Rafale deal not govt-to-govt pact, says Kapil Sibal

The Congress on Wednesday alleged that the deal is not a “government-to-government” pact between India and France as is being suggested by the government.

It said the Centre should not have signed the contract with Dassault alleging that it was a “non-complaint” vendor as it had not given assurances on aircraft quality and on man-hours required for manufacture of the jets.

The Congress, however, did not ask the government to scrap the contract.

Addressing a press conference, senior Congress leader Kapil Sibal claimed France has never done a government-to-government contract on defence. “This is not a government to government contract. Dassault should make a public statement if they ever had a Government to Government contract prior to this. In fact, there is no such procedure in France,” he said.

“In this case… the people who negotiated the deal were Dassault representatives along with Eric Trappier himself…. That is on the side of Dassault and on the Indian side Ministry of Defence and Air Force officials negotiated the deal. The only thing that happened was that the Government of France gave a confirmation letter. The negotiations were done by Dassault. How could it be a Government to Government contract?” he asked.

Sibal claimed Dassault was a non-compliant vendor.

“In the bid that Dassault gave, it provided the number of hours to be taken for manufacture of 108 aircraft…. The HAL had opposed that figure and said the man hours that you are claiming is wrong…. It had said it will take almost three times the number of man-hours. Actually the exact is 2.74. Dassault was asked to back its claim by providing an affidavit or an undertaking. Dassault refused to give either the affidavit or the undertaking and under Government of India procedures Dassault became non-complaint.

“Had they given the total number of hours, it would have been L-2. Therefore, they did not give that affidavit. Once it became non-compliant, Government of India cannot have any contract with Dassault,” he said.

He said the government had also asked Dassault to take “full responsibility for the production, quality and performance of the 108 aircraft” but it flatly refused.

Source: Indian Express

Modi Compromised National Security, Hiked Prices of Rafale Jet Deal to Favor Anil Ambani’s Reliance Defence: Congress

The Congress on Thursday alleged that Prime Minister Narendra Modi had enhanced and hiked the benchmark price for for the Rafale fighter jet deal from 5.2 billion Euros to 8.2 billion Euros and discarded objections by one of his own ministries on the sovereign guarantee issue.

It said the “entire spectrum of deception” on the deal “lies at the doorstep of the Prime Minister”, The Indian Express claimed in a report.

The CPI(M), too, hit out at the government demanding a Supreme Court-monitored SIT probe into the deal.

The Congress communication department head Randeep Surjewala claimed that the negotiating team had “a serious dispute” on the benchmark price, which was referred to the then Defence Minister Manohar Parrikar.

Manohar Parrikar refused to hike prices of Rafale

“Parrikar as also the Defence Acquisition Council (DAC) headed by the Defence Minister and the chiefs of the three armed forces also didn’t agree and could not decide on the higher benchmark price of € 8.2 Billion. So DAC referred it to Cabinet Committee on Security (CSS) headed by the Prime Minister. PM Modi as the head of the CCS accepted the higher benchmark price without any negotiations or inquiry. Why did the Prime Minister set a higher benchmark price,” Sujrewala asked.

The Law Ministry had on December 9, 2015 “flagged the issue of “No Bank Guarantee/ Sovereign Guarantee” by the French Government and noted the concern that the contract involves huge payouts from the public exchequer without actual delivery in the form of advance payments.

The then Defence Minister Parikkar, Surjewala claimed, had in March 2016 refused to “opine of accepting the Letter of Comfort in lieu of bank-French government guarantee. The Air Acquisition Wing of the Defence Ministry, on the other hand, had put up a note in August of that year stating that “Bank Guarantees may be insisted from French side as required under our procedure and Indian side may bear the Bank Guarantee charges.”

Modi Waved Off Bank Guarantee

He said the Law Ministry reiterated its view and conveyed it again to the Defence Ministry on August 24, but the “very next day, PM Modi as head of the CCS accepted the ‘Letter of Comfort’ and waived off the condition of ‘Bank Guarantee/French Government Sovereign Guarantee’.”

