In other countries, it would have been a badge of shame for the Government, Bureaucracy, Defense Industry and the citizenry as a whole. In India, it has become an ugly no-holds-barred slugfest like none other. Endless discussions, numerous debates and multitudes of expert opinions have pervaded the national discourse on just one topic these days. Apparently, the topic on which everyone in India and apparently a few abroad, have become an expert is Dassault Rafale. Every moment, new facts, truths, half-truths, and blunt lies are being tossed about in the Print, Television & Social Media and apparently, some so-called experts have started a smear campaign to malign the name of the Prime Minister, labeling him as a chor (thief) and much more. What is the whole issue about? Pick any hundred shouting at the very top of their voices and ask them about the issue. Not one would be able to go beyond the generality and much-used catchphrases like Scam, Ambani-Adani, Modi, France. Most, if not all, detractors of the defense deal have a half-baked understanding of the fighter aircraft in general and would be unable to differentiate between an interceptor and an air-superiority fighter in any literature. Conversely, the supporters of the deal, in their standard fashion, have built walls of ignorance so high that it puts even Mount Everest to shame. While most (though not all) of the questions of the detractors are logical and valid, tagging every detractor as an Urban Naxal while ignoring his line of questioning won’t work. It’s time for the supporters and detractors of the deal to gain a meaningful insight into the entire deal and then form an opinion on the issue.
The entire fiasco has its roots way back in 2001 when the Indian Air force had projected a requirement for 126 (seven squadrons of 18 aircrafts each) aircraft. The strength of the IAF was starting to fall. It has last acquired an aircraft (Mirage-2000) in the 1980s and the acquisition of the Sukhois (-30MKI) was starting to gain steam. The initial requirements were for a 20-ton class fighter aircraft with medium role capability which would fill the multi-role niche between the heavy-hitter Sukhoi Su-30MKI (an air superiority fighter) and the MiG-21/Tejas (a smaller multi-role interdictor). Apparently impressed by the Mirage 2000s bomb lugging capability at high altitudes during the Kargil War, the IAF was keen to acquire the Mirages and had quietly made up its mind to acquire the same until the French Aerospace industry and Rafale, in particular, threw a spanner in their works. However, the French aerospace industry was winding down Mirage 2000 production due to lack of orders and preparing for the manufacture of the Rafale aircraft. Apparently, the French Air Force needed it Rafales faster (point to be noted- the Rafale is the next iteration of the Mirage-2000 fighter and the current mainstay fighter of the French Air Force). The Mirage production line was shutting down and the French could only keep it open if India gave a firm order. But we are Indians, have we ever committed to anything without first bargaining and comparing the hell out of it?
Hence, Requests for Information (RFI) were issued in 2004. In the formative years of the tendering, aircraft in the running were: Mirage 2000-5 Mk.2 (Dassault, France), F-16C/D (Lockheed Martin, USA), MiG-29OVT (Mikoyan, Russia), and JAS 39 Gripen (Saab, Sweden). Preliminary estimates pegged the costs in the neighborhood of INR 55,000 crore (US$8.6 billion), making it India’s single largest defense deal. However, the 20-ton MTOW (maximum take-off weight) limit requirement was later removed and this limit was revised to 24-tons. Given the protracted nature of the tendering and the past governmental acquisition timelines, Dassault replaced the Mirage 2000-5 with the Rafale and the MiG Company placed MiG-35 in instead of the prototype MiG-29OVT. The Eurofighter consortium entered the Typhoon into the competition. Not wanting to be outdone, the Boeing F/A-18E/F Super Hornet also joined the tendering. Given the vagueness of the clauses, all aircraft, single engine or double and both light and heavy became a part of the fray.
As per one defense analyst, this deal meant that The Indian Air force was comparing every four-wheel vehicle from a Maruti 800 and a tractor when it just needed a jeep.
The Indian government had initially planned to buy the first 18 aircraft directly from the manufacturer. The remaining fighters will be built under license with a transfer of technology (ToT) by HAL. After an intensive and detailed technical evaluation by the IAF, in 2011, the competition has reduced the bidders to two fighters — Eurofighter Typhoon and Dassault Rafale. On 31 January 2012, it was announced that Dassault Rafale won the competition due to its lower life-cycle cost. The deal has been reported to cost US$28–30 billion in 2014. However, the French refused to provide any guarantees for the 108 aircraft that would be manufactured by HAL. The deal went back to the chopping block and the fleet strength of the IAF continued to deplete at alarming rates. A report commissioned under the erstwhile UPA slammed the HAL’s practices and there were some serious differences between HAL and Dassault on the various fronts.
In light of this, on April 10, 2015, Prime Minister Modi declared: ‘Keeping in mind the critical operational necessity of fighter aircraft in India, I have discussed with the president (of France) the purchase of 36 Rafale fighters in ‘fly-away condition’ at the earliest through an inter-governmental agreement.’ However, the Congress party alleges that the Modi government, in buying 36 Rafales for €7.8 billion ($9.2 billion or Rs 58,000 crore/Rs 50 billion), paid more than what Dassault had quoted in the MMRCA tender but a full breakdown of figures is essential as the total cost of a fighter contract includes — besides the cost of the aircraft — costs related to technology transfer, spare parts, weapons and missiles, added-on equipment and maintenance costs. Moreover, the same aircraft Rafale has also be bought by the Governments of Egypt and Qatar.
