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N Ram’s Explosive Expose on PMO’s Parallel Rafale Negotiations
Another day, another twist in the Rafale saga.
A day after Prime Minister Modi attacked the Congress for opposing the Rafale deal, Congress President Rahul Gandhi responded with a press conference on a major newsbreak by veteran journalist N Ram in The Hindu. N Ram was, of course, one of the journalists who broke the Bofors scam back in the day.
His new article reveals that Defence Ministry officials had accused the Prime Minister’s Office of running parallel negotiations with the French government in a note dated 24 November 2015. The note claims that this undermined the MoD and the official Indian Negotiating Team, weakening their negotiating position.
An example of this was the acceptance of a letter of comfort instead of a bank guarantee or sovereign guarantee.
According to the note, the Defence Ministry and Negotiating Team had been insisting on the guarantees, but were then informed in a letter from General Stephen Reb, the head of the French negotiating team, in October 2015, that a letter of comfort had been agreed as sufficient in a telephonic conversation between the PM’s Joint Secretary Jawed Ashraf and Luis Vassy, Diplomatic Adviser to the French Defence Minister.
In November last year, The Quint revealed that two major objections to the deal from members of the Indian Negotiating Team were only resolved on the basis that we would get a sovereign guarantee from France. At the time, it was understood the decision to drop the requirement of such a guarantee was taken in August 2016 by the Cabinet Committee on Security, but it now looks like the decision had been made several months previously by the PMO.
Defence Ministry Officials Who Signed the Note
Coming back to N Ram’s article, he points out that the protest note was endorsed by then Defence Secretary G Mohan Kumar, who added a file noting asking the Raksha Mantri to look into this issue. G Mohan Kumar has now made a statement to the press saying the note had nothing to do with pricing, but interestingly, he has not denied the note’s existence, or distanced himself from its contents.
Even more interestingly, the note was also signed by the Join Secretary (Air) Rajeev Verma, who was part of the Indian Negotiating Team Director General (Acquisition) Asha Ram Sihag. Verma was one of three INT members who raised objections to the deal and was later sent on leave and transferred from the Defence Ministry.
Sihag was removed from his post weeks after the note was sent and replaced with Smita Nagaraj in December 2015, an officer from the PMO.
Was that merely coincidence?
Does Nirmala Sitharaman’s Response Make a Difference?
Defence Minister Nirmala Sitharaman has issued a scathing response to the article, accusing N Ram of selectively quoting from the note. She rightly points out that the Hindu article doesn’t include then Defence Minister Manohar Parrikar’s response to it.
Parrikar’s response to the objections, however, is far from satisfactory.
He says that the PMO and the French President’s office were only monitoring the progress of the negotiations. As a result, he says paragraph 5 of the note – that the MoD and Negotiating Team’s position was weakened – is an “over reaction”.
While this should certainly have been included in N Ram’s article, it actually shows the Defence Minister in a bad light.
The note in paragraph 4 clearly states that no MoD official had agreed to dropping the requirement for a sovereign guarantee or a bank guarantee, and to the decision to allow a foreign arbitral tribunal to adjudicate on the agreement. That they should be forced to accept contradictory positions because of back-channel discussions of the PMO with the French government, is surely a serious issue, and for the Defence Minister to term this an over-reaction seems very strange.
It also runs contrary to what the leader of the INT has revealed – that the PMO did in fact make the decision on sovereign guarantees. The response also came only a month after the note was forwarded to him.
Will the Expose Change Anything?
So will this note lead to any consequences?
The government has doubled down, and speaking to The Quint, the leader of the INT, Air Marshal SBP Sinha, says the negotiating team never raised these issues. He says there was no government interference, though he admits the decision to accept a letter of comfort was decided between the two governments even though the negotiating team was looking at this issue.
Perhaps it could have some effect in the Supreme Court, which is still to hear a review petition against their December verdict. The SC judgment said that the INT negotiated the terms and conditions of the deal, based on the government’s affidavit and information in a sealed cover – the affidavit made no mention of PMO oversight or this high-level decision to accept a letter of comfort.
The judges also disregarded the statements by former French President Francois Hollande to the media where he said that the Indian government had changed the “formula” of the deal to involve Anil Ambani’s Reliance.
The new revelations seem to support the view that the Prime Minister did at the very least change things up in the deal through discussions separate from the main negotiations, and his office was involved earlier than admitted.
Prashant Bhushan has submitted the information to the apex court – we’ll now just have to wait and see if the judges consider it relevant.
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