Rafale Scam: Former Defence Minister Breaks His Silence

The Rafale fighter jet purchase continues to demand answers while the BJP government hides behind a smokescreen of verbosity as well as damned lies. When the deal was negotiated by the Prime Minister Narendra Modi it was praised and sycophants had a field day with adulatory comments. BJP government claimed that they struck a better deal for a better price and better terms. When it became clear that there is no way a price of Rs 1700 cr per Rafale jet and even a bare frame deal for it at Rs 670 cr works out to be cheaper than Rs 526 cr per jet price negotiated by UPA II they tried desperately to ward off scrutiny by raising the bogey of “national security”. However, Prime Minister Narendra Modi negotiating directly with Dassault and the high price being paid and above all replacing public sector company with a crony corporate house just refuses to fade away. Questions have arisen as to the actual cost of the Rafale fighter jet purchase to India’s public exchequer. It has raised concerns as to how a public sector owned Hindustan Aeronautics Ltd was dropped and Dassault for all practical purposes told by the BJP government to choose a particular corporate house with questionable business practices, nil experience in military production, but had the merit of being a close corporate ally of the PM, thus passing on offset benefit worth Rs 29,000 cr to them. Questions have arisen over the per unit rice, bare frame as well as with add-ons, and how they compare with the prices UPA II was negotiating.

One person who remained silent all this while the scandal unfolded was the former Union Minister for Defense A K Anthony. He broke his silence by giving an interview to the Economic Times (27 February 2018), because the BJP’s Defence Minister accused him of “taking back the files” and delaying the deal which led to 300% upward revision in price. Defending himself and the UPA II government he explains that it was “unethical” on the part of Nirmala Sitharaman to be selective with facts. He explains that when the Ministry of Defence approached the Ministry of Finance for financial approval they, MoF, raised a red flag over “life-cycle cost clause” because of the cost to the exchequer over a longer period. He said that some opposition leaders including from BJP too had reservations on this. Therefore, “he took back the files” because the term of UPA II was coming to a close and with MoF disapproving there was no way to send the proposal to Cabinet Committee on Security. So he chose to “take the files back” to make a noting that without settling the issue of Lifecycle cost the proposal should not be sent to the CCS. He pointed out that this clause on Lifecycle cost was added on the insistence of the Indian Air Force and asked: “did the present government scrap the life cycle cost clause while agreeing to purchase 36 Rafale planes?”

He told ET that the deal which UPA government negotiated had provided for four conditions while issuing the Request for Proposal in 2007 for the purchase of 126 fighter jets. The four conditions were that India will purchase 18 aircraft and the rest 108 would be licensed to public sector HAL to manufacture; there will be complete Transfer of Technology; fifty percent offset obligations; agreement will have lifecycle cost clause. With the purchase of 36 fighters Rafael jets the first two clauses have been dropped, technology transfer to India and licensed production by HAL, therefore, the cost per fighter jet should be lower, rather than more, as it appears to be on the basis of facts available in public domain. [See Rafale Returns to Bite]

“This,” said AK Anthony “leads to another important question”. He points out that these four conditions formed part of the Defence Acquisition Council agreement and had to be scrapped if two of the conditions were to be dropped. Without this change, the new acquisition for 36 fighter jets would be in “gross violation” of the Defence Procurement Procedure.

Furthermore, he said that DPP has set out criteria for selection of private sector companies which includes a “credible track record in defence production – in this case, the fighter jet production”. Why is it that even the criteria set for DPP ignored in Rafale deal?

Setting the record straight he rejected the claim that revealing the purchase price per Rafale jet would compromise India’s national security by pointing out that as the Defense Minister he disclosed the pricing details of several defence purchases including Admiral Gorshkov aircraft carrier, upgrade cost of Mirage fighters and that of Sukhoi deal. He also insists that defence is under the ambit of Right to Information. And added that “(f)or long, all defence purchases in India were done behind the iron curtain….stonewalled questions on defence deals by citing national security”. In other words, when the BJP claims that they are doing what the Congress did in the past even on that score they appear to be less than truthful because under UPA much data as well as details became available in public domain regarding the defence deals and the debate around them became possible.

In short, the questions that the BJP government has to answer are if four conditions became two. Was the Defence Acquisition Council earlier four conditions scrapped or was this done post-facto in violation of DPP, if at all? Whether lifecycle cost clause was retained when purchasing 36 Rafale fighters? What is the per fighter jet cost if the total deal is valued at Rs 58,000 cr, bare frame and with add-ons? Most importantly, why was public sector HAL ruled out for servicing offset clause and instead of a corporate house close to the PM selected for the largess of Rs 29,000 cr? Finally, has “national security” under BJP become co-terminus with the gratification of a corporate house not exactly known for probity and integrity thereby compromising the interest of the country and its people.

Last has not been heard on this scam.