaign.

Rafale Fighter Jets

Actually the journey of  “Rafale Deal” commenced way back in 2007 when the UPA initiated the process to buy a fleet of 126 Medium Multi-Role Combat Aircraft (MMRCA) manufactured by France based Dassault Aviation.  Rafale is a twin-engine multi-role fighter jet and is considered one of the most potent combat jets globally. The Indian Air Force proposed to buy Rafale fighter jets which were cleared by the Defence Ministry, headed then by Congress leader A.K. Antony.

Moreover, Indian government also had several other aviation manufacturers of international repute in the pipeline.  As the  Indian Air Force  was keen on revamping its fleet,  six renowned aircraft manufacturers competed to bag the contract of 126

fighter jets, which was touted to be the largest-ever defence procurement deal of India. The contenders for the mega deal were Lockheed Martin's F-16s, Eurofighter Typhoon, Russia's MiG-35, Sweden's Gripen, Boeing's F/A-18s and Dassault Aviation's Rafale.

Finally after long-drawn processes that include several rounds of discussions, bids were opened in December 2012. All aircraft were tested by the IAF and after careful analysis on the bids, two of them — Eurofighter and Rafale — were shortlisted.  In the end the UPA government zeroed in on Dassault Aviation as they were the lowest bidder and also Rafale jets were said to be easy to maintain.  It was decided that 18 aircrafts were to be manufactured in France and 108 in India in collaboration with the Hindustan Aeronautics Ltd.

Subsequently, the UPA government had several negotiations with Dassault on prices and transfer of technology that continued till early 2014 but the deal could not go through. Though the UPA government did not officially announce the value of the deal, it was estimated that the size of the deal would be USD 10.2 billion (Rs.54,000 crore).

Despite such long negotiations which have been on for almost four years, the agreement was signed only in January, 2018. One of the main reasons for such long delay is the elections. Both India and France witnessed national elections and also a change in government during that time.  Also, the UPA government continued to negotiate on the final pricing and could not reach on the financial aspects before the elections.

Finally, after NDA came to power in 2014,  Narendra Modi, during his visit to France as Prime Minister in April, 2015, announced that India will purchase Rafale jets in a government-to-government  agreement. Instead of the original proposal to buy 126 Rafale Jets, Modi government scaled it down to 36 jets. But the deal was finalised on the basis of the procurement procedure followed under the UPA government.

Soon a joint statement by Prime Minister Modi and then French President Franois Hollande was issued which said that India and France agreed to conclude an Inter-Governmental Agreement for supply of 36 Rafale jets on terms that would be better than conveyed by Dassault Aviation as part of a separate process underway.

The statement said the aircraft and associated systems and weapons would be delivered on the same configuration as had been tested and approved by Indian Air Force, in clear reference to negotiations and testing process for the Rafale jets under the UPA government. Finally, India and France signed a Euro 7.87-billion (Rs 59,000 crore approximately) deal on September 23, 2016 for 36 Rafale jets. The delivery of the aircraft will start from September 2019.

Allegations and Accusations 

Despite the deal was finalised on the basis of the procurement procedure followed under the UPA government, the Congress has been accusing massive irregularities in the deal.

The main allegation of the Congress party is that the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government. The party also claimed that Qatar had purchased 12 Rafale fighter jets in November 2017 for USD 108.33 million per aircraft (Rs 694.80 crore). So the price of Rs.1670 crore is far higher.

The Congress has also sought to know price details of the aircraft, but the government has refused to share the details, citing a secrecy clause of a 2008 pact between India and France. Congress' A K Antony, who was defence minister in 2008 when India and France inked an inter-governmental agreement (IGA) on defence procurement, said the government's claim that the secrecy clause was forcing it to not reveal price details of the deal was "totally wrong".

Congress has also alleged the government was benefitting the Reliance Defence Ltd (RDL) which was formed just 12 days before the announcement of the Rafale deal by the prime minister on April 10, 2015 and through the deal RDL has set up a joint venture with Dassault Aviation to execute the offset obligation for the Rs 59,000 crore deal. However, RDL has rejected all the charges. Besides, the Congress party has also demanded answers from the government on why state-run aerospace major HAL was not involved in the deal. 

Former Finance Minister P Chidambaram has accused BJP that by agreeing for 36 Rafale aircrafts against 90 fighter aircraft that Indian Air Force desperately needed, the BJP has compromised national security. He has also accused that the BJP has purchased two squadrons that will cost about €25 million more per aircraft. “At the 2016 exchange rate, €25 million is equal to Rs 186 crore and India will pay Rs 186 crore more per aircraft. The windfall to Dassault is highly questionable and also undeserved. It was certainly not through as per negotiation, it was a deliberate decision,” Chidambaram said.

Chidambaram cited a media report that claimed conflicts in the price negotiation for providing 13 India specific enhancements that include both hardware and software to make the 36 aircrafts fully fitted and combat ready. The report also accused Prime Minister Narendra Modi’s decision to buy 36 Rafale fighter jets instead of the 126 asked for by the Indian Air Force has pushed the price of each combat-ready aircraft up by 41.42%.  The report said that it was the National Democratic Alliance government’s acceptance of the cost of €1.3 billion claimed for the ‘design and development’ of 13 India Specific Enhancements (ISE), and the distribution of this ‘non-recurring cost’ over 36 instead of 126 bare-bones aircraft, that was the major reason for the big increase in price.