“Why did PM Modi compromise national interests by waiving the Bank Guarantee/French Government’s Sovereign Guarantee’ in violation of Defence Procurement Procedure?” he asked. The Congress has alleged that all this was done only to favour one company Reliance Defence which is headed by Anil Ambani and levelled charges of crony capitalism on the BJP Central Govt.

On Wednesday, Attorney General K K Venugopal had told the Supreme Court no “sovereign guarantee” was given by the French government but it had issued a “letter of comfort” that was good enough to be “governmental guarantee”, according to a report in The Hindu.

Defence Minister Parrikar refused to accept Letter of Comfort

Sujrewala also claimed that Mr. Parrikar had refused to accept the “letter of comfort” in place of a sovereign/bank guarantee and cited an August 18, 2016 note in which the Air Acquisition wing of the Defence Ministry stated, “Bank Guarantees may be insisted from French side as required under our procedure and Indian side may bear the Bank Guarantee charges”.

CPM general secretary Sitaram Yechury said the government’s own admission in the Supreme Court that there is no sovereign guarantee from the French government but only a letter of comfort which is not legally enforceable to ensure the delivery of this high-value contract was sensational.

with inputs from The Hindu & Indian Express

Rafale Deal: Technical HODs at Dassault Aviation claim Reliance Defence was never the first choice, decision to drop HAL was taken by CEO Eric Trappier at the last minute

In complete contradiction to what an official press statement from the French aviation giant Dassault Aviation, manufacturers of the Rafale fighter aircraft say, two top technical heads at Dassault Aviation (DA) have claimed in an exclusive interview with IndiaScoops.com, that the entire technical staff team at Dassault Aviation were unhappy with the move to drop the Indian PSU Hindustan Aeronautics Ltd (HAL) and go ahead with Reliance Defence Ltd.

Speaking to IndiaScoops.com on phone, the two internal experts pointed out that there was a discussion between officials at DA and several emails were exchanged over a period of 7-8 days. The entire technical team wanted to work with HAL, but the decision was overruled by the top DA management headed by CEO Eric Trappier at the last minute.

Also Read: GOI told us take Reliance or No Deal: Former top Hollande aide stands by ex-President’s statements on Rafale

“We were sure we would be working with HAL and not any other Indian company. At least a 100 emails went to and fro from different departments at DA on the issue. At the last minute, we were informed that HAL was dropped and a new Indian company with whom we had never worked before and which had no expertise in manufacturing fighter aircraft was selected for the job. The entire technical team and our team heads and HODs were shocked. It was a bolt from the blue. But we had to follow instructions. At the end of the day, it’s profitability for the company that matters and if the top management decided to work with Reliance Defence, we had to toe the line. We all knew that the new company had no expertise, no experience. Internally, this issue was discussed among the technical HODs on email and several emails went to and fro. But it was CEO Eric Trappier and a couple of other officials’ at DA who took the decision to go with Reliance Defence,” the officials told IndiaScoops.com.

The decision to drop HAL and go with Reliance Defence Ltd was that of CEO Eric Trappier and two others who mysteriously refused to listen to any advice of the departmental HODs and selected Reliance on the grounds that the deal would be scrapped, they told IndiaScoops.com in an exclusive interview.

“We were told the Indian government would have scrapped the deal if Reliance was not taken on board. (Read Here) Scrapping the deal would mean losses for the company and hence the top management headed by CEO Eric Trappier  took the decision to work with Reliance, even though the in-house technical HODs had vetoed working with a new company having no experience and expertise – this was the official explanation given to the team. The technical HODs told the Dassault Aviation top management that handing over the contract to a new company would compromise and jeopardize the technology and equipment as well as be hazardous for the over-all image of DA as a world-class manufacturer of fighter aircraft. This has been put in writing on several emails, but the final decision by CEO Eric Trappier and two others  was in favor of Reliance Defence,” they told IndiaScoops.com.

IndiaScoops.com has with held the names of the officials concerned to protect their identity as “confidential sources” primarily as they are not authorized by DA to speak to the media, given the fact they head vital technical teams at DA and revealing their identity would violate their employment contracts and also prevent us from accessing further information.

