THE RAFALE DOGFIGHT
Defence deals have turned into political missiles for the BJP and the opposition Congress in recent years. If the BJP is pursuing the UPA-era (now cancelled) Rs 3,600 crore AgustaWestland VVIP chopper scam for alleged bribery leads to the Congress, the latter has spied an opportunity too. Congress president-designate Rahul Gandhi launched a fierce assault on the government on November 16, alleging a scam in the September 2016 deal for 36 Rafale fighter jets worth €7.87 billion (Rs 56,000 crore) signed between India and France. Rahul alleged the jets cost three times the price the UPA had negotiated for them, that Prime Minister Narendra Modi had bypassed the Cabinet Committee on Security when he announced the deal in Paris in April 2015, and that he’d overlooked public sector undertaking Hindustan Aeronautics Ltd (HAL) to favour Anil Ambani’s Reliance Defence Ltd,
which has no previous aircraft-making experience.
Rahul Gandhi didn’t supply proof of these allegations, but coming as they did ahead of the Gujarat assembly elections, his statements caught the government on the back foot. Defence Minister Nirmala Sitharaman called his allegations ‘shameful’ and Rahul Gandhi’s statements drew a rare rebuttal from French officials. The Congress kept up its barrage, nevertheless, baiting the government into revealing the unit cost of each aircraft. And there will certainly be some fireworks over this in the upcoming winter session of Parliament.
The truth, as usual, is more complicated. Dassault’s Rafale did finish ahead in a tortuous seven-year process to buy 126 jets. The UPA government had earmarked $10 billion (Rs 68,000 crore) for the deal in 2007, but the contract was never signed. By 2012, the price had ballooned to over $20 billion, twice the amount set aside by the government.
“The new deal was cheaper, it was to be delivered faster, on much better terms, with superior weaponry,” says a senior government official. Comparing the two deals, defence ministry officials say, is disingenuous because at €3.3 billion (Rs 23,000 crore), the actual flyaway cost of the 36 aircraft was just half the €6.8 billion (Rs 49,000 crore) contract signed in 2016. The remaining sum, they maintain, was to be spent on ground support equipment, the weapons package and unique requirements like creating parallel infrastructure for the Rafales in two air bases—Hasimara in West Bengal and Sarsawa in UP.
The 36 aircraft deal also came with a five-year ‘Performance-based Logistics’ agreement to ensure that nearly 75 per cent of the aircraft strength would be available at any point. (Less than 50 per cent of India’s Russian-origin Sukhoi fleet is thought to be available.) The first Rafales are to fly in by February 2020 and all 36 by 2022. The jury is out on whether the government’s vigorous defence of the aircraft brightens or dims Rafale’s chances in India. It’s in the fray to sell an additional 36 Rafales and 54 aircraft carrier-based variants of the aircraft to the navy. But what the fiasco underscores is the need for greater transparency in defence deals.
JET SET Anil Ambani (centre) after a flight in a Rafale jet at the aero show in Bengaluru