The Rafale Deal's Irregularities Aren't Going Away Any Time Soon

By downsizing the contract, all the NDA-II government has done is put the airforce through another painful five-year selection process.

The dogfight between UPA’s Rafale and NDA’s Rafale has turned into a daily ritual as the political slugfest continues. Like the surgical strikes politicised the army, airstrikes are politicising the air force.

For the second time in recent months, the French media (independent investigative journal, Mediapart) has reported that Anil Ambani’s Reliance obtaining the offsets contract was made ‘imperative and mandatory’ for Dassault, suggesting it was quid pro quo for the contract of 36 Rafale.

This is precisely what former president Francois Hollande – with whom Prime Minister Narendra Modi made a joint press statement on April 10, 2015, conveying India’s emergency decision to buy 36 Rafale in flyaway condition de facto cancelling the deal for 126 Rafale that had been stalemated during the UPA government – has said twice.

Also read: Internal Dassault Document Says Reliance JV was a ‘Trade-off’ for Bagging Rafale Deal: French Report

But Dassault, probably fearing losing even the diminished contract, has rebutted claims made by Hollande and Mediapart. The word of a former French president – who was party to the initial declaration of intent and later signed an MOU with Modi – is being dismissed lightly. The Dassault trade union has now come up with the same facts confirming the Reliance-for-Rafale quid pro quo.

A picture in a recent newspaper article showed Anil Ambani with his left arm wrapped around French defence minister Florence Parly’s shoulder at the foundation- stone – laying ceremony of Dassault Reliance Aviation Limited Factory in Nagpur in October 2017 along with Dassault chairman Eric Trappier, who said this week in the US that Dassault expects more follow up order on Rafale from India.

Dassault chief Eric Trappier (left), Anil Ambani and French defence minister Florence Parly at the foundation ceremony of Dassault Reliance Aerospace Ltd in Nagpur in 2017. Credit: Twitter

Meanwhile, the Congress has withdrawn a PIL from the Supreme Court (wanting to keep the JPC route open) but in response to an earlier PIL, the three-judge Supreme Court bench headed by Chief Justice Ranjan Gogoi has asked the government to outline its ‘decision making process and hand it over in a sealed envelope before October 29’.

Besides the question of pricing per piece of aircraft – provided in parliament by junior minister Subhash Bhamre as well outside it to the media by ministry of defence officials after signing of contract in September 2016 – likely to be probed by CAG, two issues are still germane to the Rafale controversy. These are whether due process was followed in the acquisition mechanism; and was Dassault pressurised into awarding part of the offset obligation (10% of 50% of the total contract) to Reliance’s Anil Ambani.

On the first issue, a former defence finance advisor told me recently that never in the several decades of his association with defence procurement had he known of such abnormality in the procedure for defence acquisition: decision to acquire Rafale being announced on foreign soil. India’s ace combat fighter pilot, AVM Kapil Kak declared on TV last month that due process was not followed before Modi made the surprise announcement in Paris.

No clearance was sought from the Defence Procurement Board/Defence Acquisition Council and Cabinet Committee on Security, as is clearly mentioned in Defence Procurement Procedure, eight revision in 2016. Defence minister Nirmala Sitharaman – who came into the game rather late, months after the contract was signed – is strenuously making a distinction between ‘declaration of intent’ (Modi’s April 10 announcement in Paris); signing of the MoU at New Delhi during Republic Day 2016 between Hollande and Modi; and the consummation of the contract in September 2016 between the two defence minister.

Only two CCS meetings were held (Bhamre informed parliament) and these were on August 24, 2016, and another on September 21, 2016, both relating to Rafale, the latter two days before signing the deal on September 23, 2016. Bhamre had informed Rajya Sabha that the 126 Rafale contract was cancelled on June 24, 2015.

Full Text: Complaint Filed With CBI Against Narendra Modi, Manohar Parrikar in Rafale Case

The decision to acquire 36, not 126 Rafale was arrived at without reference to DAC, no written consultation with IAF and sans approval of CCS. The first CCS met sixteen months after the Paris announcement. The government will explain this to ‘emergency acquisition in national interest due to dwindling combat strength of IAF’. The sealed envelope that will be submitted to the Supreme Court will say that CCS was needed before signing the contract as being explained by Sitharaman. It is the decision to acquire and sign an MOU which have to be ratified by DAC/CCS. Only two persons were  involved in the decision: Modi and NSA Ajit Doval. Then defence minister Parrikar, who is not in the loop, is quoted as having said: ‘he learnt about it from Doordarshan’.

As for how Anil Ambani was chosen by Dassault (Sitharaman: ‘I did not know about it’) more will likely be outed on this from Dassault/France. Note that Reliance Defence was registered in March 2015 weeks before Modi’s announcement in Paris. Reliance Aviation was registered on April 24, 2015. The offset guidelines were apparently changed in August 2015. 

But the question that requires an answer and is being skirted is: ‘if the UPA government could not seal the deal due to differences between Dassault and HAL why did not the incumbent government try and bridge the gap and seal the deal?’

That way IAF would have got 126 Rafale (7 squadrons) instead of 36 Rafale (two squadrons) and also ToT. Sitharaman would not have had to say about HAL which has produced 2,000 air craft that it cannot make  Rafale. Further, it would have avoided undergoing the painful five-year selection process of placing a fresh RFI in 2018 for 114 MMRCA from the same vendors which competed in the original 126 Rafale deal that  was scuttled. If Rafale emerges once again as L1 it would then be 36 plus 114 Rafale, a happy ending for many. The alleged irregularities over the Paris decision and accompanying Ambani offsets will not go away anytime soon.

Gen Ashok K. Mehta is founding member of the Defence Planning Staff, currently revamped as the Integrated Defence Staff.