The book, "The Rafale Deal: Flying Lies? The Role of Prime Minister Narendra Modi in India’s Biggest Defense Scandal" was published in December 2022.
Here's a second part of the three session interviews, where Anubandh KATÉ continues his conversation with India's leading investigative journalists & authors Ravi NAIR and Paranjoy GUHA-THAKURTA, along with Yann PHILIPPIN of Mediapart, France. In this session, we go deeper in our analysis of the India specific details of this hugely controversial defense deal.
In a dramatic turnaround of events, the Prime Minister of India, Narendra MODI, on an official visit to France in April 2015 scrapped the original deal to procure 126 Rafale jets (18 fly away, manufactured in France + 108 to be manufactured in India by HAL, with a Transfer of Technology clause) from France (Dassault Aviation) for the Indian Air Force (IAF). Further, India’s renowned public sector company HAL was replaced by a loss making private firm, Anil Dhirubhai Ambani Group (ADAG), with no prior experience in the defense sector.
The authors of the book argue
that although the CEO of Dassault Aviation, Eric TRAPPIER had publicly avowed
excellent working relations with HAL, Dassault Aviation was reluctant to take
responsibility of the HAL – India manufactured 108 Rafale. Further, the then
Defense minister Nirmala SITHARAMAN had accused HAL of non-cooperation with
Dassault Aviation, withholding huge sums of due payments to it.
The repercussions of scrapping of the original deal meant that the Indian Air Force (IAF) continues to be deficient in its required Squadron strength.
In the third session of this series of interviews, we will be joined as well by renowned French investigative journalist, Ariane LAVRILLEUX, who will present to us the "Egypt Papers" (sell of French armaments, including Rafale to Egypt).
Note:
1) These interviews were
recorded in July 2024.
2) The interview has simultaneous French and English subtitles.
#TheGreatRafaleMystery #RafalePapers #ChowkidarChorHai #MaiBhiChowkidar #SabYaadRakhAjaiega
Anubandh: Hello all! My name is Anubandh KATÉ.
I continue this as the part 2 of the interviews that I am having with
the authors of the book, Rafale Deal: Flying Lies? And I am joined by the
authors, Ravi NAIR as well as Paranjoy GUHA THAKURTA. From mediapart, we have Yann
PHILIPPIN, who has very closely followed this deal. In the last session, I
didn't mention much about my guests. Therefore,
I am just quickly going to read out their experiences, because I think it is
important. Ravi Nair was born in Kerala in November 1973. He completed a
postgraduate degree in economics from the University of Calicut in
1995.Thereafter, he worked in the corporate sector till 2014 before becoming a
consultant. He is an independent journalist and has written for various
publications and news portals.
Next, Paranjoy GUHA THAKURTA. He started his professional career in
1977. His work experience spanning over four and a half decades cuts across
different mass media. The written word, the spoken word, the audio visual
medium, printed publications and websites, radio and podcasts, television and
documentary cinema. He is a writer, speaker, anchor, interviewer, teacher,
analyst, commentator, publisher, producer, director and consultant. He has
authored and co-authored eight books, published more than 30 books, directed,
produced more than 25 long documentary films, hundreds of short films and
videos, including two music videos. He has been the editor of “Economic and
Political Weekly” and is a member of the visiting faculty at the “Indian
Institute of Management, Ahmedabad” (IIMA) for the last nine years.
Paranjoy: May I correct
you? I was a member of the visiting faculty of the Indian Institute of
Management, Ahmedabad. I was there for 15 years and I have made more than eight
music videos as of today.
Anubandh: Okay. Thanks.
And that is continuing because we also had your “Saheb” video which made a lot of noise during the elections
(2024) in India. And you are a consultant with Newsclick portal as well.
Now, Yann PHILIPPIN is an investigative journalist and a reporter for the French Mediapart. In his journalistic career, he has investigated the crash of the Rio Paris flight of Air France, the SNCF (French National Railway Operator) accident in Brittany and political financial cases such as the Dassault and Rafale deal controversies, specialized in financial cases, tax fraud and corruption. He works in particular on data leaks published by Media Part, with its partners from the European investigative collaborations network on which Yann is a board member. With this, I think the introduction, at least on my side is complete.
