Rafale Deal Raises Many Questions
THE Rafale deal was finally signed last week in New Delhi by the defence ministers of France and India in the form of an Inter-Government Agreement. This brings to an end the tortuous decade-long MMRCA (medium, multi-role combat aircraft) acquisition saga with numerous twists and turns.
36 Rafale fighter aircraft – 28 single-seaters and 8 twin-seaters – have been purchased outright and are to be supplied by Dassault (pronounced dasso) Aviation in fly-away condition, with deliveries scheduled to start 36 months from now and be completed in the 67th month, along with penalty clauses for delays. Contrary to reports in a section of the press, the deal does contain an option for India to buy an additional 18 aircraft at the same price plus inflation, but there are no indications that India is likely to exercise it. The current acquisition will equip two squadrons of the Indian Air Force (IAF), to be based probably in the North and North-East of the country.
Total cost of the deal is €7.87 billion (US$ 8.82 billion) or approximately Rs 56,000 crores. The basic aircraft is said to cost about €3.4 billion, the balance covering weapons, simulators, spares, and performance-linked maintenance over five years ensuring 75 percent serviceability (ie, at least 27 aircraft are available for active duty at any time). The final price is considerably less than the €12 billion at which the inter-governmental negotiations is believed to have started, but a lot more expensive than the estimated $12 billion price tag for 126 bare bones Rafale aircraft at which the procurement process began in 2007. Even acknowledging that these prices are not really comparable since they refer to the aircraft variously with or without weaponry and other special customisations that India has apparently been demanding and finally got, as well as different degrees of technology transfer or indigenous manufacture, the final price tag is heavy indeed. It may not be the “mother of all deals,” but Rs1,200 crores per fighter with maintenance and add-ons is steep indeed.
The deal may finally be done, but leaves many questions unanswered.
First, the MMRCA acquisition began as an urgent response to the dire need felt by the IAF for filling the gap in both numbers and capability left by a rapidly depleting fleet strength, caused by sharp decline in Mig-21 numbers due to obsolescence and crashes, down from a sanctioned 42 squadrons (the IAF wishes for 45) to 32. With the induction of just 36 Rafales as against the originally envisaged 126 multi-role fighters, the IAF fleet would go up to just 32 squadrons after almost a decade! Where does this leave the Air Force in terms of both numbers and the roles that different aircraft types are expected to play?
Secondly, the original MMRCA tender, envisaged as outright purchase of 18 aircraft and phased indigenous production of 108 fighters, was designed not only to acquire a substantial number of aircraft but also to boost indigenous manufacturing capacity and, hopefully, also catalyse broader design-development capability through the knowledge gained. This concept also informed the Sukhoi-30 MKI deal with Russia under which most of the aircraft are currently made in India. The Rafale deal completely buries the “Make in India” idea and does not even provide for local assembly. The 50 percent offset clause remains, of course, but is expected to be used for some Rafale-unrelated local manufacture and export, and for unspecified special technological capability-building with hitherto unidentified Indian partners. The Rafale deal for just 36 aircraft to equip only two squadrons, with no potential for knowledge acquisition and no updating of the manufacturing base, is in the final analysis an unsatisfactory outcome.
Thirdly, as labyrinthine Indian defence acquisition processes go, a decade may be seen as par for the course. But given the fact that various amendments to the procurement procedures have been introduced over the years, supposedly to streamline the process and make it more transparent and less susceptible to whimsical decision-making and corruption, what does the Rafale deal tell us about our defence planning and procurement procedures? And can any changes be expected in the future?
AND THEIR ROLE
The MMRCA tender was floated for procuring a multi-role fighter that could undertake air combat as well as deep-penetration ground attack and reconnaissance missions, with the medium-weight specification implying ability to carry a good weapons payload. These abilities were perceived by the IAF to be important as they fit gaps in its fleet left by the obsolescence of the MiG-21s as well as MiG 23s, and the age of the effective Mirage 2000s which are also capable of delivering nuclear weapons. The Sukhoi SU-30 MkI of which over 200 are already in service with the Air Force is a heavy, air superiority fighter also capable of multiple roles and is viewed as constituting the backbone of the IAF over the next two decades.
Where India was feeling a shortage, was in long-range ground attack aircraft preferably with multi-role capability. India had a few squadrons of the 1970s vintage Jaguar strike aircraft that are on its last legs and the highly effective fourth generation Mirage 2000 from Dassault, the French predecessor to the Rafale and with which it shares several features, and which were also recently upgraded.
The 4G+ or fourth generation plus Rafale was selected after extensive comparisons with a number of other contenders, some of whom like the Swedish Saab Gripen and the USA’s Lockheed Martin F-16s were basically lighter primarily air combat fighters, the Russian Mig-35 was not found suitable and Boeing’s F/A18 Hornets being of an earlier vintage. The more contemporary mostly British Eurofighter Typhoon was shortlisted along with the Rafale and subjected to stringent field trials after which the Rafale was selected.
IAF test pilots found the Rafale quite decisively better and more suited to the desired role in the IAF fleet. One of the factors was clearly its long range, capability of its weapons suite and especially its multi-role capability, much acclaimed by IAF test pilots. While the nuclear capable Mirages are likely to serve the IAF well into the next decade, the Rafale seems a good fit besides also having strategic capability. The limited numbers in which India has acquired the Rafale, however, poses a serious problem.