Dassault, one of the world’s most established and experienced defence manufacturers, picked Anil Ambani’s debt-ridden firm as a partner in India, “because it was registered with the MCA (Ministry of Corporate Affairs) and had land in Nagpur which provided access to the runway,” said top sources at the French firm, in a damage control move, speaking to NDTV on the condition of anonymity.

As justification, those reasons are unlikely to tamp down the opposition’s allegations that Anil Ambani benefited from brazen crony capitalism in a massive $8.6 billion deal for India’s purchase of 36 Rafale fighter jets from France, a deal that was negotiated personally and then announced by Prime Minister Narendra Modi in 2016 during a visit to Paris, reports NDTV.

According to an Economic Times (ET) report, the French government has said it was in no manner involved in the choice of Indian industrial partners for the multi-billion dollar Rafale fighter jet deal as former French president Francois Hollande’s reported comments that New Delhi proposed Reliance Defence as the Indian partner for the contract escalated the political row over it.

While the French government said French companies have the full freedom to select Indian firms for the deal, Dassault Aviation, the makers of Rafale, said it had made the decision to partner with Reliance Defence Ltd, reported ET.

Both the French government and French aerospace company Dassault issued separate and varying statements following a French media report which quoted Hollande as saying that the Indian government proposed Reliance Defence as the partner for French aerospace giant in the Rs 58,000 crore Rafale deal and France did not have a choice.

The sensational comments quoted to Hollande by French publication ‘Mediapart’ gave a new twist to the controversy as the Indian government has been maintaining it was not officially aware of whom the Dassault Aviation has selected as its Indian partner to fulfill offset obligations of the deal.

Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after holding talks with then French President Hollande on April 10, 2015 in Paris.

“The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies,” the French government said in its statement as quoted by ET.

NDTV reported that Hollande’s office said he stood by his earlier remarks and statements made to Mediapart.

Hollande’s comments drew sharp reactions from the opposition parties in India, which have been accusing the government of massive irregularities in the deal and benefiting Reliance Defence Ltd (RDL) despite not having any experience in the aerospace sector.

According to a report in The Hindu, the former French President Francois Hollande claimed that the Indian government suggested industrialist Anil Ambani’s company as the offset partner for the €7.87 billion deal to purchase 36 Rafale fighter jets. Hollande was the French President at the time the deal was signed in 2015.

He told a French news outlet, Mediapart.fr, on Friday that his government didn’t have “a choice” in the selection of Reliance Defence, the company owned by Anil Ambani.

“It is the Indian government which has proposed this service group and it is Dassault that has negotiated with Ambani. We didn’t have a choice, we took the interlocutor that was given to us,” he was quoted as saying.

Repeated assertions
His comments fly in the face of repeated assertions made at the highest level of the Indian government that it was Dassault Aviation (DA) that selected Reliance Defence as its offset partner. Defence Minister Nirmala Sitharaman had said “no offset contract has been signed so far” and an agreement between two companies did not require the permission of the government.

“As per the applicable guidelines, DA is free to select the Indian offset Partners and provide their details at the time of seeking offset credits, or one-year prior to the discharge of offset obligation,” the government had stated.

Responding to Hollande’s comments, the Defence Ministry tweeted that the statement was being “verified.” “It is reiterated that neither [the] Government of India nor [the] French Government had any say in the commercial decision,” the Ministry said in a tweet.

In September 2016, India and France signed a €7.87 bn agreement for 36 Rafale jets in fly-away condition. The deal includes aircraft, spares, weapons, maintenance and performance guarantee for five years. The deal has a 50% offset clause to be executed by DA and its partners. Under this, DA and Reliance Defence have set up a joint venture to manufacture aerospace components.

In a recent interview Ms. Sitharaman denied any government role in the choice of offset partner in the Rafale deal.

She had said, “Isn’t that a decision of a commercial enterprise to take on its own? I have nothing to do with it. I have not prompted them, not led them, not told them, not instructed them. I have not done any match-making whatsoever.”