As was discussed last time, were right, Paranjoya and Ravi. The
chronology given in the book is very extensive and there were a lot of parts
which are important. I went through it again and there are few things that I have to supplement with what we
said last time. We discussed about the competitive bidding. In December 2004, Dassault
Aviation approached the Ministry of Defense and gave another proposal to supply
Mirage 2000 MK2 on a single source basis through an intergovernmental
agreement. Similarly, Lockheed Martin also proposed that India buys through the
US military sales program directly their aircrafts. This means that these
companies were trying, from the beginning not to go for the competitive bidding.
They wanted India to buy directly their jets. And this is what Mr. Modi later
did with Dassault.
Moving on, I was surprised that the request for information initially was sent only to the five vendors and not to EADS. It was sent in November 2004 and then in August 2005 EADS came to the Ministry of Defense and said, we would also like to participate. Therefore, it is surprising for me that it took them nine months to react. Especially since they were the company who were shortlisted afterwards. What is surprising to note is that initially, Dassault's offer was rejected by the Technical Evolution Committee. And then Dassault gave a new proposal, saying that they will modify their aircraft to suit India’s (Indian Air Force’s) needs. As their aircraft was compliant with NATO specifications and they would adapt it to India’s needs. Thus, initially, Dassault’s proposal was rejected. This is what we covered in black last time.
And these are the points in blue that I wish that we visit today.
One more thing is about the joint ventures that we discussed last time.
After reading the chronology, I found two mentions that I had missed. One is about regarding the fact that the Reliance Mukesh Ambani Group and Dassault Aviation formed a Memorandum of Understanding (MoU) in 2012. This was to sell Falcon business jets. Then Tata Advanced Systems also had a tie up with Lockheed Martin in 2017. This is all from my side. Do you have comments on this part that I just mentioned? If you have, you can comment, else we move ahead.
Ravi: Tata has a joint
venture with Lockheed Martin. It is an ongoing project because Tata has very
close tie up with Boeing and Tata, a division of Tata Group is manufacturing
many parts, spare parts, etc. even softwares for Boeing since long. Thus, there
is nothing new. Reliance Industries (Mukesh Ambani), they signed a MoU (with
Dassault Aviation) and they did not pursue it. Both the companies did not pursue
it and the validity of the MoU is just gone. It has died down on its own.
Anubandh: Okay, thanks.
Paranjoy: I want to make one clarification. A lot of people are a little confused when the word Reliance is used. Reliance Industries Limited is India's biggest privately owned corporate entity. It was originally established by the late Dhruvay Ambani, but his two sons, they had a big squabble and they parted ways eventually.That is a longer story. But the word Reliance is used by both. Thus, we have Reliance Industries Limited and Anil Dhirubhai Ambani Group (ADAG).
Ravi: It is not a
confusion, especially when it comes to the Rafale deal. Mukesh Ambani's
Reliance name, the Reliance Industries name was dragged in by the right-wing social
media to project that the offset was given to the Anil Ambani company by the
UPA government and that it was not newly done under the Modi government. (As
if) this was a plan by the UPA government when the deal was under negotiation.
It as projected this way. That was actually
wrong. That was not the truth, but the right wing social media and the
government supporting media tried to project (it this way). It was a deliberate
attempt.
Anubandh: There were
two (additional) points which I would also, like to bring to our attention that
we missed perhaps last time was that when Dassault was selected as the final
vendor, EADS came up with an offer which was at least 20 % discount, which
offered 20 % discount. And it was claimed that if there had been a hard
bargain, that could have gone to 25%. Not just that, EADS also offered that
India becomes its fifth partner in the consortium, along with UK, Germany,
Spain, and Italy. Lastly, Saab, which is the Swedish manufacturer, they also
offered that if India selects their aircraft then they would move the Gripen
aircraft manufacturing facility completely to India. Therefore, what needs to
be taken into account that the other offers were equally attractive and
important.
Ravi: That is correct.
