THE UNFOLDING RAFALE SCAM

The Modi Government has completed four years and two months in office. In these last fifty months, the only notable contribution of the BJP Government is the everyday innovation of newer wordplays and slogans – which all turn into jumlas. That is the best of which the Modi raj is capable. The BJP won the 2014 election highlighting the corruption under the previous UPA regime. The Prime Minister Narendra Modi in his poll speeches repeated his gimmicky slogan – Na Khaunga, Na Khaane Dunga. But what is the reality?

Cronyism and corruption have become the hallmarks of the Modi Government in the last four years! The Rafale fighter jet deal by the BJP Government with the French company Dassault Aviation is turning into the mother of all defence scandals.

Let us look at the facts

The previous Rafale deal that the UPA Government was making involved buying 126 Rafale jets for Rs 54,000 crore – 18 of which would be in a ready-to-fly condition while the rest would be manufactured by the public sector Hindustan Aeronautics Limited (HAL) using technology that Dassault would be obligated to transfer. This deal was cancelled, and overnight the new deal signed by the Modi Government on 10 April, 2015 instead obtained 36 jets (in a ready-to-fly condition) at Rs 58,000 crore, MINUS the transfer technology. Anil Ambani, owner of the Reliance Defence Limited (RDL) Company, registered just 2 weeks before the deal (28 March, 2015) accompanied Prime Minister Modi on his France trip and secured the “offset contract” and “partnership” with Dassault instead of experienced public sector company HAL.

The whole deal raises many questions:

1.  If our Air Force needed 126 jets, why was the number reduced to 36 by the Modi Government? Who revised the number and why?
2.  Why was the Modi deal price so much steeper – two and half times the price negotiated by the UPA Government – for far fewer jets and zero technology? Qatar had purchased 12 Rafale fighter jets in November 2017 for Rs 694.80 crore per aircraft, according to current exchange rates. Modi government’s per aircraft negotiated price is approximately Rs.1, 570.8 crore.
3. With the UPA-era deal, HAL would have manufactured most of the jets using transferred technology. With the Modi deal, the jets will no longer be manufactured in India, and we will remain dependent for technology on France’s Dassault. Why did Modi not allow HAL to ‘Make in India’?
4. Why was the experienced public sector unit HAL bypassed in favour of the two-week-old Ambani RDL which has zero experience in the defence sector?

The Bogey of ‘Secrecy’ 

The Modi Government’s ‘secrecy’ plea is being trotted out late to ward off the uncomfortable questions. Earlier, the same Government had, soon after the deal, given defence journalists a detailed briefing on the price break-up, claiming that the Rafale aircraft cost just Rs 670 Cr and the remaining more than Rs 900 Cr was for some mysterious “India specific upgrades” of weapon systems. The MoS Defence had also revealed the price in Parliament in November 2016 (Times of India, 7 Feb 2018).  Prashant Bhushan compared this by saying “that your car cost 10L but the seat costs 20L.”

Even the Defence Minister, Nirmala Sitharaman, in her Press Conference on 17 November 2017 assured that the exact price of the 36 Rafale jets would be made public.

However, soon after, on the floor of the parliament, the Defence Minister backtracked saying that price can’t be revealed because of a “secrecy clause” and  that it would impact national security! This is rubbish.

The Rafale Deal secrecy clause cites the 2008 security agreement between India and France which is aimed at protecting “classified information” which “could impact security and operational capabilities of the defense equipment” – it does not prevent disclosure of the sale price. The French Government also has made it clear that the Modi Government is free to tell the Opposition details of the price. (India Today, 8 March, 2018)

What is the Government hiding in the name of “secrecy clause” then? Whom are they trying to shield with these excuses?

Blatant Violations of the Defence Procurement Procedure

The Rafale Deal is not only marred by a massive loss to the public exchequer, but there were also unashamed violations of the procedure of defense procurement. As per the Defence Procurement Procedure, Contract Negotiations Committee (CNC) and Price Negotiations Committee (PNC) have to first make price discovery before the announcement of any purchase. There must also be sanction from the Cabinet Committee of Security to change the previous Rafale deal. In this case of announcement of purchase of 36 Rafale Aircrafts by the PM on 10 April, 2015, no procedure of price discovery had been followed. There was no sanction from the Cabinet Committee of Security (CCS) when the deal was announced.

