The purchase of the first-rate Rafale fighters, a deal that certainly doesn’t come in the category of contemporary technology, has been mired in controversy. The Opposition recently took potshots at the government for changing the goalposts of a contract initiated by UPA-I.
The government has also been accused of stalling any meaningful discussion in Parliament. For the first time in the history of arms acquisition, the government has simply truncated the contract ostensibly for strategic reasons, without indicating the fate of the original deal and its ancillaries.
Project Hanging Fire Since 1983
At the heart of the controversy is apparently cost, and alleged siphoning of funds. Redesigning of contract, short-circuiting government rules of business, forfeiting transfer of technology and defence offsets, including consultation with users, additional delays affecting operational readiness and the IAF’s habitual strategic and ideological inconsistencies are among the secondary issues associated with the deal.
In this episode, India’s indigenous jet fighter, home-made Light Combat Aircraft (LCA) that had to replace Russian MiG variants, considered the IAF’s spine, has unfortunately become the villain.
Not a single target was achieved. Instead, the first prototype flew in 2001 and the first operational squadron had just five aircraft instead of 18. Anticipating glitches in the LCA programme, the IAF put more balls in the air, like buying 126 French Mirage 2000s among other options.
Between 2004 to 2007, given the affinity for somersaults, the IAF altered the project to give it the shape of a global tender (initial four vendors raised to six vendors), thus transforming into a full-fledged MMRCA (Medium Multi-Role Combat Aircraft) programme to back up the fledgling LCA and maintain a credible number of combat squadrons.
Is the Rafale deal cost-effective?
- In a bid to procure Rafale aircraft, India’s indigenous Light Combat Aircraft (LCA) that had to replace the Russian MiG variants have taken a backseat.
- Between 2004 to 2007, the project was transformed into a full-fledged MMRCA programme to back the fledgling LCA.
- In the trials that followed between 2007-10, only Dassault’s Rafale and Eurofighter Typhoon were compatible with operational parameters.
- Deal was stuck after HAL inserted an unreasonable clause that operational efficiency would be Dassault’s primary responsibility.
- In October 2016, letter of intent given to US (F-16) and Saab Sweden (Gripen) to manufacture in India but the contract yet to materialise.
Unreasonable Clause by the HAL
In 2007, the scope of new Request For Proposal (RFP) was expanded from four to six vendors which included the original four: Dassault Rafale, Saab Gripen, Lockheed Martin F16, and Russian MiG-35 along with two new entrants: Boeing F-18 and Eurofighter Typhoon. This mix was akin to comparing apples with pineapples.
Those who’ve tracked the MMRCA programme will recall President Obama’s six-page-long, futile plea to Prime Minister Manmohan Singh for the purchase of US fighters. In the trials that followed between 2007-10, only Dassault’s Rafale and Eurofighter Typhoon were compatible with operational parameters. It is said that officials may have indulged in some jugglery to bring their favourite horse, ie: Rafale up front. Following protracted financial evaluation, that included both Rafale and Typhoon, it was the former that was declared the L1 (or the lowest) bidder on 30 January 2012.
When NDA took over, it spent one year – with two defence ministers, Jaitley and Parrikar – and still could not seal the deal, or perhaps preferred not to take a final call on this.
The deal was stuck primarily because the Hindustan Aeronauticals Limited (HAL) had inserted an unreasonable clause that the operational virtuosity of 108 Rafale aircraft being manufactured in India by HAL (18 delivered by Dassault in flyaway mode) would be the primary responsibility of Dassault, the Original Equipment Manufacturer (OEM).
This was the killer clause and cause of conundrum, with its author shrouded in mystery.
Revised Contract for Purchase of 36 Rafale Aircraft
On 10 April 2015, Prime Minister Modi stunned everyone in Paris as he announced India’s decision to purchase 36 Rafale at a cost of Rs 58,000 cr in flyaway condition, for “operational reasons”, even as the original deal for 126 aircraft was technically and legally alive.
A former secretary in the Finance Division (Ministry of Defence) said:
A contract under negotiation has seldom been transformed so dramatically followed by an announcement that includes forfeiting transfer of technology, obligation related to Make in India and size of defence offsets. And this includes bypassing due process, looping in Cabinet Committee on Security and not consulting IAF Chief Air Chief Marshal Arup Raha.
There was one more irregularity: the defence offsets of Rs 29,000 cr (50 percent of the contract) would accrue to the Reliance Defence Ltd owned by Anil Ambani, a Gujarati entrepreneur whose experience in the defence industry was minimal and who was known to be close to Prime Minister Modi.