What exactly happened in the case of Gripen was that Gripen had a lot of parts
which were manufactured in the US. It still has. Therefore, a section of the
(India) Air Force and a section from the Ministry of Defense had this opinion
that if tomorrow, if something goes wrong and America imposes a sanction
(against India) then the availability of spare parts for Gripen will not be an
easy thing. That is why it was not considered, although it is a good plane. In
the case of EADS, in any way, if you look at it, EADS’s offer was much better
because in the earlier negotiation Dassault, there was (a clause) of Transfer
of Technology (ToT). But in the case of EADS, what they proposed is that being
a part of its (consortium) and getting to know about that technology. On the
other hand, the Transfer of technology does not give you the patent right of
that technology. You can have the stuff and you can assemble it here. In a way,
EADS’s proposal was much better. However, the government did not accept it
saying that the tender was floated earlier and that whoever was finalized based
on that tender was the winner. Yet, It was actually contradictory when they
spoke about the tender. The winner was based on the tender and they had cancelled
that tender! Therefore, the winner of that tender was actually invalid. The result
of the tender had become invalid. It was very contradictory and that is how the
government played.
I just want Yann to explain this. When you said about Reliance
Industries last time, his camera was off. Therefore, I thought he was not there.
That is the reason I did not say. He
exposed how this group came into picture and how it formed an agreement with
Dassault, much before the (official) announcement.
Yann: Maybe first about the other offers. What should be also considered are the capabilities of the planes. Thus, even if the other offers could appear better or cheaper, you must keep in mind, for instance; the Rafale is much superior to the Gripen, you know, which has only one engine, which is much less powerful. You also have to take into account that the Rafale has more capabilities than the Eurofighter. For instance, the Rafale is a very good plane both for Air defense and ground attacks for bombing ground targets, which is a weakness of the Eurofighter. They have been trying to catch up on this. However, there is also the plane's capabilities that you have to take into account for selecting an airplane. That was about the different planes.
Ravi: Once again here,
the Indian Air Force after the technical evaluation, they selected both Eurofighter
and Rafale and as per the Indian Air Force assessment, both these fighters were
equally good. Thus, they left it for the financial bid to decide who is the
winner.
Yann: Yeah, but you
know, it is maybe because I am French. But after what I wrote, you know, you
cannot, I think that nobody can suspect me to run for Dassault, right?
Ravi: No, no.
Yann: But I've been
working on aerospace and this is, I would say, it is really recognized among
defense experts that in terms of the range of missions what Rafale can do. On
this specific point, the Rafale is better than Eurofighter, especially for
ground attacks. The Rafale was designed to do this from the start, on top of an
(air) defense. It is not the case for the Eurofighter. This capability has been added later to it. Therefore,
this could be a (distinguishing) choice even if from the Indian Air Force’s
perspective they got a similar evaluation on technical (capabilities).
Actually, the Rafale has been designed from the start to be a multi-role
fighter, which was not the case for the Eurofighter. Since the beginning it has
been designed as a pure fighter even if it has been enhanced later. The Eurofighter
has been enhanced at least thrice in the version which they had around in 2010-2011.
Even that has been enhanced. Thus, (now) it is a multi role air fighter just
like Rafale.
Ravi: I am not a (very)
technical (person) to say about that. I mean, my information is (based on) Indian
Air Force’s technical ability test (report).
Anubandh: Let's say
that the Indian Air Force chose the best available aircraft, which was Dassault’s.
Ravi: No, that is wrong
Anubandh. The Indian Air Force chose both these aircrafts, Eurofighter and
Rafale. In their report, I repeat, the Indian Air Force’s Technical Evaluation
Committee's report, it was very clearly stated that both these aircrafts were
equally good. That is why, that is why Dassault won on the financial bid. They
were said to be the lowest L1, the lowest one in the financial course.
Anubandh: Right. I
would like to move ahead, but I think Paranjoy wants to say Something.
