Congress to make 'startling revelation' on Rafale deal today at 4 pm

Former defence minister AK Antony alleged that national security had been compromised in the Rafale fighter jets deal.

The Congress party has claimed that it will make some startling revelations related to the Rafale fighter jets deal at 4 pm on Tuesday. Addressing a press conference in the national capital, former defence minister AK Antony confirmed the same even as he attacked Prime Minister Narendra Modi-led government over the deal with the French government.

Antony questioned the claims of the central government that the deal struck by Modi government was more economical than the one by the previous Congress-led UPA government. “If the deal was cheaper, why only 36 jets were bought instead of 126,” said the veteran Congress leader.

The former defence minister alleged that national security had been compromised in the Rafale fighter jets deal. He also said that the government had disrespected Hindustan Aeronautics Limited (HAL) by cancelling its tender in the deal.

This comes just days after Union Defence Minister Nirmala Sitharaman alleged that the opposition was misleading the nation of the Rafale deal. She had also ruled out any engagement with the opposition over the same.

Speaking to news agency PTI, Sitharaman had said the government decided to go for procuring only two squadrons of Rafale jets as an emergency measure in the wake of China and Pakistan significantly ramping up their air power by inducting stealth fighters.

Here's the full statement Issued by Antony and Congress spokesperson Randeep Singh Surjewala on Tuesday:

Modi Govt is unforgivably guilty of gravely compromising ‘National Security’ in the Rafale Deal!

If Modi Govt’s Rafale Deal is Cheaper, then why buy only 36 aircrafts, instead of required 126?

1. The authorized squadron strength of fighter aircrafts for IAF is 42 squadrons. It has now come down to 31. In 2000, the IAF told the then NDA -1 Government that they require atleast 126 Fighter Aircrafts for Defence preparedness.

With looming threat on both our Eastern & Western borders; ‘Modern Air Power’ is very crucial for the Indian Air Force (IAF). In the present context, the IAF needs more than 126 fighter aircrafts at the earliest, but instead of catering to its requirements, the Narendra Modi Government seriously jeopardized India’s National Security & Air Combat preparedness by unilaterally ordering only 36 Rafale aircrafts instead of the required 126 aircrafts.

2. On 20.08.2007, UPA Government floated a tender for purchase of 126 ‘Medium Multi Role Combat Aircrafts’ (MMRCA). Indian Air Force found two aircrafts technically equal i.e. ‘Rafale’ and ‘Eurofighter Typhoon’. Incidentally, the ‘Request For Proposal’ (RFP) in the UPA tender had made it clear that the bids were to be inclusive of ‘cost of initial purchase, transfer of technology, licensed production, etc’.

3. Pursuant to the technical shortlisting, financial bids were invited. On 12.12.2012 and French based Dassault Aviation's Rafale emerged as L-1 vendor (Lowest Bidder). Out of 126 aircrafts, 18 aircrafts were to come from France in ‘fly away condition’ with remaining 108 aircrafts being manufactured in India by Public Sector Undertaking (PSU), Hindustan Aeronautics Limited (HAL) under the ‘Technology Transfer Agreement’. In addition, there was a 50% offset clause requiring Dassault Aviation to invest 50% costs of the aircraft in India as ‘Offsets’. On 13.03.2014, a ‘Work share Agreement’ was also signed between HAL and Dassault Aviation.

4. Indian Air Force for the first time demanded to include the ‘Life Cycle Cost’ as part of the contract. During the Contract negotiations, there were some disputes about the method of calculation of ‘Life Cycle Cost’ & some issues were resolved by HAL. Congress-UPA Government was seriously trying to resolve these teething issues and finalize the Contract, in India’s interests. Even as the Government at the Centre changed in May 2014, the negotiations were still going on and were almost at the final stages.

5. Instead of seriously trying to resolve those teething issues, Prime Minister, Shri Narendra Modi went to Paris and announced the unilateral purchase of 36 Rafale aircrafts under the Inter-Governmental Agreement (IGA) on 10th April, 2015.