It leaves the IAF with too many aircraft types in small numbers, all requiring separate training, maintenance protocols, spares etc, truly a logistical nightmare especially in times of actual conflict. It was precisely for this reason that the IAF wanted 126 MMRCA fighters so that it could work with more numbers of fewer aircraft types.
As of now, the indigenous Tejas Light Combat Aircraft is likely to enter service only around 1919 and be inducted into the IAF in sufficient numbers not earlier than the middle of the next decade. The Tejas LCA is also a very different type of fighter, being a lighter aircraft meant more for interception and air combat. This point has been forcefully emphasised by retired senior Air Force officers in response to remarks by defence minister Manohar Parrikar that the LCA would fill the gap left by the small numbers of Rafales procured.
With a further shortfall of 10-12 squadrons likely in the next few years due to attrition, the IAF faces a grave shortage of advanced fighters. Even though the defence minister has managed to push through this limited-number Rafale order citing shortage of funds in the face of IAF unhappiness, government is likely to face huge pressure for fresh procurement in the coming years.
Two scenarios are likely.
One is revival and acceleration of the programme to co-develop a Fifth Generation Fighter Aircraft (FGFA) along with Russia. The FGFA project has gone through sharp ups and downs, mainly due to fluctuating interest on India’s part, prompted in large part by growing doubts in the IAF about the deteriorating capability of Russian manufacturers for time-bound delivery and sustained after-sales support and spares. Of late, developmental costs expected to be shared between India and the Irkutsk Corporation (manufacturers of the Sukhoi range) have been sharply brought down to $4 billion, and Indo-Russian discussions have seen an uptick, which are likely to spur on progress on the FGFA of which 200-250 aircraft are likely to be required.
The second scenario has been hinted at by defence minister Parrikar who has often said that India was seriously considering a less expensive “Make in India” option. Ever since the MMRCA tender was cancelled and the intention to acquire fewer numbers of Rafales in fly-away condition was announced by India, the field is again crowded by the earlier-rejected manufacturers offering technology transfer and manufacture in India. Saab is offering the Gripen to be made in India in collaboration with the Tatas. Lockheed Martin has been making a strong pitch for its upgraded F-16s even though it does not fit the multi-role aircraft type the IAF is looking for. And Boeing is not so silently pushing the case for a souped up F/A-18 Super Hornet to be made in India. Given the inclinations of the present government, a late entry by the Americans should not come as a surprise!
The most problematic aspect of the Rafale order for the MMRCA acquisition process has been the flip-flops in planning and decision-making, and the fact that the elaborate and seemingly carefully crafted procurement procedures have been so cavalierly brushed aside by the powers that be. One wonders why nobody has cried foul and raised suspicions of malafide intentions. Maybe it is because the usual suspects, namely losing competitors, have been kept interested by prospects of re-entry!
The MMRCA acquisition went through an elaborate and quite transparent process. The Request for Proposals (RfP) was based on fairly well-defined Air Staff Qualitative Requirements (ASQRs), certainly going by earlier standards. Short-listing was well done and there were few if any complaints of obvious bias or subjective selections. And the field trials involving the selected two finalists were rigorous and apparently fair. The process was long, no doubt. It did also go through an initial period of uncertainties and mind-changes, notably when the “medium” weight criterion was added to the earlier MRCA, prompting the usual charges of biases and gerry-mandering, but once the dust settled on that, the process moved along smoothly. An aircraft type and numbers to be procured was carefully worked out and decided upon, in close consultation with the user service.
Suddenly, after the new government took office, the whole procurement went into a tailspin and, arbitrarily, by political fiat, the order was abruptly changed from 126 to 36 aircraft. No explanation has yet come from the defence minister for how the earlier decision was changed, what the rationale was, and what the opinion of different stakeholders was. In particular, what was the opinion of the Air Force and how was that factored into the final decision? If decisions can suddenly and arbitrarily be taken in this manner, presumably by the defence minister, where does the procurement procedure stand? If transparency is not maintained, even within the guarded precincts of the defence ministry, then how can the nation feel sure that extraneous factors did not play a role? Was that not the purpose of evolving procedures?
Apart from this, the procedures themselves leave much to be desired. The time taken is highly excessive, and involves too many people with little or no knowledge of the subject involved, in this case sophisticated military hardware. Almost a decade before the MRCA acquisition was mooted, a proposal to upgrade the Mirage aircraft and shift the assembly line to India was made by France. During the long period of dilly-dallying in India, Dassault closed its assembly line and the opportunity was lost. Even after that, the MRCA project has been under consideration since 2001! This is half the service life of a line of manufacture and aircraft can go obsolete in such a period, as has almost happened with the LCA!
Even once decisions are supposed to have been taken, it turns out that many more steps are involved. And this opens the door to many more twists and turns! How does it make sense that an aircraft, the Rafale, is declared the winner based on a combined technical and financial bid, and thereafter financial negotiations start? One can understand minor bargaining over add-ons, but haggling over basic price? No wonder Rafale prices went up. Once a winner is declared, the balance is tilted in his favour. Surely, the price, technology transfer, modalities of manufacture in India, all should be part of the tender and should be weighed for all applicants so as to decide on the winner. The procedure adopted by India makes little sense.
The Rafale experience suggests that long term planning and defence procurement procedures need to be thoroughly overhauled. And this applies doubly to building indigenous capability for manufacture and, even more important, for design and development which, as usual, have been given short shrift in the MMRCA project. If this is not done, India will continue to lurch from one ad hoc decision to another, and India’s defence preparedness and self-reliant capability will be the casualties.