Paranjoy: I have one small point. The other big defense equipment import scandal in India was about Bofors. That there are some similarities. In case of one you talked about field guns and howitzers and here we are talking about a fighter jet. The issue was never quality. The issue was never the technical capabilities, on that one case of the Bofors field gun, the howitzer and in the case of the aircraft, the Rafale aircraft. The issue was never there. As we have already mentioned, detailed account has been given how it all took place. The issue is not that. The key issue is the way the entire process. How the negotiations between Dassault and the Hindustan Aeronautics Limited under the UPA government, how it happened and then the intervention of Mr. Narendra Modi and then all the steps that followed. Thus, corruption is the reason why it is controversial. Any kind of contract where there are several bidders and some people one person or one company wins and the others lose, the others would be aggrieved. That is bound to happen. If we put it in short, the deal has become controversial because this particular deal when Mr. Narendra Modi ordered it and its culmination, they did not follow the set procedures, the rule of law and it ended up in financial impropriety. Right, Ravi?
Anubandh: We will visit
that. But I would like to bring us to where we left last time. We left at the
RFP, Request for Proposal. And in that, the two next requirements were to check
the documentation part and the field trials. Thus, could you please briefly
tell us what these two steps were and what was exactly checked?
Ravi: The technical
documentation is like when you buy a car, you will have a manual of the car.
How to maintain it, how to drive it, what is the speed limit, what is the fuel
to be used, when to change the oil, etc. Just like that, when for an aircraft, there
is a manual, a technical user manual. Thus, Dassault initially did not submit
that. As per the information what we have the government had to, the Air Force
had to do a lot of follow up for that. The technical evaluation, when we speak
about the RFP, it mentioned around 640 points, which they wanted to test. That
is why the aircraft was tested in different climatic conditions across the
world, not only in India. In India the (flight) tests were done in Bangalore
where the climate is normal, then at Jaisalmer where the desert conditions were
(checked). Then in Leh, in the HimalaYann
sub-zero temperatures. Then one more
place which I forgot and then at different foreign countries. They tested even
in France.
Therefore, the committee took more than one and half year to test these
aircrafts up to their satisfaction. Later they wrote their analysis about all
these aircrafts and they had a lot of doubts. So, they wrote back to those
manufacturers, different manufacturers and sought clarity. After that, they
technically finalized two aircrafts.
Anubandh: I was shocked
when in the book I read that the Comptroller and Auditor General of India (CAG)
claimed that there were actually no flight testings for EADS and Dassault! The
two shortlisted bidders. And then later when you also interviewed Air Marshal
Raghunath NAMBIAR, you asked him this question, regarding this claim made by
CAG, and he refuted it.
My question would be who should we believe? Should we believe CAG who
claims that there were simulations and not really the real field tests or we
should believe Air Marshal Raghunath NAMBIAR?
Ravi: We spoke to some
other air marshals or senior officials of the Indian Air Force. They confirmed
us that it is actually CAG who was confused in this. CAG's claim, we cannot say
(it to be) completely wrong. What happens is many aircrafts, test aircrafts
especially, will not come with the complete kind of paraphernalia what Air
Force asked for. as Dassault claimed, the Rafale is configured as per the NATO
specification. What happens is certain things, if they are added, how the
aircraft will behave, those things have to be checked in a simulator. Therefore,
that is what happened. It is not that the aircraft was not physically tested by
the Indian Air Force, that is a wrong statement by CAG.
Anubandh: Okay, fair
enough. Thank you. Moving on, could you please tell us about the India Specific
Enhancements (ISE) because a lot has been said and claimed about this. Could
you bring us some clarity?
Ravi: In the book, we have mentioned around 14 points. What India asked for, other than the NATO specifications and how those things (had) to be improved. Because India's specific enhancements means, of course, these are enhancement particularly demanded by the Indian Air Force, which was not there in any of the aircrafts ever made in the world.
Thus, these were very typical. Therefore, Dassault's Rafale built for
India, it is actually built for India. If it were not Dassault, if it were
Eurofighter, they would have done the same thing. The basic structure is the same,
the engines are the same, the operational parameters will be the same. However,
the additional features which were needed for the Indian Air Force were added
as India Specific Enhancement (ISE). There are around 14 of them which are
listed in the book.
