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Dissecting a Defence Deal

Reviewed by Maqbool Ahmed Siraj

Flying Lies: India’s Biggest Defence Scandal
By Ravi Nair
Publisher: ParanjoyGuhaThakurta
Sold by Amazon Asia-Pacific Holdings
Can be downloaded from Amazon
Pages: 37, Kindle Edition: Rs. 49

The author makes it plain that the nation suffered a grievous loss at the cost of benefitting a crony capitalist even while the NDA Govt does not tire of mouthing slogans like ‘Make in India.”
Flying Lies by Ravi Nair is a must-read for all those who are going to vote this summer for a new Government in New Delhi. The book spread over just 37 pages a more elaborate work is said to be under compilation systematically unravels the tissue of lies around India’s biggest Defence deal known as Rafale Deal.
The deal came off against much-touted ‘Make in India’ slogan from a Government that does not tire of flaunting its patriotic credentials. The author concludes that it was nothing but aimed at benefitting a businessman friend who had virtually no experience in aircraft maintenance, let alone manufacturing. It denied the HAL, the most known public sector company, the opportunity to manufacture these aircrafts. Not only did it hike the price of the aircraft, but also brought down the numbers even as the Indian Air Force was facing a huge deficit of fighter aircraft against China’s increasing numbers. It ducked under the archaic Official Secrets Act, a colonial hangover, when it came to discussing the deal in public although commercial aspects of the deal were beyond the realm of secrecy.
Author Ravi Nair, the first scribe to expose the scandal, recounts how the Defence Minister and her Ministry was sidetracked by a Prime Minister who concluded the deal with French President Hollande during his April 2015 visit. It was at a time when the Indian Government had almost finalized a deal to buy 126 Rafale aircrafts at a price of Rs. 563 crore for each aircraft. According to Mr. Eric Trappier, CEO of the Dassault (the vendor of the Rafale), had signed a formal and complete agreement with HAL to manufacture 108 Rafale aircrafts in India. The new agreement reduced the number to 36 and hiked the price to Rs. 1,660 crore each aircraft. Apparently this was done to benefit Prime Minister Narendra Modi’s businessman friend Anil Ambani, whose company had outstanding liabilities of Rs. 1,21,000 crore. It was deep into debts to the tune of Rs. 45,000 crore. (Remember he was recently bailed out by his elder brother Mukesh Ambani in Ericsson case by clearing his Rs. 550 crore debt. Failure to do so would have landed him in jail).
Rafale is a Medium Multi Role Combat aircraft (MMRCA). A proposal to buy 126 of these aircraft for the Indian Air Force was mooted in 2000. But work began on it under the previous United Progressive Alliance (UPA) Government in 2007. The proposals were invited from six different aircraft from various manufacturers i.e., MIG-35 (Russian), JAS-39 (Sweden), Rafale from Dassault (France); F-16 Falcon from Lockheed Martin (USA), F/A-18 Super Hornet from Boeing (USA) and Eurofigher Typhoon (Consortium of EU called EADS). It was in January 2012 that Rafale was adjudged the most suitable in terms of price and life cycle cost. As per the deal, the winning company had to invest half of the total deal value in India for the manufacture of defence equipment. The company was liable to transfer the technology to HAL, the public sector company manufacturing defence aircraft in India. It is useful to be reminded that HAL was already manufacturing heavier aircraft Sukhoi and the transfer of technology would have only enhanced its expertise and employment potential. According to Mr. Suvarna Raju, former Chairman and Managing Director of Hindustan Aeronautics Limited (HAL) had signed the work-share agreement with the Dassault to the extent of 95%. It had in fact delivered 249 of the 272 Sukhoi Aircraft for the IAF for which it had a contract.
But Prime Minister went ahead to conclude the deal on his own without taking the Defence Minister, the Defence Acquisition Committee and expert panel on technology of the IAF.
Under the previous deal, Dassault had to transfer the manufacturing technology to HAL. But in Modi’s deal, the Dassault can tie-up with any private player of its choice. It was quite well known that no private Indian company had any experience in manufacturing of fighter aircraft. Yet, Dassault chose Anil Ambani’s company Reliance Aerostructure Limited (RAL) a subsidiary of the Reliance Defence Ltd as its Indian Offset Partner (IOP). It simply meant that the maintenance of the aircraft was to be in inexperienced hands. Hollande is quoted by the French magazine that the Indian Government ‘insisted’ on Dassault partnering Anil Ambani’s group in order to conclude the deal and that his Government had no option but to accept these terms as they were looking for business.
Finally, the book also debunks the lie that the HAL lacked expertise to manufacture the Rafale if the UPA deal had gone forward. Trappier had made it clear that Dassault had signed a formal and complete agreement with HAL to manufacture 108 Rafale aircrafts in India.
Even a cursory glance through the content makes it abundantly clear that the Modi government had misled the nation on several counts. Under the guise of secrecy that normally surrounds the Defence deals, it intended to benefit his cronies and deprive a leading public sector company like the HAL the opportunity to enhance its expertise to a new level even while creating ample employment opportunities. And faced with a probe, it did not think twice in replacing the CBI chief Alok Verma by another crony Rakesh Asthana through a midnight order. It even misled the Supreme Court by not submitting sufficient details of the deals.
The book is timely and helps the common man understand the complex details through lucid text.