Rafale ‘kickback’ controversy: How jet deal exposes the dirty hands of Congress

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There are umpteen reports in the public domain which suggest in no uncertain terms that it is just not the Congress but it is the very Congress culture that is most decadent. For decades the party made the defence sector a den of brokers and middlemen

The Rafale deal is in the news once again and at the core of the controversy is the Congress, which is reported to have been the ultimate beneficiary of kickbacks that were paid via false invoices between 2007 and 2012, when the UPA government was in power. French media portal Mediapart has revealed that Dassault paid at least €14.6 million in secret commissions to middleman Sushen Gupta.

Gupta’s name features prominently in the AgustaWestland deal, too. A dubious British national, Christian Michel, who was extradited from the UAE in 2018, played the key role of a money launderer in the Rs 3,700 crore VVIP Augusta chopper deal. Having Michel extradited from the UAE was not an easy task, but it was the sheer persistence of the Modi government that finally paid off. Michel has been lodged in Tihar Jail for almost three years now and India’s probe agencies are in no mood to relent and rightfully so.

Coming back to Rafale, the Supreme Court upheld the Rafale deal negotiated by the Modi government and summarily dismissed all review petitions that questioned the veracity of the deal in May 2019. With the apex court giving its stamp of approval to the deal, one would have expected the Congress to stop flogging a dead horse. But an electorally vanquished Congress that has been unable to counter the Modi juggernaut in the last seven years, has desperately tried every trick in the book, including raking up the Rafale bogey every now and then, to reclaim its lost political heft. It is a different matter altogether that the Rafale deal inked by the Modi government is a completely transparent one and hence the Congress and its scion, Rahul Gandhi, have been left eating humble crow.

The Congress leader, instead, overlooked the Congress’s role in the Jeep scam under Jawaharlal Nehru in 1948, the Submarine scam under Indira Gandhi, and the Bofors scam under Rajiv Gandhi in 1986-87, to the Adarsh Housing Society scam and Tatra Truck scam under the Congress-led UPA.

Prime Minister Narendra Modi deserves credit for his courage of conviction in the face of baseless allegations by the defunct Opposition. A lesser leader would have wilted under the pressure. As the first batch of five Rafale fighter jets covered a distance of almost 7,000 km, to travel from France, arriving in India on 29 July 2020, to be inducted into the Indian Air Force fleet, at the Ambala air base in Haryana, as any proud Indian, one’s thoughts reflected on how this historic event was made possible, thanks to the prime minister’s unwavering commitment. The Number 17 Golden Arrows squadron of the IAF was resurrected in preparation for the induction of five Rafale jets into the IAF. The Golden Arrows were raised in 1951 and have been involved in a number of significant operations throughout their history, including the Kargil War.

The Dassault Rafale (literally meaning “gust of wind” and “burst of fire” in a more military sense) is a French twin-engine, canard delta wing, multirole fighter aircraft designed and built by Dassault Aviation. The Rafale is referred to as an “omnirole” aircraft by Dassault. The Supreme Court’s clean chit to the Rafale deal last year was a major win for the Modi government, which has made transparency in defence contracts non-negotiable. Modi’s impeccable integrity has no parallels in contemporary India. This is a far cry from the Congress regime’s reportedly nefarious and dubious dealings in purchases of Agusta Westland helicopters and the Pilatus deal.

Coming back to Rafale, former Indian Air Force (IAF) chief AY Tipnis, who commandeered the IAF during India’s victory in the Kargil War, called the deal for 36 Rafale jets, a “masterstroke”. Tipnis stressed that Rafale is one of the best aircraft in the world, outranking almost all contemporary fighters in terms of operational capabilities, safety features, ease of operation and maintenance.

In April 2015, Modi had announced the purchase of 36 Rafale jets after talks with then French President Francois Hollande during his visit to the country. A deal was finalised when Hollande visited New Delhi to participate in the Republic Day celebrations in January 2016. The Congress-led UPA government, when in power, was negotiating with Dassault Aviation for 126 Rafale aircraft. Of these, 18 jets were to be supplied in a fly-away condition and 108 were to be manufactured in India along with Hindustan Aeronautics Limited (HAL). However, the lethargic UPA could not seal the deal due to differences with Rafale-maker, Dassault.

Why did the Modi government decide to buy the Rafale? This is an oft-repeated question. Well, Rafale is undeniably, among the world’s most advanced fighter jets. Some of its cutting-edge features are: (a) Substantial increase in action radius, (b) More wing and fuselage stations to carry weapons, fuel tanks, (c) SPECTRA system which immensely enhances IAF’s ability to operate in heavily defended enemy territory, (d) Long-range radar-guided Meteor air-to-air missile for air dominance, (e) Ease of maintenance. Rafale, with an autopilot, auto throttle and auto thrust, is not only streets ahead of Sukhoi Su-30MKI, which was IAF’s last major jet acquisition, but also a quantum leap over the Mirage 2000, also manufactured by Dassault.