Anubandh: Okay, thank
you. Now, I think, it is the most controversial part of this book, and it is
about the pricing and the benchmark. I would just read out a few bullet points,
key points, and then I invite you to comment on this. As we know, there were
six bidders. Dassault and EADS were selected as the L1 bidders.India’s initial
benchmark, which was decided by the Indian Negotiating Team (INT), was at 5.2
billion dollars for these 36 Rafale jets. Dassault had asked for 10.7 billion
dollars, which was almost double or more than double. The deal was finally
settled for 7.87 billion dollars, which is roughly around 60,000 crore Indian
rupees. Thus, what happened apparently is that this benchmark price established
by the Indian Negotiating Team was overruled with the intervention from some
group of ministers, especially National Security Advisor Ajit Doval. And those
officers from India Air Force who objected to this, were either sent on leave
or they were transferred. Further, the Defense Minister Manohar PARRIKAR
claimed in an interview to IBN7 that the total cost of the deal had risen to 90,000
crore rupees. I do not know from where this figure came. Later, some unnamed
officials of the Ministry of Defense were unhappy to pay 8.8, close to 8
billion dollars for the 36 aircrafts when for 126 aircrafts in the initial offer,
the price was 20 billion dollars, including the same configuration and weapons,
factoring in inflation. So, this is a kind of an aperçu from my side to invite
you to comment on this issue.
Yann: Yes, it is something
that we revealed in Mediapart thanks to these confidential documents. You made
a very nice summary, Anubandh. Because what you have to understand is that back
in 2016, when the negotiation, in 2015-16, when the negotiation began again, that
is a totally different (situation), since the tender had been won in 2012. Thus,
we are four years later. The planes are not made in India anymore, there is
inflation, blah blah blah. Basically you have to start again the calculations
because that is a different deal. That is where the Indian negotiating team
ends up with this estimate of five billion dollar. Then Dassault proposed
double, 10 billion dollars and they settled somewhere in the middle but in the
very high ground (price) at eight billion dollars.
And one of the key points that we revealed in Mediapart is that thanks
to this intermediary, Sushen GUPTA, to which Dassault gave millions euros for
his services, Mr. GUPTA obtained the confidential documents from the Indian
negotiating teams with all the methodology to calculate the price. Of course,
this gave a stronger hand to Dassault because they knew how the Indian party
was thinking, the Indian negotiator was thinking. Thus, it helped them to
counter the arguments of the Indian negotiating team and try to obtain a better
price. Therefore, that is one key point that we revealed. But then to explain
why the Indian government finally accepted this eight billions, I will leave
the floor to Ravi and Paranjoy who I think know this better than I do.
Ravi: What happened
was, if we look from outside, what happened was, Modi announced something and
he realized later, three or two years later, they realized, it was a trap. Modi fell to his own trap. He just, just like
what he did as the Chief Minister of Gujarat, this time, in a world forum, he
just announced that this will be done, without any consultation! No discussion
with his colleagues in the cabinet, no discussion with the Indian Air Force, no
discussion with the Ministry of Finance. He just went and announced. Even at that
time itself, some of the French media reports of that time reported that the
price will be around 7 billion, 8 billion dollars, something like that. Therefore,
they Dassault knew, they can extract
this much. It was the day Modi announced it or immediately after Modi announced
it. And Sushen Mohan GUPTA's service, it gave, as Yann just said, and (very)
correctly, Sushen Mohan GUPTA service to Dassault, gave them an upper hand.
Because they knew whatever was happening in India, even the minute details.
They even had access to the spreadsheet of the Indian negotiating team that
they were drawing upon, with the help of experts and the finance ministry and defense
ministry officials. They had the access to that. Then in between this
negotiation for 36 Rafale, some insiders said that, they thought or they started
to fear that this (deal) also, will collapse because Dassault was very adamant
on the pricing. But from India's point of view, the earlier deal was including Transfer
of Technology, and this one was just off the shelf. Therefore, in a way, the Dassault’s
input costs were much lower, but they extracted the money and India lost.
Anubandh: I wish to
bring in two points here. One is that there is also an argument that the EADS
submitted the commercial bid as per the RFP and not Dassault. It was also argued
that the EADS consortium was more clear in its commercial bid when compared to
Dassault. The CAG report said that Dassault disclosed its prices in two parts;
the price of the direct flyaway aircraft and the price of the transfer of
technology. While the EADS on the other hand had submitted its commercial bid
in conformity with the prescribed RFP format. However, there is another aspect,
which is that it was that there was a certain (price) formula which was given
by Dassault. Apparently it was not so easy to understand. There were variables
which were not disclosed. It is argued that the Indian negotiating team accepted
that formula without much scrutiny, without checking the correctness, the
reliability and the fairness of it and declared Dasssault as the lowest bidder.
