MoD Note on Rafale May Not be a Smoking Gun, But Govt Must Clarify
This may not quite be the smoking gun, but it is a definite clue to suggest that such a gun could exist somewhere. In other words, there is a problem with the Rafale deal for which the country deserves a clear-cut explanation.
It is entirely possible that if the government were to come upfront and reveal the details it has so far – somewhat ham-handedly concealing – there would be a satisfactory explanation.
Unfortunately, the information is coming in bits and pieces, some from France, some fromThe Hindu, some from the government’s own clarifications in response to the charges being levelled against them. This results in a somewhat disconnected picture, which only heightens suspicions.TakeThe Hindu’s scoop. It reveals a note by the Ministry of Defence saying that “parallel discussions by the PMO (on the Rafale) have weakened the negotiating position of the MOD and the Indian Negotiating Team (INT).”
The then-Defence Secretary Mohan Kumar had added, “RM (Raksha Mantri) may pl see. It is desirable that such discussions be avoided by the PMO as it undermines our negotiating position seriously.” This was on 1 December 2015.
These are strong words. The government’s defence has been that The Hindu has omitted the RM’s note clarifying that the PMO and the French President’s Office are monitoring the issue.
He said the MOD note appeared to be an “overreaction” and that “Def Sec may resolve issue/matter in consultation with Pr Sec to PM.” This response came on 11 January 2016, more than a month after the Defence Secretary’s notation. Clearly, Manohar Parrikar (the then-defence minister) had not been in any a hurry to set his secretary’s mind at rest.
The other defence of the government, as put out by ‘friendly’ media, is that the note was about a discussion on sovereign guarantees, and not pricing. There are issues here too.
First, there has been no claim that this was about pricing. Then, as for sovereign guarantees, the government has itself admitted to the Supreme Court that it did not get any from Dassault, the manufacturer of Rafale.
All they have is what the Attorney General told the Supreme Court – a ‘Letter of Comfort’ through which the French government has assured India that Dassault will fulfil the deal.
More important, however, is the question as to why the MOD was bypassed in this negotiation. There is no reason why the PMO could not have included a Negotiating Team representative in the process.
Equally important is the question as to why the Negotiating Team could not negotiate the sovereign guarantee as well. All said and done, the sovereign guarantee, which, eventually, did not come, is very much part of the give-and-take of the price negotiations.
The issue of pricing also comes up now. An earlier report had already noted that three of the seven members of the Indian Negotiating Team had objected to the benchmark price and the so-called design and development costs for the India-specific enhancements.
There are now reasons to believe that the government may have misled the Supreme Court because while it claimed in its note to the court that the Indian Negotiating Team was involved in the process, it had said nothing about any significant PMO role.
But now, as it turns out, the PMO had been playing a covert, if unspecified, role in the process.
Sudhansu Mohanty, who worked as Financial Adviser Defence Services before retiring in March 2016, has pointed in a recent article for The Wire that under the current procurement procedures, there is no role for National Security Adviser Ajit Doval in finalising the terms and conditions of the Rafale contract.
This is true of the PMO as a whole since they were not designated members of the Contract Negotiating Committee (the same INT) under the Defence Procurement Procedure (DPP) 2013. Neither was he (Doval), nor any of them formally co-opted into the INT.
Under DPP 2013, the criteria has been laid out for constituting an INT. Any change in the procedure would have had to have the approval of the Director General (Acquisition). It has, for example, laid out the guidelines for inducting a specialist service officer, but this must be with the approval of the RM.
Appendix B has laid out the typical INT for a particular acquisition. The document does not mention NSA or PMO at any place. The reason is the presumption that once the government has approved a deal, the specific negotiation over price and terms and conditions needs to be done by domain experts.
As we noted at the outset, this may not be a ‘smoking gun’, but it’s pretty close to one. The government has taken the high road claiming that security concerns prevent it from providing key information on the deal. This is nonsense.
Pricing information is not a secret, but the right of the taxpayer who funds the government. What is secret in high performance jets is not their price, their general shape, the engines they have, but the guts of the aircraft, especially the electronics and the materials they may be made of.
What the public wants to know, in clear-cut terms, is the rationale for the government to have scrapped the old deal and bought the aircraft at a higher cost than had been earlier negotiated.
They want to know whether proper procedures were followed in this process. And now, there is evidence to suggest that they were not. If not, the government needs to give us a clear explanation as to why not.