Has the Government lost the perception battle on Rafale?

‘L’affaire Rafale’ has become the Achilles heel of the National Democratic Alliance (NDA) government. The incontrovertible truth is that in August 2007, the United Progressive Alliance (UPA) government floated a tender for the purchase of 126 Medium Multi-Role Combat Aircraft (MMRCA). The Indian Air Force found two aircraft technically equipped — the Rafale and the Eurofighter Typhoon. The tender had made it clear that all bids were to be inclusive of cost of initial purchase, transfer of technology, licensed production etc.

On December 12, 2012, Rafale emerged as the L-1 vendor with a publicly disclosed price of Rs. 526.1 crore per aircraft. Out of 126 aircraft, 18 were to come from France in a flyaway condition, with the remaining 108 aircraft to be manufactured in India by Hindustan Aeronautics Limited (HAL) with transfer of technology. In addition, there was a 50%-offset clause requiring Dassault Aviation to invest 50% of the contract value by way of investment in India. On March 12, 2014, a ‘workshare agreement’ worth approximately Rs. 36,000 crore was signed between HAL and Dassault Aviation; 70% of the work on the 108 aircraft to be made in India was to be done by HAL and 30% by Dassault Aviation.

Unilateral move

On May 26, 2014, the NDA government assumed office. Prime Minister Narendra Modi visited France on April 10, 2015. Two days before the visit, then Foreign Secretary S. Jaishankar stated: “In terms of Rafale, my understanding is that there are discussions under way between the French company, our Ministry of Defence, the HAL… We do not mix up leadership-level visits with deep details of ongoing defence contracts. That is on a different track.”

Two facts are significant here — one, there were ongoing negotiations between the Defence Ministry, Dassault Aviation and HAL for the purchase of 126 Rafale, 108 out of which would manufactured by HAL, and two, Mr. Modi would not be involved in this as the issue was of technical nature.

However, during his French trip, Mr. Modi inexplicably, and unilaterally, announced ‘off-the-shelf’ purchase of 36 Rafale aircraft at a cost of Rs. 1,670.70 crore per aircraft. Dassault Aviation disclosed this price in its annual report for 2016.

The price was more than thrice the originally negotiated price of Rs. 526.1 crore and would involve an additional outflow of approximately Rs. 41,000 crore. HAL was dropped. Interestingly, all this was done without even cancelling the original global tender for 126 fighter aircraft.

No spin can change perception

The fact that the technical specifications were identical in both cases and therefore, there was no case for a price increase is evidenced by the joint statement of April 10, 2015, issued by the then French President, François Hollande, and Mr. Modi which read: “[A]ircraft 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.”

The government proceeded to cancel the original tender only on June 24, 2015. Subsequently, the Defence Procurement Procedure of 2013 was retrospectively amended on August 5, 2015, in a very suspicious manner. Finally, the deal was signed on September 23, 2016.

The government refuses to disclose even the purchase price of the 36 Rafale aircraft, citing mythical ‘secrecy clauses’. Ironically, the said agreement nowhere prohibits disclosure of the commercial costs involved.

Since hard facts militate against the government, no amount of alternative facts, fake news and hallucinatory spin can transform the perception of it.

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