Wednesday, 7 February 2018

Defence ministry rebuts Rafale charges, says UPA signed “confidentiality agreement”



By Ajai Shukla
Business Standard, 8th February 18

In a written statement on Wednesday, the defence ministry rebutted what it calls “unfounded allegations” and “misleading statements” on the 2016 agreement between New Delhi and Paris to buy 36 fully built Rafale fighters.

The statement does not offer any figures about how much India is paying for the various components of the deal – a key demand of the political opposition. Defence Minister Nirmala Sitharaman had promised on November 17 to provide the figures, but on Monday declined to do so, citing a “confidentiality agreement” signed with France.

The ministry statement indicated today that supplying details would reveal the Rafale’s capabilities, compromising operational secrecy.

“The approximate acquisition cost of the Rafale aircraft has already been provided to the Parliament.  Provision of exact item-wise cost and other information will reveal, inter alia, details regarding the various customizations and weapons systems specially designed to augment the effectiveness and lethality of the assets, impact our military preparedness and compromise our national security,” said the ministry.

It said this was in line with “the confidentiality provisions of a bilateral India-France Agreement of 2008 signed by the previous [United Progressive Alliance] government.”

Indicating that this was normal government practice, the ministry stated: “In keeping with confidentiality requirements, the UPA Government had also expressed its inability to disclose the price of various defence procurements, including in its responses to Parliament Questions (sic).”

This contention is not backed by facts. When the UPA government faced a question in Parliament on March 4, 2013 on the purchase and upgrade cost of the Mirage 2000 from Dassault, it tabled a detailed answer.

“The last contracted price for each Mirage 2000 aircraft in the year 2000 was Rs 133 crore. The contract for the upgrade was signed in 2011, wherein, the cost of upgrading one aircraft was Rs 165 crore”, the UPA government answered, adding further details.

Furthermore, top MoD officials have already revealed exact details of the contract, including a cost breakdown, in an off-the-record briefing on September 24, 2016 – the day the Rafale IGI and commercial contracts were signed.

As this newspaper reported that day (September 24, 2016, India signs Euro 7.8 billion deal for 36 Rafale fighters; no options for more”) the average cost of each Rafale is Euro 91.7 million (Rs 726 crore at current exchange rates). In addition to the Euro 3.3 billion cost of 36 Rafale fighters, India contracted to pay Euro 4.5 billion more for: “India-specific enhancements” (Euro 1.7 billion); spares (Euro 1.8 billion), logistics (Euro 350 million) and weaponry (Euro 700 million), according to the MoD officials.

The NDA government has never confirmed these figures, but can do so now without revealing operational details of the “India specific enhancements”.

Next, the defence ministry addressed the question of why Eurofighter was not invited to bid for 36 fighters, to make it a competitive procurement, rather than presenting Dassault with an advantageous single-vendor situation.

“It (the Congress Party) seems to have been conveniently forgotten that the [UPA] Government itself had rejected [Eurofighter’s] unsolicited offer made days after closure of the bid process, declared [Dassault] as the [lowest] bidder and had commenced negotiations with it in February 2012”, said the ministry statement.

While this is factually correct, the UPA government was prevented by the Defence Procurement Procedure (DPP) from entertained Eurofighter’s unsolicited offer once Dassault had been declared the lowest bidder. However, there was no DPP restriction on asking Eurofighter to bid for supplying 36 fighters, since that was an entirely new procurement.

Finally, the defence ministry release stressed that the purchase of 36 Rafales was “strictly in accordance with the Defence Procurement Procedure in all aspects including mandating, conducting and monitoring of negotiations and seeking all necessary approvals, including that of the Cabinet Committee on Security, before entering into the IGA.”

This is factually correct. However, the DPP-mandated process had not been gone through when Prime Minister Narendra Modi announced the agreement on April 10, 2015, on a visit to Paris.

“I have asked President (Francois Hollande) to supply 36 ready-to-fly Rafale jets to India,” said Modi at a press conference, effectively sealing the deal.