(i) Who authorized Shri Narendra Modi to fix the number of fighter aircrafts from 126 to 36?

(ii) Importantly, PM Modi made this announcement while the ‘Contract Negotiations’ of the 126 aircrafts were in the final stages of discussion.

As per the Defence Procurement Procedures (DPP) – Defence Acquisition Council presided by the Defence Minister, consisting of Army Chief, Air Force Chief, Navy Chief, Defence Secretary, Secretary of Defence Finance, DRDO Chief, Coast Guard Chief & Secretary of Defence Production are the ONLY authorized body to decide the number and clear the tender. Isn’t Shri Modi’s decision a clear cut violation of the DPP?

(iii) After signing the purchase agreement of 36 Rafale aircrafts in April 2015, Modi Govt cancelled the 126 Rafale aircrafts contract only on 24 June 2015. Isn’t this again, a violation of the DPP?

6. If Congress-UPA deal of 126 Rafale aircrafts was not cancelled by the Modi Govt then Hindustan Aeronautics Limited (HAL) would have acquired ‘Transfer of Technology’ which was a key component of the RFP issued by the UPA. There is no ‘Transfer of Technology’ in Modi Govt’s Rafale Deal, which means:-

‘State of the Art Technology’ is the costliest thing to acquire, in today’s times. Modi Govt’s deal of 36 Rafales brazenly forgoes ‘Transfer of Technology’ clause. This means that the price of the aircraft must be substantially cheaper than the UPA deal, if it is without ‘Transfer of Technology’

Instead of HAL manufacturing the aircrafts, all the 36 are being produced in France, so the price must be again cheaper.

Instead of getting a cheaper price per aircraft, Modi Govt is purchasing 36 aircrafts for ₹60,145 Cr, as revealed by the Annual Report of Dassault Aviation & Reliance Press Release i.e ₹ 1670.70 Cr per aircraft; while during UPA-Congress Govt, per aircraft prices comes to ₹526.10 Cr i.e. ₹18,940 Cr for 36 aircrafts. Even without ‘Transfer of Technology’ why is the Modi Govt paying ₹41,205 Cr more for the deal?

Modi Govt’s Rafale deal squanders the ‘National Interest’ by forgoing the ‘Transfer of Technology’ and India lost the opportunity to get the most modern ‘State of the Art Technology’ to manufacture fighter aircrafts. Thousands of job opportunities of Indian technicians were lost in HAL.

7. Reliance was selected as the ‘Offset-Partner’ of this major contract. A company which had no prior experience in aircraft manufacturing will get substantial financial gain, bypassing the Public Sector Undertaking, HAL, which is the only company in India with decades of experience in manufacturing of fighter aircrafts.

8. Not only this, Prime Minister, Shri Narendra Modi justified ‘off-the shelf’ purchase of 36 Rafale aircrafts on the plea that there is an urgent requirement for acquisition of aircrafts on part of Indian Air Force. Yet, despite the expiry of our 3 years from 10th April, 2015; not a single aircraft has been delivered so far. It is now stated that the first aircraft will only be delivered by September 2019, with the final aircraft delivery going upto the September 2022, i.e 8 years after signing the Rafale deal of 36 aircrafts. This by itself proves that the National Security and our Defence preparedness have been severely compromised by Modi Govt.

‘SUPRESSION OF FACTS & FALSE CLAIMS BY DEFENCE MINISTER’

Claim 1: Now the Defence Minister is repeatedly saying, by their agreement to purchase 36 aircrafts, they are cheaper than the UPA’s proposal. Law Minister told the media on July 23rd 2018, that NDA’s agreement is 9% cheaper than UPA’s proposal. Finance Minister told the media on August 29th 2018, that their deal is 20% cheaper than UPA’s proposal. One officer of the Air Force told the media that it is 40% cheaper than UPA’s deal.