Perhaps later (they) found that that wasn't the case. How would you respond to
this?
Ravi: Actually, what
happened was in this particular case of difference of purchase, probably this
was the first time Indian Air Force floated a tender. They considered these
aircrafts, their lifespan at around 40 years. Thus, they asked in the RFP this
part to be included. What will be the approximate cost of maintenance per
aircraft, in 40 years should be included in the bid. When it comes to the variables,
then Dassault’s initial bid was so confusing and it did not clearly mention the
variables. Because I mean, see, if we consider from 40 years, if you consider
40 years from now, how the (spare) parts prices will go up, how the inflation
will come into effect, how the relationship between the countries will vary,
how the currency fluctuation will happen? Because there are (the currencies) Indian
rupee and the euro, there is a variation again, that is because one euro is
almost 90 rupees as of today. Thus, now everything should be taken into account
and an exact prediction was impossible. Therefore, they have taken, everyone
takes an approximation. That is why that particular formula was made and the
format was fixed. In the case of Dassault, they did not follow that. It was
very clear. And the Indian officials actually misread the data provided by
Dassault and declared Dassault as L1. Therefore, if you speak today to Indian
officials, they will admit that Dassault was not L1.
Anubandh: Yann, do you
agree with this assessment from the Ravi?
Yann: In fact, I can't really answer because as you know I am French. Thus, I am not an expert about what happened on the Indian side. Therefore, I prefer not to give my opinion about things that I do not know.
Anubandh: No problem. I
have one more interview to cite is that of Eric TRAPPIER who was and I suppose he
is still the CEO of Dassault.
Paranjoy: Former,
former. He is retired.
Anubandh: OK, He is
retired. Thank you, Paranjoy. Thus, he came with an argument which was very
important because the BJP government had been saying that the price has shot up
because there are some specifications which were not present in the initial
MMRCA deal for 126 aircrafts. Eric TRAPPIER in an interview to CNBC said, “No
there are no changes in the aircraft specifications, they are the same”. Thus, that
is one point. Another argument he gave was that because now India was buying
more flyaway aircrafts under the new deal but fewer aircraft (in all). The
question was whether there was really any reduction in the price per aircraft. Therefore,
his argument was that for any capital intensive equipment such as the fighter
aircraft, product development charges are added to the cost of manufacturing to
enable the manufacturer to fully recover its investment. So, higher the number
of aircrafts the lower would be the additional charges as development cost per
aircraft. Hence, TRAPPIER admitted that had India opted for 126 aircrafts under
the original MMRC deal, the price per aircraft would have been substantially
low. Do you have any comment on this?
Ravi: TRAPPIER was
correct there. In capital intensive projects, when someone says that more the
number of aircrafts, it is not always looked at like that. See, Rafale was
developed and became operationalized long ago. Till Egypt placed its first
order, this fighter jet was never exported out of France. It was only the
French Air Force who had placed the order with them. Dassault was almost on the
verge of bankruptcy. That is when the first order came in. Therefore, the
assessment of TRAPPIER in that sense is not accurate. Because when I am inventing something and I
am putting in cost capital into it, I will have a calculation. How much of my
product is saleable, how soon I can make the breakeven. And if I am not able to
make the breakeven, how I am going to continue with the production? That is
basic business management. Hence, if TRAPPIER says that if it was because of just
36 (aircrafts) the price shot up, that means he tried to pull out the money from
the Indian Air Force for a product which he was not able to sell to any other
country other than Egypt!
One more thing. Since you mentioned it. When TRAPPIER said that there was no change from the RFP, he was absolutely correct. Therefore, if you read the book, there is one paragraph that we repeated five or six times. That was in the entire book. That was the joint statement of French President and the Indian Prime Minister in which it was clearly stated, “as selected, as prescribed by the Indian Air Force, the Rafale aircrafts will be delivered by the DASSAULT, as prescribed by the Indian Air Force.”