Again, how is the Rafale a much needed game changer, has been asked by many. Rafale is special because it is a twin-jet combat aircraft, a beautiful machine with a weight of 24,500 kg when it is fully loaded and armed, about 9,900 kg when it is empty, with a service ceiling of 50,000 feet, a maximum flying speed of 1.8 Mach or 750 knots, an approach speed of less than 120 knots and of course, a wing span of 10.9 metres. It is a long-range cruise missile, with a target range of 3,700 km that can go up to 4,220 km, with mid-air refuelling, whereas the F-16, for instance, is a short-range strike missile with a range of 3,700 km. The aircraft is intended to perform air supremacy, interdiction, aerial reconnaissance, ground support, in-depth strike, anti-ship strike and nuclear deterrence missions.

The aircraft is capable of carrying a range of potent weapons. Besides the missile systems, the Rafale jets will come with various India-specific modifications, including Israeli helmet-mounted displays, radar warning receivers, low-band jammers, 10-hour flight data recording, infra-red search and tracking systems among others. Two F-16s would be needed to combat one Rafale. F-16 has a medium range missile, whereas Rafale is a more powerful, long-range meteor missile. The Rafales secured by India are also more potent than the Russian Su-35 and China’s Chengdu J-20.

Why did the Modi government buy 36 Rafale jets and not 126? Many defence experts, including Chief of Defence Staff (CDS) Bipin Rawat, have opined that additional Rafales would be cheaper than those ordered in 2016, if purchases are staggered. This is primarily because a large component of the money paid for “India Specific Enhancements” will come down, as the majority of the cost was in any case, for research and development, modification and certification. Hence, ordering only 36 fighter jets initially was certainly the right thing to do. Also, the cost of setting up base and training will come down, with staggered purchases. India had paid for setting up two bases for just 36 aircraft. These bases can easily accommodate many more aircraft later.

Again, the decision to buy 36 Rafales was driven by an emergency-like situation, thanks to criminal negligence over the years, on the part of the Congress-led UPA establishment. The IAF had only around 33 squadrons against the sanctioned strength of 42. That number further went down to below 31. Negotiating a larger deal involving more jets, transfer of technology and production of the aircraft in India, would have taken a longer time.

Was HAL sidelined? The answer is a categorical “No”. Former Air Chief Marshal BS Dhanoa, while replying to questions on HAL being left out of the deal, said that HAL was a licensed manufacturer and does not do many offsets. Citing data, he said the total offsets under various deals were about $11.48 billion — of which a major share was of the IAF, which was about $9 billion. Of this, HAL had a share of $400 million. He also said that it was for the original equipment manufacturer (OEM) to choose its offset partners and the government and the IAF had nothing to do with it.

Also, the Modi government decided to buy the fighters off the shelf, because manufacturing a small number of fighters would not have been economical. While HAL is not the strategic offset partner, it remains one of Dassault’s many partners for execution of the offset clause, along with other private and state-owned firms. So despite initial reservations, it is business as usual and there is no bad blood between HAL and Dassault.

Is the Rafale deal exorbitant? The Rafale deal negotiated by the Modi government is very competitively priced and not exorbitant at all. The Congress alleged that the government was procuring each aircraft at a cost of over Rs 1,670 crore, as against Rs 526 crore finalised by the UPA government when it was negotiating a deal for procurement of 126 Rafale jets. However, as per documents, the per unit cost of a Rafale jet in the deal negotiated by the Modi government, after taking into account the cost of weapons, maintenance, simulators, repair support and technical assistance, works out to about Rs 1,646 crore. The per unit cost in the deal that the UPA was negotiating would have worked out to Rs 1,705 crore, if all the aforesaid additional features had been added. On a like-to-like basis, the Modi government has therefore saved Rs 59 crore per aircraft, compared to what the Congress was intending to do. The Modi government, in fact, managed to save money despite spending over Rs 9,855 crore more on the India Specific Enhancements requested by the IAF.

Qatar bought its Rafales at $292 million per unit, Egypt bought the same fighter for $246 million per unit and India paid $243 million. Therefore, the cost for India was pretty competitive and accusations of the Modi government paying a steep price are simply a figment of the imagination of mischievous minds.

