Political Economy

Changing Rafale Deal at Last Minute Violated Established Rules: Shourie, Sinha and Bhushan

The trio has alleged that the manner in which contract was downsized and changed at the last minute violated the authority of the India air force and its categorisation committees. They also questioned the role of Reliance as an offset partner.

New Delhi: The controversy surrounding the Rafale deal intensified on Tuesday with advocate-activist Prashant Bhushan and former BJP leaders Yashwant Sinha and Arun Shourie raising a fresh set of allegations on the timing and procedure of the aircraft deal.

In particular, the trio has alleged that the manner in which contract was downsized and changed at the last minute violated the authority of the India air force and its categorisation committees, which are the only bodies that allegedly have the power to determine the number of aircraft required and the category under which the procurement would proceed.

Over the last few months, the 36-fighter-jet deal has been a source of political controversy, with opposition political leaders and civil society activists having raised questions over the contract’s secrecy, its twists-and-turns and the last-minute inclusion of Anil Ambani’s Reliance Defence as an offset partner.

The Congress, for instance has held a series of press conferences to highlight what it claims are irregularities and cronyism in the deal finalised by the BJP-led NDA government.

Bhushan, Sinha and Shourie had last month held a press conference of their own in which they pointed out multiple instance in which regulations were allegedly bypassed, leading to what they claimed a “great loss to the exchequer” and the jeopardisation of India’s national security.

Tuesday’s press conference, however, focused on the manner in which the deal was pushed through and the role of Reliance as an offset partner.

“Mr Modi usurped the authority of Services Head Quarters to decide the number of aircraft required and the authority of the Categorisation Committee to determine what would be the category under which the procurement would proceed,” a statement released at the press conference said.

All defence capital acquisitions, Bhushan said, are based on “service qualitative requirements” (SQRs) a set of asks that are prepared through a consultative process involving “many agencies and experts”. The Rafale deal is no exception.

Once the SQRs are prepared, a categorisation committee decides under what method the acquisition should proceed – whether it should bought from an Indian or foreign vendor, or whether it should made in India.

“The Prime Minister, the Defence Minister, or the NSA… have no jurisdiction or authority or discretion to decide the categorisation to be adopted. Therefore, when the Prime Minister, in a span of just two days, decided to junk the ‘Buy and thereafter Make in India by HAL under Transfer of Technology’ route, he did so without authority. His unilateral decision to COMMIT the IAF to the least preferred category, was without authority,” the trio noted in a statement.

Based on this, Shourie, Bhushan and Sinha used their press conference to ask a series of questions: “Given that the IAF chief was clueless about the new deal, it is clear that the proposal to initiate a deal under which just 36 planes would be procured did not originate in IAF Services Head Quarters. So where did the proposal originate? Does there exist an SQR from the IAF stating that they need 36 planes? If it exists, what is the date of the said SQR? Was it issued prior to or post the announcement committing IAF to 36 planes and presenting a fait accompli?”

The trio also added that while the defence procurement policy allows for a special fast-track procedure, even those requirements and processes were not fulfilled before the 36-jet-deal was announced. Credit: PTI/Subhav Shukla

The Modi government’s response to this line of questioning, in the past, has been to indicate that the 36 Rafale jet deal was based on an intergovernmental agreement (IGA) due to the urgent need to fill the IAF’s fleet requirements.

This is why the defence acquisition council’s (DAC) permission was taken only a month after the deal was announced.

Bhushan, Sinha and Shourie however believe that even with an IGA, the Centre “does not have the authority to choose the quantities to be procured, or categorisation, or any ‘enchancements’ that are not already a part of the acceptance of necessity”.

“By specifying the number of aircraft to be bought and by specifying the categorisation to be adopted—i.e. Buy (Global) with no Make in India — he foreclosed the discretion of several institutions and presented them with an illegal fait accompli,” the statement noted.

The trio also added that while the defence procurement policy allows for a special fast-track procedure, even those requirements and processes were not fulfilled before the 36-jet-deal was announced.

“No proposal was prepared as required under the [fast-track] policy to overturn the original decision and instead go in for 36 “ready to fly” aircraft. No emergent meeting of the Defence Acquisition Council was held at which the decision was taken to overturn the proposal that had been finalised after the most thorough examination and the widest consultation,” they added.

Reliance and offsets

The former BJP leaders also pointed to the recent defences mounted by Anil Ambani and finance minister Arun Jaitley. As The Wire has extensively reported and analysed, both Ambani and Jaitley have sought to make two main points: the first that the Indian government not only has no role in selecting an offset partner but are also officially ignorant of the fact that Dassault Aviation and Reliance Defence have tied up to execute the Rafale contract’s offset obligations.

The second point that both men have sought to make is that whatever Dassault and Reliance do end up doing, none of their work will involve manufacturing even a “single screw” on the Rafale jets that the Indian air force will end up using.

Quoting India’s defence offset guidelines, the trio have noted that the Modi government cannot claim that offset ignorance is a “falsehood that just cannot be maintained”.

“For the Government and Mr. Ambani to now claim that it is not — and under the regulations is not required to be — aware of the details of the Indian Offset Partners is a falsehood that just cannot be maintained in the face of mandatory requirements of the Guidelines,” their statement claimed.

“The Government has resorted to this patent lie solely to deflect attention from its culpability in the scandalous manner in which Reliance Defence was chosen as an Offset Partner and the HAL was kicked out as a result of the decision of the Prime Minister himself.”

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