Congress’ Poll Campaign

Congress President Rahul Gandhi has made the “Rafale Deal” as the prime issue to take on Prime Minister Narendra Modi. The Gandhi scion has accused that “corruption” was the main plank on which the prime minister came to power, but now he is doing the same. He has levelled allegations against Prime Minister Narendra Modi on being corrupt. He continue to openly taunt  'chowkidar chor hai' at Modi and has gone on record several times in the past couple of months that Narendra Modi is corrupt and will face charges of 'wrongdoing'. Clearly Rahul Gandhi sends the message loud and clear. The Rafale deal remains the primary agenda for the Congress and its chief Rahul Gandhi, who is spearheading the entire campaign against the prime minister and is using it as their Brahmastra”.

Way back in 2013, Narendra Modi had charged the Manmohan Singh-led UPA government, the Congress party and the Gandhi family with numerous allegations of corruption. Then he had said that the UPA regime is “addicted” to corruption and had vowed to eradicate the “culture of corruption” after coming into power. Using Rafale deal, Congress is determined to "break the perception about the corruption-free image of Prime Minister Narendra Modi." Congress has warned that the Rafale Deal is just the beginning and there is a lot more that will be revealed over the course of the coming weeks with different other contracts that the NDA finalised.

The Congress has already hit out that people are bearing the brunt of Modi’s policy failures such as GST and Demonetisation and blamed it as the main reason for the alleged collapse of Medium and Small Scale industries which further resulted in increased unemployment. Rahul Gandhi also repeatedly alleged that on the farmers’ issues that the government waived loans given to corporate, but claims to not have enough money to waive off farmers’ debts.

BJP’s Clarifications and Refusals

Around two years back, Minister of State for Defence, while replying to a question in Parliament, had said the cost of each Rafale aircraft is approximately Rs 670 crore but did not give details of prices of associated equipment, weapons and services.

Later, the government refused to talk about the prices. It has been maintaining that the cost of 36 Rafale jets cannot be "directly compared" with the original proposal to buy 126 combat aircraft as "deliverables" were significantly different.

Finance Minister Arun Jaitley accused Congress and its leader Rahul Gandhi of "peddling untruth" and carrying out a "false campaign" on the deal. He said that Rafale deal protected both security and commercial interests of India.

Arun Jaitley said that Rafale deal protected both security and commercial interests of India. Security interest because it increases the combat ability of India and commercial interest because the final price was significantly lower both for an aircraft and weaponised aircraft than what was negotiated in 2007 and 2012 under the UPA regime. “.All the figures by the government are correct and all the figures by Rahul Gandhi are false. The truth has only one version and falsehood has many. That is why Rahul Gandhi quoted several figures.” Arun Jaitley added.

Defence Minister Nirmala Sitharaman said  that the Congress’ writ petition in relation to Rafale deal does not hold any significance. She pointed out that the Supreme Court has gone through each one of the prospects that have been questioned, whether it is the decision making process or the pricing or the selecting the offset partners. Supreme Court in its verdict has clearly mentioned that the country cannot afford to be underprepared in a situation where our adversaries have acquired higher capabilities. Quoting the Supreme Court’s verdict, Defence Minister said that it had examined closely the price details and comparisons of the pricing of the basic aircrafts along with the escalation cost.

On the accusation by Rahul Gandhi that Modi government has ignored HAL,   Nirmala Seetharaman shot back saying:   Why did UPA signed with Augusta Westland and not with HAL for the VVIP choppers? She said that the government is not in a position to detail the weaponry clause as it is against the secrecy clause. Further  she  also clarified secrecy clause as per the IGA is the same as the umbrella secrecy clause of UPA in 2008.She clearly stated that every procedure is being followed  be it the approval of the  technical  committee and  the  cost escalation committee  involving the professionals of the IAF and  it was not done politically. She also asserted that IGA is like a sovereign guarantee and when we the two governments have signed what is the need for an additional sovereign guarantee. What we shied away is only the weaponisation part which is legally binding as detailing the same will amount to opening up the risk of national security, she asserted. She wondered whether these parties were becoming pawns in the corporate rivalry and whether the procurement of 36 fighter jets was being "sabotaged". She accused the opposition of doing a "disservice" to the nation by misinforming the public on the Rafale fighter jet deal.

Rafale is not Bofors

In the past, the country has witnessed several controversial Defence deals and some of them have become major political scams. While Congress is going all out to paint the Rafale jet deal as BJP’s Bofors,  BJP is doubly careful to not to allow Congress to succeed in its campaign.  Though the Congress is determined to mark the Rafale deal as a scandalous one, their campaign on Rafale has its limitations.

Furthermore that the Congress president has claimed that he, unlike Prime Minister Narendra Modi, is not “scared” of taking questions from the media. But there are indeed certain media houses that are always reluctant to fact-check the Congress President’s claims and hold him accountable for his words.