Eager to dispel any hint of wrongdoing, the defence ministry came out punching today, stating: “the deal secured by the [NDA] Government is better in terms of capability, price, equipment, delivery, maintenance, training, etc., than that notionally negotiated by the then [UPA] Government in a process it could not conclude in ten years.  Moreover, the present Government completed these negotiations in just about one year. 

19 comments:

Krishna said...

Interesting that you wrote about one instances where UPA RM mentioned price per aircraft for a commercial deal (sourced from @manupubby's tweet?), but failed to mention four other instances where UPA RM declined to disclose item-wise price and even total size of the deal (as mentioned in @vishnuNDTV and @iyervval's tweets).

Unless the upgrade of Mirage 2000 was a G to G deal and not a commercial contract to Dassault Aviation as widely reported (which would not have come under a G to G confidentiality agreement), juxtaposing them is dishonest journalism.

Dujac said...

What people like you and some Congress based anti-national politicians have managed to achieve here is a policy paralysis. This will prevent any future purchase of essential weapons for national security in reasonable time. You never seemed at discomfort about the MMRCA tender which took 8 years and ended up going nowhere. You as well as anyone with basic understanding of defense matters know that inviting Eurofighter back in the fray would have delayed the process of buying any aircraft by years. But somehow, you seem ok if Indian Air Force remains under equipped as long as Modi government doesn’t get any credit. You seem at ease with the fact that Indian Airforce would be no match against Chinese new generation fighters without an advanced system such as Rafale. If anyone ever relied you for defense matters, India would still be flying Gnats and Hunters.

j.Sashi bhushan Bhushan said...

why is the aircraft so costly are they giving us the blueprints to manufacture the aircraft ourselves even withe weapons package and the maintenance but there are rumours that they would make the kaveri engine work and help it with the amca but disclosing the price with the opposition in a closed door meeting will also help as we are short of fighter aircrafts

Anonymous said...

Why are you bothered about Rafale. It is a govt to govt deal.
It is the aircraft IAF selected after a through selection process. MoD agreed with the choice.
BJP honoured the selection.
Be happy BJP did not change its mind and order something else, as if ruling party president fly this.
Now idiots like you are saying it is wrong blah blah .
Corruption is illegal in France, why will french govt deal with corruption.

In fact GOI should go only for Govt to Govt deals always.
All the L1 bids, competition is backwass. Leads to corruption,fudging of results etc.

Then you Guys add all kinds of lies. You retired guys had better stock gardening.
So col, get ahead with life. Forget Rafale.

Anonymous said...

UPA wanted... bofors II... Signed NDA... couldn't take bribe... sore about it...

Satinder said...

You summed it beautifully Krishna ji!! We expect more than this when we visit this page. Hats off to Congress for winning so many talented journalists allegiance!

Anonymous said...

After reading this article, one must wonder if Shuklaji lost the big picture in the intricacies of DPP or is just being another disingenuous journalist. On the topic of Eurofighter v/s Rafale, the latter allows development of a strategic relationship with an advanced industrial nation while the former is a product of a group of nations that are, to put it mildly, at odds with each other at the best of times. To think that Rafale deal is a mere purchase of aircraft is to miss the woods for the trees. For me personally, the success of the Rafale deal is contingent on the outcome of Safran Consultancy for the Kaveri Jet Engine; success of which will cement volume induction of Tejas aircraft in IAF, not to mention grease the path for future development in Aeronautics. Other offsets towards indigenisation will be a bonus. Follow-on Orders for Rafale with increased indigenous content would be akin to a fly-wheel spinning faster upon initial success. There is more to the Rafale deal than mere purchase of aircraft and there are enough hints available in the public domain....only if one wants to take the hint!

Anonymous said...

So called Defence expert Ajay Shukla conveniently forgets difference between Gov to Gov deals (As in the case of Rafale and Confidentiality Clause) and Mirage 2000 upgradation ( Where MOD delat with Dassault Aviation, its not G2G)

Anonymous said...

Its surprising to hear this from the Gov. I had come to expect a more honest and straight forward answer. In today's age one cannot get away with the type of governance on display.

What these number will show is that Modiji to please the French president agreed to a day light robbery of Indian money that could easily have been better spent.

