Rakesh Sood
From 126 to 36
There are 3 questions that the authorities needs to address to neutralise the snowballing controversy. The starting fourth dimension is the rationale for the proclamation made past times Mr. Modi, during his official take in to France, in Apr 2015, that Republic of Republic of India would purchase 36 Rafale aircraft inward a government-to-government deal, thereby scrapping ongoing negotiations amongst Dassault Aviation for 126 aircraft.
The procedure for acquisition of 126 aircraft to supervene upon a purpose of the aging fleet inward the Indian Air Force (IAF) had begun inward 2000. After prolonged deliberations, a Request for Information was issued together with based on the responses, technical specifications drawn upwards together with a global tender issued inward 2007 for 126 aircraft, amongst xviii to survive delivered inward flyaway status together with 108 to survive assembled past times Hindustan Aeronautics Limited (HAL) amongst gradually increasing domestic content. Six bids were received together with technical evaluations over 4 years led to the short-listing of 2 — the Eurofighter Typhoon together with the Rafale. Evaluation of fiscal bids inward 2011 led to the Rafale’s selection together with negotiations commenced amongst Dassault inward 2012.
The Indian Air Force forcefulness had reduced to roughly 32 squadrons against its authorised score of 42. Instead of fast tracking the negotiations, quondam Union Defence Minister A.K. Antony was indecisive, thereby prolonging the process. Negotiations were carried frontwards past times the Modi authorities together with inward the run-up to Mr. Modi’s visit, official statements indicated that negotiations were inward terminal stages. Inexplicably, these were jettisoned. Then Defence Minister Manohar Parrikar acknowledged that he was unaware of the decision. The determination for 36 aircraft was solely formalised past times the Defence Acquisition Council together with the Cabinet Committee on Security afterward the take in together with the formal cancellation of the negotiations for 126 aircraft announced inward the pump of 2015, generating speculation nearly the Paris announcement. Last week, a bench of the Supreme Court, headed past times the Chief Justice of India, Ranjan Gogoi, sought details of the ‘decision making process’ before the adjacent hearing on Oct 31.
The aircraft are to survive delivered betwixt 2019 together with 2022. Meanwhile, the authorities invited Expressions of Interest inward Apr 2018 for 110 fighter aircraft, 17 inward flyaway status together with the residue to survive assembled inward India, but assembly was non restricted to HAL. It has since received responses from the same half dozen manufacturers. This makes it clear that the shortfall volition non survive made upwards past times the indigenous Tejas aircraft which is suffering from delays together with cost over-runs (HAL has raised the cost of Tejas Mark I from ₹135 crore inward 2006 to ₹268 crore together with Tejas Mark IA, inward blueprint stage, is quoted at ₹463 crore).
The instant inquiry relates to pricing. Since the before negotiations for 126 aircraft were never concluded, a straightforward comparing is non feasible. Earlier negotiations did non encompass weapon systems or the functioning guarantees together with spares. However, since the Modi authorities boasted that it had negotiated a amend bargain together with promised to render details, it has right away been hoisted amongst its ain petard. It proudly announced that it had obtained a 50% offset task which would give a boost (nearly ₹30,000 crore) to the ‘Make inward India’ programme inward the defense sector. Perhaps, it failed to realise that the higher offset would survive factored into the aircraft price, driving it higher.
Number crunching
From the sketchy details provided, it would look that the full outlay is €7.87 billion (₹59,000 crore at 1 euro to ₹73.88). This includes cost of weaponry (€710 million) together with a functioning guarantee of 75% (current functioning score of the Sukhoi-30 fighter assembled past times HAL is 50%) amongst spares (€2.16 billion). This brings the cost of the 36 aircraft, amongst the India-specific enhancements to €5 billion (₹36,900 crore or ₹1,025 crore per aircraft). However, Union Minister of State for Defence, Subhash Bhamre has set the cost at ₹670 crore per aircraft. Of course, the Congress claims that it was negotiating on the reason of a cost per aircraft of ₹526 crore but omits to scream what this related to or the telephone substitution rate.
The authorities has taken refuge behind the 2008 Agreement amongst French Republic regarding Exchange together with Reciprocal Protection of Classified or Protected Information, which it renewed inward March 2018. This is unconvincing equally the French President Emmanuel Macron has publicly declared that the French authorities has no objection to the Indian authorities sharing pricing details amongst Parliament. Therefore, the government’s obfuscation regarding pricing solely generates doubts.
Offsets together with coincidences
The 3rd inquiry relates to the offset portion given to Dassault Reliance Aerospace Ltd, or DRAL (a 51:49 articulation enterprise betwixt Reliance Aerostructure Ltd together with the Dassault Group). The Congress has cited ₹30,000 crore patch the Dassault Chairman, Eric Trappier, has stated that the figure is 10% of it equally it has signed offset partnerships amongst to a greater extent than than xxx other Indian partners together with the selection of Indian partners was its independent decision. This is inconsistent amongst quondam French President François Hollande’s argument to a French tidings website, Mediapart, inward September that Reliance was proposed past times the Indian authorities together with that the French did non take away maintain a selection inward the matter.
Adding to this is a set upwards of timing coincidences. Reliance Defence Ltd was registered inward March 2015, weeks before Mr. Modi’s take in to France. Reliance Aerostructure was registered on Apr 24. The offset guidelines were amended inward August 2015, weeks afterward scrapping the negotiations for 126 aircraft, relaxing the obligation on the unusual vendor to render technical details nearly the Indian offset partner at the fourth dimension of winning the contract past times postponing it to when the offset credits are claimed or a yr before it is due. This has permitted the authorities to feign ignorance nearly DRAL’s offset share.
The understanding for 36 aircraft was signed past times the 2 Defence Ministers on September 23, 2016. DRAL was registered on Oct 3 patch FDI inward defense had been liberalised to allow 49% through the automatic road inward June of the same year. In Oct 2017, the foundation rock of the DRAL facility was set inward Nagpur inward the presence of Maharashtra Chief Minister Devendra Fadnavis together with Union Minister Nitin Gadkari. Conflicting statements take away maintain been made nearly whether DRAL would create components for the Rafale or for Dassault’s concern jets.
Further, patch full offsets total to ₹30,000 crore, this is shared between: Dassault which provides the airframe together with is the systems integrator; Safran, which provides the engine together with the landing gear, together with Thales, which delivers the radars together with the avionics. Since Reliance subsidiaries were awarded a clutch of defense licences during 2016-17, it is unclear equally to how many of these are engaged amongst the Rafale offsets. Mr. Hollande’s statement, which is coupled amongst the set upwards of seemingly fortuitous coincidences, solely adds to the controversy.
The casualty is national safety because the IAF’s squadron forcefulness volition drib to 23 inward 2032, unless at that topographic point is fresh acquisition beyond the 36 Rafale together with 123 Tejas fighter aircraft. The instant casualty is the much-touted ‘Make inward India’ defense programme. Sadly, this could take away maintain been prevented if solely the authorities had chosen to address the 3 questions amongst candour together with transparency.
Rakesh Sood is a quondam Ambassador to French Republic together with currently Distinguished Fellow at the Observer Research Foundation. E-mail: rakeshsood2001@yahoo.com
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