Speaking in the Parliament on the Rafale issue, Rahul Gandhi referred to a controversial audio tape which he claimed is the “recorded conversation” of Goa health minister Vishwajit Rane “revealing” details of “secret Rafale files stored in Goa chief minister Manohar Parrikar’s bedroom”. The Congress president sought permission to play the tape in the Parliament which was turned down by the Speaker Sumitra Mahajan.  Arun Jaitley challenged Rahul Gandhi to play the audiotape if he is convinced that the clip is authentic? He urged Rahul Gandhi to take responsibility and face expulsion from the House under a privilege motion is the tape is found to be false. Faced with the challenge Rahul Gandhi, who appeared inconsistent with facts, immediately backtracked. Both Rane and Parrikar have questioned the authenticity of the tape. Goa Chief minister Parrikar later tweeted: “The audio clip released by the Congress party is a desperate attempt to fabricate facts after lies were exposed by the recent Supreme Court verdict on Rafale. No such discussion ever came up during Cabinet or any other meeting.”

On three contentious issues raised by the Congress and made into subject of the petitions against the government, the Supreme Court cleared the deal. The CJI-headed Bench, also comprising justices SK Kaul and KM Joseph, found no occasion to doubt the decision-making process in the multi-billion dollar deal, observed that there was no substantial evidence of commercial favouritism to any private entity on the issue of offset partner and found no merit in claims that there was huge escalation of costs.

In conclusion, the judgment stated: “In view of our findings on all the three aspects, and having heard the matter in detail, we find no reason for any intervention by this court on the sensitive issue of purchase of 36 defence aircrafts by the Indian government. Perception of individuals cannot be the basis of fishing and roving enquiry by this court, especially in such matters. We, thus, dismiss all the writ petitions, leaving it to the parties to bear their own costs.”

Rahul Gandhi also stated that the figure of Rs 30,000 crore worth of offsets were given to Anil Ambani’s company, despite the facts of Rafale deal have been discussed threadbare over countless forums. A Supreme Court bench, headed by Chief Justice Ranjan Gogoi dismissed PILs seeking a court-monitored probe, saying it has no objections to any part of the deal. On the offset clauses, the judgment stated: “We do not find any substantial material on record to show that this is a case of commercial favouritism to any party by the Indian Government.”

The offset clause - as laid out during the UPA rule on defence purchases from foreign companies- requires Dassault to make purchases in India for 50 percent of the contract value. Therefore, if the total value of the deal is worth Rs 58,000 crore, half of that amount comes to around Rs 29,000 crore. Now, since Anil Ambani’s Reliance Defence is one among around 120 offset partners for the deal, their total business share won’t exceed 3 percent of the total Rs 29,000 crore Rafale offset contract. Finance Minister Jaitley also clarified it in the Parliament that it won’t be more than Rs 800 crore. Besides, the other offset partners include some of India’s highly reputed corporate houses such as DRDO, TATA, Mahindra and HAL as well.

Further, when most of the facts are clear and are also available in the public domain, it is strange to find how does Rahul Gandhi justify his charges? On what basis the Congress president is accusing the prime minister of dishonesty and stealing? If he has clinching proof of Modi’s wrongdoing, then why cannot he bring the same to the notice of the court or make it available in the public domain?

Rahul Gandhi has always attacked the Prime Minister to be in a crony relationship with couple of Gujarat based businessmen. He accused Modi to have favoured Anil Ambani in the Rafael deal as an offset partner as well and also stated that Anil Ambani’s group is in deep distress financially. If it is so, why should Modi insist on RDL as he might as well go for a better deal with so many other companies who are financially much stronger? Also, none of the BJP leaders have neither questioned nor rebelled against the RDL as an offset partner.

Looking back,   VP Singh, who was very much a Cabinet Minister under Prime Minister Rajiv Gandhi openly criticised him on the Bofors deal. Further, today there is no leader with V.P. Singh’s moral authority in Congress to take on the BJP.  V.P. Singh was not only personally incorruptible but also gave up his cabinet position to fight against Rajiv Gandhi. But, today it is a fact that both the Mother and the Son are out on a bail in the National Herald case, besides the shadow of Bofors and many other scams hangs over them.  Everyone knows that UPA –II was marred with scams after scams.

Even the harshest critics of Narendra Modi  cannot declare that Rafale has become his Bofors. But, still the opposition believe they are on their way and using it as the powerful Brahmastra to bring down Narendra Modi, who remained unbeatable till a few months ago.

Modi’s graph may have in declined a bit in the recent months,  but he is not as unpopular as Rajiv had become by 1988. Moreover, a vital difference between Bofors and Rafale is that everyone acknowledged that Rafale is the best fighter jet to buy.  Where as in Bofors case, it was found out be sub-standard. There were reports that when the troops fired the first Bofors gun, it fired backwards, killing many of their own. More importantly, unlike in Bofors deal, no kick backs were paid in the ongoing Rafale deal. On the whole it exposed the opposition’s desperate attempts to equate the Rafale deal with that of Bofors and making it a key weapon in its arsenal against the Modi government.

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