All you need to know about the Rafale deal
Even as Rahul Gandhi attacks the Modi government over the NDA deal, the truth is that UPA failed to close the deal for seven torturous years before Parrikar stepped in. Writing for DNA, strategic affairs analyst and author Nitin A Gokhale explained why the Congress President’s allegations are off the mark.
The writer is a strategic affairs analyst, author and founder of BharatShakti.in, a specialised defence website. Views are personal.
1. Rahul Gandhi’s claims
)
Congress leader Rahul Gandhi essentially made two claims on the Rafale issue: First, the NDA government paid an inflated price as compared to the UPA’s price for the fighter jets and two, the government favoured a private company over the Defence Public Sector Unit, the Hindustan Aeronautics Ltd or HAL.
On both counts, the man who aspires to become the Prime Minister of India one day was economical with the truth.
2. UPA unable to close the deal
)
For one, the UPA government had been unable to arrive at a price for Rafale jets despite a tortuous seven-year-long process. In 2010, the evaluation committee of the IAF shortlisted two aircraft — the Eurofighter Typhoon and the Rafale aircraft fielded by the Dassault Aviation (DA) — after vigorous field trials and forwarded the recommendation to Defence Minister AK Antony. Antony took almost a year to accept the recommendation. It was already 2011.
3. Cautious Antony
)
The UPA government, with an overly cautious AK Antony as the defence minister, instead of imposing a deadline for the French manufacturer to comply with the terms of the RFP, dragged its feet and allowed Dassault Aviation to get away with obfuscation.
4. Parrikar enters picture
)
As the new political leadership was briefed about the impasse, MoD officials were told to try and break the deadlock as soon as possible since the IAF’s fleet of fighter aircraft was depleting alarmingly.
On November 10, 2014, meanwhile Manohar Parrikar took over as Defence Minister.
5. Depleting fighter jets
)
The number of effective squadrons was going down rapidly. Parrikar realised that another round of MMRCA kind of competition would have taken enormous time and effort.
So, he took the matter to the Prime Minister and briefed him about the necessity of procuring the fighter.
At the same time, Parrikar told Modi it would be legally untenable to go through with the MMRCA contract since the process had got vitiated completely, thanks to Antony’s indecisiveness and a crucial oversight in the original terms of the contract.
6. Parrikar drives a hard bargain
)
Under the circumstances, there was no alternative but to withdraw the original tender. Parrikar told Modi since the CVC (Central Vigilance Commission) guidelines provide that negotiations cannot be held with the competitor who has come second in the contract (L2 vendor in officialese), the only way was to scrap the tender and buy a minimum number of Rafale jets off the shelf to fill a critical gap in the IAF’s inventory.
The Cabinet Committee on Security (CCS) gave its approval to the new proposal before Modi left for Paris on April 9, 2015. Once the in-principle decision was taken, it was left to Parrikar and his team in the MoD to negotiate the eventual price for buying the 36 jets. Their confidence bolstered by the PMO, the Parrikar-led MoD drove a hard bargain with the French.
But it wasn’t until another 15 months later — in September 2016 — that India finally signed the contract.
7. Final negotiated price
)
The final negotiated price for 36 Rafale package, along with initial consignment of weapons, Performance-based Logistics (PBL), simulators along with annual maintenance and associated equipment and services was fixed at 7890 million Euros.
The average unit cost of Rafale aircraft thus turned out to be 91.7 million Euros (going by the Euro-to-rupee conversion rate at the time of signing the contract it meant each aircraft would cost Rs 688.30 crore and not Rs 1500 or Rs 1700 crore as quoted by some analysts).
Under the scrapped MMRCA, the French were asking for anything between 100 and 110 million Euros per aircraft and without India-specific enhancements.
8. More India-specific enhancements
)
The lower price apart, the Rafales for IAF will have 13 India-Specific Enhancement (ISE) capabilities which are not present in the Rafale aircraft being operated by other countries.
These enhancements will provide a significant capability edge to the IAF over India’s adversaries.
9. Rahul Gandhi – unaware or ignorant?
)
Clearly, Rahul Gandhi is unaware of these facts or is deliberately choosing to ignore the reality.
Also, to say a private company, allegedly close to the Prime Minister will stand to benefit because of nepotism, is also contrary to facts.
10. Congress hoping noise will prevail over facts
)
Dassault Aviation like any other original equipment manufacturer is free to choose its offset partners.
Several private companies and not just one besides the Govt of India’s Defence Research and Development Organisation (DRDO) will execute the offset obligations (supply defence industrial goods, or absorb some of the technology) and NOT co-produce Rafale as described by the uninitiated.
Clearly, the Congress is hoping that noise will prevail over facts.