Why did the Modi Government violate the well-established Defence Procurement Procedure? And, the Government has not uttered a word about the rationale behind the scrapping the previous deal and initiating an arbitrary new one during Modi’s France visit.

Offset Contract: Ambani’s Interest over Country’s Interest

Let us point out that, Dassault Aviation had already signed a pact with India’s Hindustan Aeronautics (HAL) on 13 March 2014, over workshare for the 126 Rafale fighters that the country had agreed to buy.

However, in course of Modi government’s renegotiated deal in 2015, the earlier contract with HAL was given a silent burial. Instead, Anil Ambani of Reliance Defence Limited (RDL), accompanying the PM on his France trip, secured offset contracts and a partnership with Dassault! Why did the BJP Govt promote the interests of a private corporate entity over a public sector undertaking?

HAL is the only Indian entity which has decades of experience of building aircrafts. How was HAL by-passed in favour of Reliance, when Reliance had zero experience of building fighter aircrafts? Is it not a blatant compromise with the security of the country?

The Curious Case of the Reliance Aerostructure Ltd

The Rafale deal by Modi Government clearly indicates a massive loss of public exchequer, gross violations of established defence procurement procedure and unashamed compromising of the country’s security. Recently, several other shocking details of the Rafale scam have come to light. There is another Reliance subsidiary company, Reliance Aerostructure Ltd. The Defence Ministry provided the license to manufacture fighter aircrafts to this company. But shockingly, the company did not own any land or building on the date of the license (22nd February, 2016). So how did it get the license to manufacture fighter aircrafts? Did the Government even cross-check these basic facts before granting license? 

Another important fact is that the Reliance Aerostructure Limited came into being on 24th April, 2015 – just 14 days after Modi Government’s deal with the Dassault Aviation.

So, one Reliance company was registered just two weeks before the deal and another came into existence just two weeks after the deal and got the contract. Wah Modiji wah! Kya yaari hai Modi aur Ambani mein?

Gross Violations of Offset Contract Guidelines: Lies and Cover-ups

Several appalling new facts have also emerged about the Defense Offset Contract. It is now clear that from the arbitrary announcement of purchase of Rafale jets by Narendra Modi to the defense offset contract, all the guidelines were blatantly flouted to favour Ambani, jeopardizing the country’s security.

Reliance Defence Limited (RDL) through a press release of 16 Feb 2017, claimed that it has secured the Offset Contract from Dassault Aviation for Rs.30,000 crore and a consequent Lifecycle Cost Contract of Rs 1 Lakh Cr. The Dassault Aviation too, in its Annual Report 2016-17, mentioned about the offset contract.

But on 7 February, 2018, the Defence Minister Niramal Sitharaman, in a PIB release claimed that the “no Indian Offset Partner for the 2016 deal for 36 Rafale Aircraft has been so far selected by the vendor”!!!!

•  So, is the Defence Minster not even aware of such an important contract worth 1 lakh 30,000 crore?
•   Can Reliance and Dassault Aviation sign such huge ‘offset and life cycle cost contracts’ without the approval of the Defence Minister?
•  Or is she just blatantly lying in a desperate bid to cover-up this shameful and inexplicable offset contract favouring junior Ambani?

Further, the Defence Ministry has strict guidelines for any defense offset contract. For example, all offset proposals must be approved by the Defence Minister, progress of offset contracts must be audited on a six-monthly basis by a nominated officer of the Defence Offset Management Wing of the Ministry etc. If the Defence Minister is not even aware of the contract, how did Ambani’s company manage to acquire it violating all guidelines?

But who will expose this scam: the blatant Modi–Ambani nexus, looting people’s money and jeopardizing the country’s security? Journalists covering these instances of blatant cronyism are threatened, while much of the ‘Godi Media’ (lapdog media) plays diversion tactics, running stories to fan up communal prejudices and also fake news on these scams rather than doing their job of demanding answers from the Government on such corruption.

It is up to all of us to expose and resist the Company Raj of the Modi Government which has become synonymous with cronyism and corruption.

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