The Defence Minister fields questions about a number of concerns that relate to the Rafale deal — ranging from pricing to due process
Last month, Defence Minister Nirmala Sitharaman said there was “a perception battle” the Centre was fighting over the Rafale deal and she would do so by “stating facts on record”. In this interview, Ms. Sitharaman argues that due processes were followed in acquiring the Medium Multi-Role Combat Aircraft (MMRCA) and that the Opposition parties are keen only on raking up a controversy. One of the big concerns raised about the Rafale deal relates to due process. The Prime Minister announced that India would purchase 36 Rafale jets very unexpectedly during his visit to France in April 2015. The government says this was only a “statement of intent” and that the due processes — such as clearance by the Defence Acquisition Council and the Cabinet Committee of Security — came later. But it appears that many officials — the Foreign Secretary, officials at Dassault and even the then Defence Minister, according to some reports — were either unaware that there would be such an announcement or made aware only days before it. So how exactly was the decision taken to announce the purchase?
As you say this announcement fructified into a deal, in which the due processes were followed. Everything laid down was followed.
Yes, after the announcement. But what about before?
What was the announcement?
That we wished to purchase and we wanted the committees to go through the process. I don’t know how you’re concluding that the Foreign Secretary, the then Defence Minister and others were not in the picture. They were very much in it. You think the Prime Minister and the President of France sit and write down the joint statement and press release? No, it is the officials who do it. And they are not going to be doing it like that in a jiffy ( snaps her fingers ), but sit and work on it.
The language of any joint statement between two countries is mulled over many times before it becomes final. So, the very individuals who you’ve identified by their designation were involved in the joint statement. So, what makes you conclude they were kept out?
They all knew and were part of the decision-making process even before the statement of intent.
But there must have been some consultations at the top, at least with the Air Force. This process has never been clearly spelt out. No. It is well laid-out. The joint statement is not written by the PM in his own hand. It is written as an institutional instrument of intent between two governments. And that intent is expressed through the institution where the people concerned from the Air Force, the [Ministry of] External Affairs, the Prime Minister’s Office (PMO), Ministry of Defence sit together to draft the document. Then it goes to the French side. It comes back from them and then it is finalised. Post that is when if the intention has to translate into actual buying, the due process will commence.
What is the process?
The technical, cost-negotiation and quality teams sit with their counterparts from France and that’s when the process gets rolling.
It is only after all these teams give their go-ahead, and with the Air Force actively participating in it, the decision is taken. So, the processes begin and take 16 to 18 months, when the negotiations happen.
Why was the Rafale order scaled down from 126, under the UPA, to 36? What changed between 2007 and March 2015?
There was no scaling down at all. The UPA’s formula — 18 or one squadron in a flyaway condition and 108 to be produced by Hindustan Aeronautics Limited (HAL) — never saw the light of day. That’s the matrix they had before them. What are we doing? In place of 18, we are getting 36 in a flyaway condition, which is the equivalent of two squadrons. This is not a reduction but more. In their formulation, HAL and Dassault, if they were to come together, would produce over 108 fighters over a timeline that would be longer. Here, 36 will come in flyaway condition. As for the rest, we have issued a ‘Request for Information’ [for 114 fighter jets]. We’ve got seven companies that have shown interest and are now talking to them. So, the competition has been widened. There’s nothing to support the conclusion that we’ve reduced our requirement. As you have said, there is now an RFI for 114 fighter jets. Since this is going to be under a strategic partnership, it will necessarily have to involve a private player, so… It is for companies to decide who they want to join hands with. Under the strategic partnership, we have already come up with two deals — one for the Navy, one for the Air Force. Things are moving forward. So, if it is being suggested that we have mala fide intentions for taking this route, I’m sorry. The rules are well laid-out and we will go as per the rules.
You say the United Progressive Alliance (UPA)’s proposed deal was badly delayed, so how quickly do you hope to sew this deal up for 114 jets?
Even for the 36 we are acquiring, the timeline is between 2019 and 2022. So you can imagine what the timeline will be for the rest. It is going to take time if you’re talking of a large order. Even now, through the RFI and strategic partnership, cost will be something that we will seriously keep in mind. But however much time contraction we may desire, this will depend on maintenance of quality and scale of production by the manufacturer. Even if HAL had struck a deal with Dassault, it would have taken time to deliver the 108 aircraft.
You have said the secrecy clause in the general security agreement between India and France signed in 2008 by the UPA government applies to the Rafale acquisition. One view is that any information compromising national security or the aircraft’s operational capabilities may not be disclosed. In a parliamentary reply, the base cost of each Rafale jet was said to be Rs. 670 crore at the prevailing exchange rate in November 2016. Given this, why is there such a reluctance to mention the broad costs of the other add-ons — the India-specific enhancements, maintenance support, and services?
The basic price was disclosed in November 2016 itself. And then, again in January-February this year, when the question came up, it was answered. The India-specific conditions is where the government feels that disclosure will be handy for people who are watching us.
And their interest is not just in aeronautics! It is strategic. We don’t need to disclose and help them is the opinion we have and we are certainly quoting the 2008 agreement. My pet peeve is: doesn’t the Congress know about this? Wasn’t it the Congress [government] that signed it in 2008? Any government, irrespective of which party is in power, has to be conscious of national security… But now, we see the kind of clamour for information, not mindful of its implications. I’m really, really worried that in this matter, the Congress party is overdoing it.
Isn’t the national security argument weakened by the existence of information on such things as India-specific upgrades for Rafale in the social media ?
These have not been contradicted by the government. The government doesn’t go about refuting everything that floats around. The Opposition is talking of non-issues such as corruption and crony capitalism when there’s nothing. Not just in this defence deal but in no Ministry in this government is there corruption or crony capitalism. So if their objective is to go on a wild goose chase, so be it.
On the issue of numbers, it has been stated in Parliament that the Comptroller and Auditor General (CAG) will audit the Rafale deal, but it appears this will be done only after the deal is fully executed, which means some years from now. Given that there will be a financial audit, won’t the numbers become public anyway?
Well, that’s exactly the point. So if the CAG is looking into it, let them. Don’t we trust our own CAG? Otherwise why did the Congress party go marching into the CAG’s office? Since we are talking about due process, I say let the process follow. Let CAG look into it. We have no objection. In fact, we are duty bound.
Why was there no offset clause in the S-400 deal?
There are suggestions that the government wanted to avoid another round of allegations of crony capitalism, of the kind that have been levelled at the Rafale deal, because of Anil Ambani getting a good portion of the offset contracts.
Oh no. I think there are times when it comes to buying and having long-term agreements earlier, where we have had no offset clause.
But this is a huge deal commercially. Couldn’t we have secured an offset for it?
I am not suggesting this is the reason, but this argument does come up that when there is an offset, the prices get jacked up. This is an argument that does make the rounds.There are times when we choose to go through the offset route and at other times not. This is not just this government but happened even earlier.
Did your government recommend Anil Ambani as an offset partner for Dassault as suggested by former French President François Hollande?
As for what Mr. Hollande said, we don’t even have an official account of how many offset partners Dassault has. If you go by the media reports, there are more than 60-70 companies that have partnered for offset with the French companies.
So if I were to go by Mr. Hollande’s words, are we saying that Dassault had no option but to choose 70 offset partners? That we gave them a list of 70?
Do you think a closed door private briefing with the Opposition will help to iron out some of the differences? And if a JPC will put this issue at rest, why is the government reluctant to have one?
The Opposition wanted the price, so we disclosed that. Then they moved to something else. I am not sure they are even serious about wanting to know the cost. It is more to rake up a controversy.