Vol. XLIII No. 12 March 24, 2019
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Rafale: The Noose is Tightening

THE more the prime minister and his government seek to brush off questions regarding the Rafale deal, the more they are getting embroiled in the quagmire of the murky deal. 

Ever since Prime Minister Modi went to Paris in April 2015 and announced the purchase of 36 Rafale fighter planes, instead of the earlier agreement to buy 126 planes, the deal has been enveloped by a veil of secrecy and controversy.

However, some facts became self-evident. The initiative for scrapping the old agreement and the decision for outright purchase of 36 planes in a flyaway condition was taken solely by the prime minister bypassing all regular procedures.  In this process, the Hindustan Aeronautics Ltd was replaced by the newly-formed Anil Ambani’s company as the major offset partner. The purchase involved no technology transfer to India.  Finally, the price of each aircraft saw steep escalation which the government sought to cover-up by refusing to provide any details of the pricing structure claiming it came under a secrecy clause.

From the French side came confirmation that it was the Indian government that suggested Anil Ambani’s company as the offset partner. The then French president, Francois Hollande, went on record stating this.

The Modi government has been vigorously denying all charges regarding the above and refuting them as baseless allegations. Now, however, the series of investigative articles in The Hindu by N Ram have stripped bare, layer by layer,  the edifice of lies and obfuscations. 

Firstly, Modi’s decision to buy 36 Rafale fighter planes shot the price up of each jet by 41 per cent.  The design and development costs for enhancement to the planes worked out to be more expensive as the size of the order was reduced from 126 to 36.  The official documents show that three out of the seven members of the negotiating team dissented on various aspects of pricing.  But they were overruled.  Thus, no serious effort was made to reduce the design and development costs for enhancements with regard to a lesser number of planes. 

Secondly, strong objections were launched by officials of the defence ministry with the then defence secretary himself noting on the file that “parallel negotiations” by the Prime Minister’s Office was weakening the stance of the negotiating team. It was on the intervention of the PMO that no sovereign guarantee, or, bank guarantee was insisted upon; instead a letter of comfort from the French government was accepted.  Dassault, the manufacturer of the Rafale plane, is a private company and without the relevant guarantees, there is no legal way to bind them to fulfill the contract.

Thirdly, in the intergovernmental agreement, which was signed, changes were made in the supply protocols with the anti-corruption provisions being dropped.  This would exempt the French suppliers of any charges of using undue influence, or, agents and commissions. The proposal to put the money released by the government of India  into an escrow account held under the charge of the French government to make further payments to the supplier company as per the terms and conditions of the intergovernmental agreement was also rejected.  In the absence of a sovereign guarantee, this would have been a safeguard to ensure that funds are released only on the basis of the terms and conditions being fulfilled.

Fourthly, the three domain experts on the negotiating team, submitted a strong dissent note at the the end of the negotiations which reveal that the terms of the agreement with reference to the delivery schedule of the aircraft in flyaway condition was not better than the one in the earlier agreement. This debunks the argument of the government that the urgency of requirement of aircraft for the Indian Airforce was met by the new agreement.

Apart from these revelations in The Hindu, based on official documents, other information is also emerging.  Anil Ambani had gone to France not only during the prime minister’s visit, but he had made a trip two weeks before to meet high level officials of the French defence ministry.  The National Security Advisor, Ajit Doval, had also played a key role in taking certain important decisions.

All these facts emerging from a meticulous investigation incriminates Narendra Modi’s role in getting this deal in favour of crony capitalists. Most shocking is the dropping of the anti-corruption clause in the agreement. French arms companies, state or private, have a notorious reputation for giving kickbacks and commissions to procure contracts. One example is the Scorpene submarine sales to India and Malaysia. In both cases, kickbacks were involved. So, to deliberately delete the anti-corruption clause and bring in a company with no record in defence production, as a partner, is a virtual advertisement for high-level corruption.

Just as in the Bofors gun deal during the Rajiv Gandhi government, all the stonewalling tactics of the Modi government are proving to be in vain. The noose is tightening around those responsible for this mega scam.

(February 13, 2019)