The Reliance Group had stated that it got the offset contract from DA and did not receive any contract from the Defence Ministry till date.

with inputs from The Hindu and The Economic Times

Even Before Bhushan, Sinha and Shourie Could Begin Their PC, Media Houses and Editors Discreetly ‘Told’ to Prominently Incorporate Govt’s Views on Rafale Scam

Even before former cabinet ministers in the Atal Bihari Vajpayee government, Arun Shourie and Yashwant Sinha, along with Supreme Court advocate Prashant Bhushan could begin their Press Conference (PC) at the Delhi Press Club on Wednesday, regarding the Rafale Jet Fighter deal, senior I&B and PMO officials were furiously working their phones.

IndiaScoops.com has learnt that government officials and BJP spokespersons including a PR agency phoned several ‘friendly’ editors of newspapers and news TV channels requesting them to either boycott the PC or relegate it’s coverage to the inner pages and non-peak time TV telecast.

The Anil Dhirubhai Ambani Group PR team was also on its toes, trying to find out which correspondents were attending the event.

IndiaScoops.com  spoke to five senior editors – three from national dailies and two from mainline news channels who admitted off the record that they got ‘how are you’ calls from the I&B Ministry and the PMO inquiring if they were covering the PC called by the trio.

Other editors from pro-BJP outlets refused to speak to IndiaScoops.com, or simply banged down the phone when queried on the subject, but their impulsive curtness was an indication of their indignation.

Two editors told IndiaScoops.com that they were asked as to which reporter or correspondent was covering the event, while others were indirectly advised and reminded to prominently feature the government view in their reportage of the PC.

According to a report in the Indian Express at a press meet, Shourie, Sinha and Bhushan said public sector unit Hindustan Aeronautics Limited, which was part of the original negotiations, was pushed out and a newly-minted company, Reliance Defence Ltd, which had zero experience in defence manufacturing bagged an offset contract. They said such an agreement between Reliance Defence and Dassault Aviation, which makes Rafale jets, should have come after governmental approval.

Sinha said Bofors “pales into insignificance” when compared to this “scam”. They said statements of then foreign secretary S Jaishankar and Defence Minister Manohar Parrikar suggest that none of them were aware of the new deal to buy 36 jets, against 126 aircraft as per a Request for Proposal issued in 2007, for which Dassault had been selected as it was the lowest bidder, reports the Indian Express.

“Nobody in the Air Force or the defence ministry was aware” of the reduction, Bhushan told media persons at the PC.

They also said there were no additional add-ons as per Indian specifications, as claimed by the government, compared to the original RFP. They quoted the joint statement by India and France on April 10, 2015, which mentioned that the 36 jets to be delivered by Dassault “and associated systems and weapons would be delivered on the same configuration as had been tested and approved by the Indian Air Force”.

Calling it an “enormous scandal which jeopardizes national security”, Shourie asked the government to make details of the deal public, reports Indian Express.

Regarding Dassault’s deal with Reliance Defence, he asked if it could have happened “without a nudge and a wink” from the government. He highlighted that offset guidelines of the government issued on April 1, 2016, mention that “all offset proposals will be processed by the Acquisition Manager and approved by Raksha Mantri, regardless of their value”.

A joint statement issued by the Bhushan, Sinha and Shourie said, “Could an experienced manufacturer like Dassault have picked a company that had no experience whatsoever of manufacturing aircraft…without the approval from the government and particularly the PM?”

The statement said a “private party which has had absolutely no experience in manufacturing aerospace and defence equipment has been handed an enormous financial benefit.” They demanded an independent audit by Comptroller and Auditor General.

The government machiney spun into action immediately after the PC was over. A statement was ready and emailed to most media persons. Correspondents from wire services were also sent the government’s version to counter the allegations made by the trio.

A few hours after the press meet, Arun Jaitley wrote in a blog post, “There is not a grain of truth in the wild allegations repeated today nor anything substantiating in the purported facts and voluminous documents marshaled to corroborate the baseless accusations,” he claimed

Jaitley added that the allegations constitute nothing but “reprocessed lies by forces increasingly desperate to prove their relevance”. He said the government had already responded effectively to every distortion and misinformation on the issue.” reported the Indian Express.

with inputs from Indian Express and Agencies