We get the leaders we deserve.

Prasun

Anonymous said...

Maybe you should read this instead writing bullshit.



https://www.myind.net/Home/viewArticle/the-rafale-vs-eurofighter-debate-is-a-non-starter-vested-interests-should-stop-trying-to-derail-the-rafale-deal

Anonymous said...

The Future of the South Korean Defense Industry — Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defence Intelligence, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Pankaj Bomble said...

https://slashdot.org/submission/7892507/future-of-the-south-korean-defense-industry---market-attractiveness-competitive

Anonymous said...

agree with the comment above, you have selectively taken 1 example of an expensive upgrade program in itself but overlooked many more. like have we ever disclosed how many contracts have been signed with Israel and for what? same for Russia. we got ammunition by going around all laid down procedure and nobody is having any issues with it. the only reason why congress is bringing this up is because ambani name cropped up otherwise if they were sincere they would have brought all other contracts for disclosure.

Ashish said...

Your bias continues to come to fore all the time. Incomplete data, factually wrong arguments. You give a broad breakup quoting off the record comments. Is there any truth in that, who knows. If if we assume you are being truthful, where are the specifics that compromise security. Don't try to make issues out of non issues. Shameful journalism, more shameful because you are not upholding the ethos of your military service

Anonymous said...

See you are barking at the wrong tree.

https://www.newslaundry.com/2018/02/09/rafale-deal-misconceptions-defence-ministry-dassault

The biggestroblem in IAF is number of platforms.IAF is aware of it.
The IAF wanted to buy 126 Mirage-2000. This was a great idea.
But some idiot in MoD decided on open competition.Taking the IAF for a ride. Putting the security of the nation at risk.
All the joint secy and above in MoD when this decision was taken need to be punished.
Minimum pension cut off , maximum sedition.
Let us be honest Please answer why we are paying for those civilian babus at all.
The decision taken by this govt was right and timely.

Anonymous said...

Ajay,
you and rest of the media are ware of total cost. I hope you can evaluate the price per unit.

You may not be Dalal of any defence houses. However, I see other media house as data of one or the other defence houses demand key component const.
Neither yourself or any other media house are an expert's on aircraft design/component configuration or design and configuration of barebone Rafael.

UPA did not sign the price with Rafael, which they shout in media. Where is UPA final contracted price per aircraft on paper? Will French firm agree they finalised price with UPA? please disclose it and before you demand break-up price of each component

We negotiated SU30 MKI for TOT, but it was pure screwdriver technology. I am very much, aware even to this day, key components of SU 30 MKI are imports. The first SU 30 MKI engine built at HAL K was based on a fully imported knock-down kit. The components were screwed back to support the Chairman honour before he retired.

I too can say, the Congress negotiated the price of Rafael for a dollar. or Maybe I can say, the cost of coal mine I was supposed to buy was one Rupee but UPA did not go ahead with the contract.


I understand you are an ex-Army personal with the hournalista hat. However, I doubt you have any idea on technical or R&D ground on any of the aircraft design. Please get your fact's before ridiculing high ranking ex- airforce personals in media.

Anonymous said...

This is a response to the comment about IAF's original desire to purchase 126 Mirage-2000.

IAF wanted those aircraft in 1999. The Soviet Union had just broken up, the UN Security Council veto inherited by Russia while the Americans had yet to discover India. That made India very reliant on Russian veto in the event of American enthusiasm for Kashmir independence. The Financial Crisis had not yet hit the Western world, which made them more amenable to co-operating with emerging markets like India. Placing a huge order with a Western nation like France in the early 2000s would have certainly caused Russia to blow fuse and potentially withdraw India's veto cover.

It is a different story today where India can leave Russia hanging (no platform purchases since 2012, only consumables) and manage the consequences, if any.

I too want the MoD babus to be punished; but for the right reasons. And then there is a matter of the Indian Air Force focused more on self-preservation than on national security.

Anonymous said...

The aircraft is just a token part of the 'deal' - the hardware doesn't matter here. Until people get this - they'll never see the light.

Anonymous said...

If u r pro govt. then u r good journalist otherwise u r called pro congress or anti national.