On December 14, 2018 the Supreme Court upheld the Rafale deal, stating that no irregularities or corruption had been found, thus burying the case for good. However two recent disclosures have brought it back into focus.

One is related to a gentleman who received €1 million from the Rafale manufacturer to make his aircraft models, which of course he never made. He had reportedly also figured in some earlier defence deals such as the VVIP helicopters by Augusta Westland.

Now a magazine called New Post reports the sale of 30 Rafale fighter jets for $4.5 billion to Egypt, as against the sale of 36 of the same aircraft to India for $8.7 billion - or 7.87 billion as per the Government of India.

India paid almost three times for this aircraft what it had negotiated some years earlier. What has come to light is possibly just the tip of an iceberg.

It is alleged that the aircraft now provided to India has some additional, ‘India-specific’ weapons and equipment, such as tailormade enhancements at a cost of €1.8 billion / ₹13,470 crore, a weapons package costing €710 million / ₹5,313 crore, and a performance-based logistics agreement at a cost of €353 million or ₹2,641 crore.

The weaponry procured includes missiles such as the MICA and Meteor beyond visual range air-to-air missiles and SCALP air-to-ground cruise missiles. The India specific enhancements include Israeli-made helmet-mounted displays, radar warning receivers and low-band jammers.

The cost of these ‘add ons’ appears to exceed the cost of the fighter aircraft itself. Presumably the ones bought by Egypt are for just joy rides and ceremonial display!

Another feature of corruption in various defence deals is that information related to bribery surfaces in the country providing the weapons and equipment, but never from within India. Such was the case with Bofors and again with Augusta Westland. Even in the case of Rafale, the information of €1 million paid to one individual came from the Rafale manufacturers’ audit report.

Further audit appears to have been stopped, or perhaps information pertaining to additional disclosures has been clamped down.

In the period India imported weapons and equipment from the USSR, no information of malpractices or corruption filtered out from behind that iron curtain. Possibly bribery then was more rampant than defence equipment purchased from other countries.

While bribery stalks almost every deal in government, it is the purchase of military equipment that draws all the flak for the malpractices invariably embedded in these deals. A feature peculiar to corruption in the import of military equipment is that the actual culprits are seldom brought to heel. They are normally sent off on constitutional posts, or simply permitted to leave the country, thus placing them outside the reach of the long, though palsied arm of the law.

In other cases their tracks of malfeasance are adequately covered.

Gandhi family friend Octavio Quattrochi, a middleman representing the Italian firm Snamprogetti was involved in the Bofors deal and was allowed to escape from India. The then defence secretary, who was chargesheeted by the CBI, was sent off as Lt-Governor, placing him outside the reach of law.

Then there is this effort to fox the public, where the deal is projected as government to government, whereas the government of the country from where the weapon/equipment is being purchased merely acts as facilitator.

Sometimes to bring a particular weapon/equipment into the reckoning, tampering with the General Staff Qualitative Requirement (GSQR) takes place. Such manipulation could be geared toward making it a single-vendor case, thus eliminating the issue of comparative bidding. In the case of the Bofors gun, to make the purchase appear free from any suspicion, the Army was made to change its order of preference from the French gun to Bofors.

The issue of preference had little value in comparative bidding, where the cost of the weapon/equipment and other issues, such as provision of spares, technical support, transfer of technology etc mainly come into play and have a bearing on the final selection. However, it was an attempt to make the deal appear clean as also make it a single vendor deal.

In the case of the Augusta Westland Helicopter, the QR itself was altered to get this aircraft into purchase reckoning and eventually make it a single vendor case. The required ceiling, or the height up to which it could fly was reduced from 6,000 metres to 4,500 to allow it to join the race. Then the National Security Guard stepped in to demand an increase in the helicopter cabin height from 1.5 metres to 1.8 as laid down in the QR. This single requirement eliminated all other contenders.

The NSG chief is believed to have visited the Augusta helicopter factory twice. While the Air Chief was hauled up, others who were instrumental in asking for a change in the helicopter’s parameters, merely to make it exclusive (such as the height of the cabin) with no justification were simply left out.

In single vendor cases, a Contract Negotiation Committee is required to establish a benchmark of reasonableness of price prior to the opening of the commercial offer. Now if the price indicated by the supplier is within the buyer’s estimated cost, price negotiations are generally dispensed with.

Coming back to the Rafale deal, the agreement included a 50% “offset clause”, which required the companies involved in the agreement - primarily Dassault, Thales, Safran and MBDA - to invest 50% of the contract value, approximately €3.9 billion or ₹30,000 crore, back into India with Dassault Reliance Aerospace Limited in an effort to promote Indian defence equipment manufacturers.

The Reliance Group and Dassault Aviation issued a joint statement announcing the creation of this 51:49 joint venture named Dassault Reliance Aerospace Limited to focus on aero structures, electronics and engine components, as well as to foster research and development projects under the “Indigenously Designed Developed and Manufactured” initiative.

The joint venture was to manufacture components for the Legacy Falcon 2000 series of jets such as the nose, cockpit and doors at the DRAL facility in Nagpur starting from January 2018. The question is whether the Reliance group has the elementary skill and capability in this field.

Lt General Harwant Singh is retired from the Indian Army.

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