This Article is From Jan 26, 2018

The Mysterious Math Of Team Modi's Rafale Deal

There used to be a song in my youth that went "You can run, but you can't hide". Raksha Mantri Nirmala Sitharaman might be well advised to keep that line humming in her mind as parliament convenes for its budget session next week - when she will be held accountable for the steep price she has paid for a handful of Rafale jet fighters.

At her November press conference, Smt Sitharaman stated, according to The Indian Express, that "the amount paid for each French fighter aircraft by the current government was much lower than the one negotiated by the UPA government during its tenure" (emphasis added).

The Indian Express report goes on to say, "She was repeatedly asked by the journalists to share the comparative aircraft costs for the two governments". She is said to have responded, "I am not shying away from giving figures" and added that she was "asking the Defence Secretary to share the numbers".

Fairly straightforward, one would say. The minister claims she is "not shying away" from the price issue and instructs the civil servant who heads her ministry to go ahead and "share the numbers". Then why, two months later, has the comparative costs chart not been placed in the public domain?

Moreover, defence analyst Ajai Shukla has permitted me to say that he has specifically asked the Director of Public Relations in the ministry for this promised information but the official has not (at the time of writing) deigned to reply. So what are they hiding? Why are they so furtive? Why, if I might borrow the lady's elegant phrase, are they "shying away"?

Well, they can't run beyond the forthcoming parliament session because the opposition is bound to remind her of her published assurance and ask her to furnish the information she has publicly pledged to provide the nation. At that time, she will have to come clean. She will be asked to show how the price she has negotiated is "much lower" than the earlier deal either in terms of the price per aircraft or the overall deal. As and when the figures are revealed, she will be revealed as having been somewhat economical with the truth.

For the official Congress spokesman made it known on November 17 that the price per aircraft settled by the UPA was Rs. 526.1 crore - whereas the Modi government's negotiated price was Rs. 1570.8 crore per aircraft.

Not even the mathematical genius of Srinivasa Ramanujam would be able to show 1570 as less than 526! And if you don't like a comparison in Indian rupees for a foreign purchase, let us recall that the spokesman had said the same thing in US dollars. UPA settled the dollar price at $80.95 million per aircraft. The Modi government are paying out $241.66 million for each Rafale. By what sleight of hand or arithmetical legerdemain can 241 be "much lower" than 80?

When it comes to a comparison of the total costs, the UPA commitment was around Rs 54,000 crore. The Modi government will be shelling out Rs. 58,000 crore. By what logic is 58 "much lower" than 54?

Secondly, the UPA was going to pay Rs 54,000 crore for 126 aircraft; the Modi government is paying out Rs 4,000 crore more than that for a mere 36 aircraft. How can this make for a "far better deal per aircraft" as Madam Sitharaman claimed at her press conference?

What is sadder still is that there is no "Make in India" involved in the new BJP deal. All 36 Rafale fighter jets are being procured in mint "fly away" condition. Under the UPA, we were buying 18 Rafale aircraft in "fly-away" condition and getting the remaining 108 aircraft assembled in India with a considerable measure of indigenous manufacture. Even more significantly, the deal involved the transfer of technology so that we could ourselves manufacture as many more fighter jets, and for as long as we wished, without having to go beyond our shores. Given that the India Air Force has long pitched its demand for such jet fighters at around an additional 250 aircraft, the technical capacity to manufacture more than a hundred aircraft over and above what the French were selling us would have made us virtually self-sufficient in Medium Multirole Combat Aircraft. Now, we can make nothing more than the 36 we have bought. No Transfer of Technology. No "Make in India". How can this possibly be a "far better deal"?

Ah, reply the mandarins of the Defence Ministry, you have to take account of all the special features of the aircraft we have purchased, its several "India-specific" modifications and accessories. But at what cost per aircraft are we getting these additional features? That would have become obvious if Smt Sitharaman had not shied away, or if her officers had carried out instructions publicly given in the presence of a legion of defence correspondents called together by the minister herself. It is understood that some of the more fancy special features are not being manufactured by the French company, Dassault, at all. They are procuring these items from Israel and others sources. As some or many of these accessories are not integral to the basic aircraft but "add-ons", would it not have been more economical to separately acquire them from the original manufacturers? Would the "comparative chart" not reveal how much in terms of price has been added on and how it compares with direct procurement?

There is also the curious angle to excluding the public sector Hindustan Aircraft Ltd (HAL) from the deal. There is, after all, only one company in India that has actually manufactured military aircraft. HAL-made aircraft have been inducted into the Indian Air Force. It was HAL that was to be entrusted by the UPA deal with the transferred technology and the assembly/manufacturing mandate. Why suddenly shift to the private sector? I am not per se against private sector manufacture of defence equipment, but would have been more comfortable entrusting a vital component of national defence security to an established manufacturer than to a relatively new hand. Of course, the Raksha Mantri can explain why the involvement of HAL in the Rafale transaction was suddenly terminated. But that might drag her into rough waters. For, associated with that would be the question tweeted by Congress President Rahul Gandhi: "Can you explain 'Reliance' on someone with nil experience in aerospace for the Rafale deal?" Anil Ambani's group has, of course, answered the question to their own satisfaction. But the question was not posed to Reliance. It was posed to the minister charged with the defence of India. It is for her to answer. And if she does not do so suo moto on the floor of the House, the Opposition, one expects, will oblige her to answer. Truthfully.

What needs to be explained is the urgency behind making an emergency deal when the previous government had already negotiated a cheaper, better, more comprehensive deal that would have given us many more jet fighters to fill yawning gap in our defence preparedness and, eventually, through the 'Make in India' route, all the medium multirole combat aircraft the Air Force is asking for. 

Instead, the country is being treated to the spectacle of a Raksha Mantri, of all mantris, "shying" away from taking this country into confidence. Not much longer though. "Chand hi roz, meri jaan/Faqt chand hi roz" (Faiz).

(Mani Shankar Aiyar is former Congress MP, Lok Sabha and Rajya Sabha.)

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