A closer look at the costs shows that the contracted price averages out to €91.7 million (Rs 686 crore/Rs 6.86 billion) per Rafale which includes the purchase of 28 single-seat fighters, for €91.07 million (Rs 681 crore/Rs 6.81 billion) each; and eight twin-seat fighters, each priced at €94 million (Rs 703 crore/Rs 7.03 billion). That puts the cost of each of the 36 fighters at €91.7 million (Rs 686 crore) — totaling up to €3.3 billion.
Besides this, the IAF will pay €1.7 billion for ‘India-specific enhancements’, €700 million for weaponry such as Meteor and SCALP missiles, €1.8 billion for spare parts and engines, and €350 million for ‘performance-based logistics’, to ensure that at least 75 percent of the Rafale fleet remains operationally available (our Sukhoi serviceability is an abysmal 50%). We are paying extra for the India specific enhancements that were earlier not the part of the generic aircraft selected via the MMRCA process. Also, while such a direct comparison is not right, prima facie the IAF is paying more or less the same as the EAF and the QAF. The Egyptian air force has paid €5.2 billion for 24 fighters and is reportedly considering buying 12 more, a ‘fully loaded cost’ of €217 million per Rafale. Similarly, the Qatar air force has paid out €6.3 billion for a similar number of aircraft, with a ‘fully loaded cost’ of €262 million per fighter.
The opposition Congress is arguing that by reducing the buy from 126 aircraft for which a sum of (520-700 crores per aircraft, varying in every speech) to just 36 aircraft (700-1600 crores), the present dispensation is causing a scam of epic propositions. There are also serious concerns about the offer being made to Reliance instead of HAL to partner with the deal. While concerns about the apparent lack of Reliance’s experience in making aircraft is genuine, this is no excuse to mock and needlessly criticize a perfectly valid deal. One Congress legislator had even claimed that he would make a better plane than Reliance and mockingly flew a paper plane in the august presence of elected public representatives. Wish making fighter jets was only that simple. However, they seem to forget that Reliance is not going to manufacture any aircraft. It is just a part of an Indian Consortium which will be benefitted by offsets as part of the deal. Why Reliance? Yes, this is a question that needs to be asked and should be answered. The choice was primarily dictated by Dassault’s need to gain a foothold in Indian Markets and tap the rich moolah in the pockets of Indian Industrialists. Given the tie-up between Tata ASL and Lockheed Martin & Pilatus, Honeywell and HAL, Adani and Elbit Systems of Israel and Mahindra taking a heavy plunge in the aviation industry with its acquisition of Gipps Aerospace, Dassault was wary of being caught napping and needed a partner that would be accommodative for them and assertive for others. Reliance Group fit the bill perfectly and while many have been accusing the govt. for crony capitalism, the Dassault-Reliance tie-up is one of survival.
Many have also lamented that private industries are being promoted at the cost of public institutions. Well, only HAL can be blamed for this mess. Not only has HAL chronically underperformed over the years and hamstrung the IAF’s expansion plans (read Sukhoi SU-30MKI) by its ineptitude, it is also overcharging the Indian Tax-payer for basic jets like the domestic Tejas. Recent estimates show that the much-hyped Tejas (named by our former PM Atal Bihari Vajpayee during his regime) is still facing teething troubles even after 2 decades in testing & production and the costs have ballooned exponentially over the years. It is being reported that each Tejas will cost between 460-480 crores per platform which is significantly higher than other fighters for its niche (read JF-17, FC-1) and certainly not making sense in any way. It’s an irony that people accusing the present dispensation of allowing private players to siphon taxpayers’ money are either unaware or simply don’t care that the public sector undertaking is just as expensive (if not more) with the added downside of inefficiency and lethargy. It must also be pointed out that HAL Dhruvs (a light helicopter) manufactured by the PSU have had serious doubts raised about their capability and a South American nation has mothballed all its Dhruvs after a significant no. of them crashed within a short span of time. It is only logical that any foreign manufacturer would be hesitant to partner with HAL. If there is indeed something wrong in this deal, it is the sorry state of affairs at HAL and the government must take immediate steps to resolve it.
On an ending note, defense procurements in India and around the globe have always been shrouded in mist and with good reason. Given the stringent security clauses, unique modifications and country-specific costing, it is near impossible to compare figures across the board, unlike the Big Mac Index. While everyone has the right to an opinion, it should be exercised with caution and should never be misused. The fleet strength of the IAF is rapidly depleting and the Rafales are needed. The opposition is being hypocritical by painting its inability to close a deal in a decade (remember, Saint Antony of the “You can’t be accused of corruption if you do nothing” fame) as a done deal and conveniently forgetting the facts and reports, it had itself prepared. The Government, on the other hand, is doing a poor job by its high on rhetoric and low on facts media reporting. The deal is tough and not easily understandable for all because it is meant to be that way. Having a simple analogy to substitute for this deal is hilarious and plainly, uncalled for. Something must be left to the experts and not brought down to the floor. We are, after all, buying a Mach 2 capable fighter plane, not the bhaziya-tamatar of everyday use. While common sense should prevail on this issue of national importance and the cacophony should subside, it is highly unlikely in the coming days and the slugfest will continue. Meanwhile, the only casualty in this conflict will be the Indian Air Force and its brave pilots, who continue to fly old and unsafe planes for the foreseeable future to come.