The defence offset deliveries in the original proposal were meticulously worked out between Dassault and HAL for 30 months, where the beneficiary would have been state-owned HAL.
Incidentally, the deal on 36 Rafale aircraft includes 350 million Euros payable to Dassault that offers 75 percent serviceability rate (which means that 27 aircarft are operationally available), which is at par with the original guarantee that had stonewalled the deal.
Flip Side of the New Contract
Another twist in the tale was the exclusion of Eurofighter Typhoon, L2 (or second lowest bidder) in the new contract for 36 Rafales, which was concluded in record time – five months. This gave rise to several legal, financial and moral questions that continue to remain unaddressed as the Typhoon was sidelined.
The fallout of the new contract is that instead of 126 aircraft, only 36 fighters will be in the pipeline, when four squadrons – 2 each of MiG-21 and MiG-27 – will be number-plated by March this year.
The fighter squadron strength would have shrunk to 28 squadrons when the accepted operational necessity is 42/44 squadrons, and Pakistan’s air combat strength is 24 squadrons. China’s fighter combat strength is more than 60 squadrons.
Problems with Domestic LCA
Eighteen years after India set out to produce its own LCA, we are way off the target. The LCA still has a wing configuration with flaws in design and other glitches violating the Air Staff Requirement (ASR), a document finalised by the IAF in 1985. Just like the super-heavy Arjun tank built by the DRDO was thrust on the Army, the IAF will have to bear the brunt of its oversight as it has ordered 83 improved LCAs.
In October 2016, a letter of intent was given to US (F-16) and Saab Sweden (Gripen) to manufacture in India. The order was for 114 aircraft that can make up for the shortfall, with the Rafale deal including just 36 aircraft. This order would follow the new strategic partnership pathway introduced in the new Defence Procurement Procedure. The F-16 would tie up with the Tatas and Gripen will seek help from the Adani group.
Comparison Between Two Deals
Firstly, cost comparison: matchstick to matchstick, 18 Rafale versus 36 Rafale. Defence experts have declared the cost of 18 Rafales (on per aircraft basis) less than those of the batch of 36 Rafales.
In a written reply, Defence Minister Nirmala Sitharaman told the Parliament last week that the two contracts cannot be compared directly for costs as “deliverables are different”. This doesn’t seem to be a convincing answer.
Six weeks ago, during a press briefing, on being asked the same question, she had directed the Defence Secretary Sanjay Mitra to release the breakdown of cost. Till date, no cost details have been released. The Defence Minister has emphasised that the aircraft deal was in compliance with standard procedures.
Another question that is not being asked directly is the plausibility of money that might have changed hands. A series of stories on Sukhoi MKI I had filed in the mid-90s had shown how the order books continued to be filled despite the change in government.
Orders for fresh aircraft had come from the Congress, Janata Dal and BJP governments. It is erroneous to assume that inducements are neither offered nor received in intergovernmental (government-to-government) contracts.
IAF Can’t Wait for Squadrons
Parrikar, the longest serving defence minister of this government, which for the best part has fielded a part-time defence minister, has been most voluble. At the recent Goa Art Festival, he boasted that he had secured the best deal possible on Rafale and also explained the virtues of the Rafale fighter pilots’ head-up display helmet. He compared the cost of the Rafale with the difference in the price of tur and moong dal.
Every few years, the IAF agonises over the diminishing number of fighter squadrons and how it is trying to keep pace with PLAF (People’s Liberation Army Air Force). Current Air Chief, Air Chief Marshal BS Dhanoa, compared the existing shortfalls in combat strength vis a vis China and Pakistan to playing a T20 match with seven players.
Later, he sounded more optimistic than realistic, saying that the IAF is ready to fight a two-front war. Recently, Sitharaman told the Parliament that the IAF will have 32 fighter squadrons by 2020. That will be quantitively less than the 34 squadrons it had inherited in 2014 when this government took over.
By 2025, another 10 squadrons will be retired. Dhanoa has said that the IAF will have its authorised squadron strength of 42/44 squadrons in 2032. The IAF needs 42 squadrons not in 2032, but much sooner. Sadly, its present strength is a low 28 squadrons much like in the past. The political class has convinced itself that there will be no war. Capabilities are required to deter, not fight, wars.
(Major General (retd) Ashok K Mehta is a founder member of the Defence Planning Staff, the forerunner of the current Integrated Defence Staff. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.
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