Counter 1: Let us assume for a moment that all these claims of NDA’s deal cheaper than UPA’s deal is true, then why didn’t PM, Shri Modi purchase ONLY 36 Rafale aircrafts, instead of 126 jets?

Clam 2: Modi Govt also claims that they shall be purchasing 110 additional fighter aircrafts with ‘Transfer of Technology’ & ‘Make in India’ clauses.

Counter 2: The Request For Proposal (RFP) of 110 MMRCA aircrafts is out only in July 6, 2018; 4 years after Shri Modi assumed office. This is ONLY the initial and the first stage of such a purchase. No International tender is in place. Moreover, the plan of producing these 110 aircrafts without a Public Sector Undertaking, HAL is only wishful thinking. No Private Indian Entity has ANY experience in manufacturing aircrafts. Even if this deal goes through, then also 126 aircrafts shall not arrive in India before 2030. i.e 30 years after the Indian Air Force asked for a requirement of 126 fighter aircrafts. It would have been better if the Modi Govt should have stuck to the UPA negotiated deal of 126 Rafale aircrafts and not compromised India’s National Security.

Claim 3: Defence Minister, Smt. Sitharaman claims that an unprecedented intervention in 2013 by then Defence Minister A K Antony when the cost negotiation committee was giving final touches to the deal put the final nail in the coffin.

Counter 3: Her allegations are completely false and she is deliberately suppressing the facts. ‘Contract Negotiations’ were almost over and when the proposal was sent to the Finance Ministry, The Finance Ministry felt that the ‘Life Cycle Cost Concept’ is a new concept and they cannot support it.

Then the Congress-UPA Government also received objections and reservations in written from various leaders including a senior BJP MP about the ‘Life Cycle Cost Calculation’; the Indian Air Force was insisting to finalize the deal and then I directed that the negotiations be continued, but take it to Cabinet Committee on Security (CCS), only after disputes are settled.

Claim 4: Smt. Sitharaman claims the UPA deal collapsed as HAL did not have the capability to produce 108 aircraft in India.

Counter 4: This claim by Defence Minister, Sitharaman is completely false. HAL is our Navratna Company. HAL attained the status of Navratna in 2007. It has a standing of 75 years and is the only Aerospace Manufacturing Company that can indigenously manufacture fighter aircrafts in India. It has manufactured 4060 aircrafts of 31 types- licensed aircrafts, UAV’s, helicopters that are supplied to 20 countries- these include Sukhoi 30’s, MiG-21 — FL, M, Bis and Bison upgrades variants, MiG-27 — M variant, Dornier 228, Jaguar, SEPECAT Jaguar— IS, IB and IM variants Vampire, Harlow PC-5 , BAE Hawk, Cheetah & Chetak (helicopters), LCA Tejas and many more.

It is unfortunate that Defence Minister of the country is trying to tarnish such a Nationally & Internationally reputed Public Sector Undertaking. We do not know what is her intention in doing so.
If HAL does not have the required capability, please let us know which company in India has the capability to manufacture fighter aircrafts?

Claim 5: Smt. Sitharaman says that the then UPA government could have come forward and pumped in resources into HAL, but they did not.

Counter 5: This is absolutely untrue. During Congress-UPA, HAL was a profit making company with ample cash reserves. We don’t know what her motivation in saying that is. Infact, it is the first time in history that under Modi Govt, HAL had to take a loan of Rs 1000 Cr from various banks to sustain its finances.

CONGRESS DEMANDS:

1. Congress party demands that the Modi Government publish the price of the Congress-UPA’s deal of 126 aircrafts and the price of Modi Govt’s 36 Rafale deals- including per aircraft price of the same. To clear the doubts of the people of India, let the Nation decide who is correct.

2. Since there is a growing perception that the Modi Govt’s ‘Rafale Purchase Deal’ has more skeletons in its closet, let there be Joint Parliamentary Probe (JPC) to bring the truth out in the open.