Did the Modi government bypass any defence procurement related procedures while signing the deal? The deal was signed in accordance with the Defence Procurement Procedure (DPP) of 2013, put in place by the UPA government. According to the document, inter-governmental agreements do not require approval from the Defence Procurement Board, the Defence Acquisition Council and the Cabinet Committee on Security. The parts of the document which deal with inter-government agreements can be found in Articles 71 and 72.

What is the role of Reliance Aerospace Technologies Ltd (RATL) in the deal? Reliance Aerospace did not replace HAL in the deal. RATL was selected by Dassault, which was free to choose its partners in India, for the execution of the offset clause, purely on the basis of commercial considerations, as it deemed fit. In most businesses, it is always the prerogative of the OEM to decide its offset partners and ditto was the case, here as well. So, why the brouhaha? Also, state-run firms like Defence Research and Development Organisation (DRDO) and HAL, along with multiple other private firms, will also be part of Dassault’s offset execution, with DRDO getting the lion’s share. This joint venture, Dassault Reliance Aerospace Ltd (DRAL), was created on 10 February 2017. Other partnerships have been signed with other companies such as BTSL, DEFSYS, Kinetic, Mahindra, Maini, SAMTEL.

Again, negotiations were ongoing with a hundred-odd other potential partners, as per statement by Dassault Aviation. Why did the Congress and Rahul Gandhi single out RATL, when the quantum of offset contract that will be handled by RATL would be barely 3 percent of the overall offset contracts worth Rs 30,000-crore? A compromised Opposition and large sections of Left-leaning media wanted to create the impression that Reliance Aerospace is the biggest beneficiary of Dassault Aviation’s offset contracts, whereas in reality, it is just one among the many players, in this case.

Also, before Anil Ambani came into the picture, the defence arm of Reliance owned by Mukesh Ambani had tied up with Dassault, in 2012, even much before the Modi government assumed office. However, Mukesh Ambani’s Reliance did not pursue its defence business after 2014 and his brother Anil Ambani’s company Reliance Aerospace Technologies Ltd (RATL) tied up thereafter with Dassault for the execution of the offset clause, after the deal was signed.

Did the Congress legitimise corruption in defence deals? There are umpteen reports in the public domain which suggest in no uncertain terms that it is just not the Congress but it is the very Congress culture that is most decadent. For decades the party made the defence sector a den of brokers and middlemen. Notorious arms dealer Sanjay Bhandari, reportedly a close confidante of Robert Vadra, has been slapped with a chargesheet by India’s Enforcement Directorate (ED). Another glaring example is the much-maligned middleman, Christian Michel, of the VVIP chopper scam infamy, who was reportedly known to the “first family of the Congress”. Michel is currently in Tihar Jail, thanks to the Modi government, which had him extradited in 2018, from the UAE. Michel recently moved the Delhi High Court seeking bail on the grounds that he was susceptible to contracting COVID-19 in the jail. The ED and the CBI opposed his bail application.

It is a shame that in 2004-14 when one of India’s neighbours added 400 fighter planes to its fleet and another neighbour increased its fleet of fighter planes, many of which were 4th and 5th generation fighter planes, the Congress-led UPA, reportedly, stopped defence procurement for want of a “deal”, as in cuts and commissions.

Did the Supreme Court give a clean chit to the Modi government? Yes, in a historic judgment, the Supreme Court on 14 November 2019 gave the Modi government an absolutely clean chit on the procurement of 36 Rafale fighter jets from France and dismissed all the petitions seeking a direction to the CBI to register an FIR for alleged irregularities in the deal. A Bench headed by then Chief Justice Ranjan Gogoi said there was no occasion to doubt the decision-making process in the multi-billion dollar deal. On the issue of offset partner, the Bench, also consisting of Justices SK Kaul and KM Joseph, said there was no evidence of commercial favouritism to any private entity. The Supreme Court also said there has been a necessity for fighter aircraft and the country cannot remain without jets.

The Rafale matter was heard threadbare by the Supreme Court, which, after initially saying that it will not look at the cost, did so, with the Modi government providing an itemised break-up in a sealed cover. The court upheld the deal on procedures too, with the Modi government detailing negotiations and pointing out that UPA failed to resolve differences between Rafale maker Dassault and HAL over man hours and costs for production of the fighter in India.

Post the Supreme Court verdict, which unequivocally upheld the Modi government’s decision to buy Rafale fighter jets, Rahul Gandhi had to tender an unconditional apology, the Congress lost whatever little credibility it had and ended up looking like a bunch of petty charlatans. Clearly, the induction of Rafale fighter jets is an unprecedented milestone under the leadership of Prime Minister Narendra Modi, in the rapidly growing India-France defence cooperation.

The writer is an economist, national spokesperson of the BJP and the author of ‘Truth and Dare: The Modi Dynamic’. Views expressed are personal.​​



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