Anubandh: Right. Thus,
I would like to bring in now Yann also,
in this discussion because he has to confirm what I am going to say now. Rafael
was also sold to Brazil, Egypt, and of course, to India. There were talks with
Qatar and Malaysia. There was an attempt to compare the prices of Rafael to
these countries with the price that was offered to India. It was argued that
India didn't get a good deal. Is there an element of truth in this? That is one
question.
One other point that needs to be taken into account…
Yann: Sorry, but I do
not know about this. Rafale was not sold to Brazil and Indonesia. It was sold
to Qatar, to Egypt and India.
Anubandh: Okay, okay. In
any case, as you said that there were always some adaptations and customizations
to the aircraft. Perhaps it will not be fair to compare these prices. Yeah. However,
I think Ajai SHUKLA, journalist and retired IAF officer that you mentioned, he
had a very….
Paranjoy: Army officer,
not Air Force officer. He was not in Air Force, he was an Army officer. well
known defense analyst.
Anubandh: Thank you.
Ajai SHUKLA. Okay. Thus, he said, “an inexperienced Ministry of Defense working
off incomplete and sketchy details provided by Dassault had incorrectly
adjudged the Rafale cheaper. Now after three years of obtaining clear figures
from the French, we find India would be paying significantly more than had been
initially calculated.” Another person you quoted, I mean, you mentioned in the
book is Sudhanshu MOHANTY. He is the former Comptroller General of Defense
Accounts. He says as well that “the benchmark price set by the Indian
negotiating team for the Rafale deal had been overruled by the Ministry of Defense.”
He also said, “a decision on the benchmark price was left to the Cabinet
Committee on Security, which comprised politicians instead of Defense
Acquisition Council.” Thus, there was clearly a compromise made for political
preferences than technical and other security priorities. Do you agree with
these assessments?
Ravi: That is correct.
See Mr. MOHANTY was, he was the head of defense accounts. Therefore, he not
only spoke to me, he has also written to me.
Paranjoy: He has in his
own name after he retired, he has written. He wrote an article for the portal
called The Wire and he responded to an email and he allowed us to quote his
email. Am I correct, Praveen?
Ravi: He sent an email,
he sent a written email. That is correct. He said that, feel free to. But
after, while writing the book, around 2019-20, when we tried to take more
quotes from him, he was so scared because the government came up with a new
rule saying if retired officers speak about their ministry or department,
without taking (prior) permission from the government, then the government will
stop their pension and that the officers will be prosecuted. Hence, he could
not say further, but he has given valid inputs much before that to us. That is
what I mentioned earlier that Dassault's quote was patchy and the team which
calculated the bid and which assessed the bids of Dassault and EADS, misread
Dassault's submission. And that is how they declared Dassault as L1. Actually
Dassault was not L1.
Anubandh: Right, but
there was one more interesting comment and argument by Air Marshal NAMBIAR when
he says, “do not compare oranges with apples. There are single engine Rafale
jets and there are double engines.” And his argument was that it is not just
double the price of 18 fly away aircrafts (which were part of the original
MMRCA deal of 126 aircrafts) to 36, that you can compare. Do you agree with
him?
Paranjoy: We do not
agree with him.
Ravi: Rafale is double engine, Rafale is not a single engine, it is a double engine.
Paranjoy: Let me give
you a different kind of analogy. You know, it is not comparing apples with
oranges. This is what his view is. And we have quoted his view and we have
given in great detail how we spent a long time with him, how we recorded the
conversation. After we recorded the conversation, we have told this to you
before, he retracted more than one third of what he said. He said, you cannot
publish it. But because we gave him our word, we did not publish the parts
which he did not want to be published and did not attribute it to him. It is a
separate matter.
Ravi: Not one third, he
retracted almost 40-45 percent of what he said.
Paranjoy: More than one
third, I said. I said more than one third, Ravi. That is it. More than one
third is 40-45 percent, almost half. Be that as it may, that information,
never, whatever he said, we did not attribute to him. Point number one. We were
ethical and fair in our interview with Air Marshal Raghunath NAMBIAR. Point
number two, he says that we should not compare apples with oranges. We do not
think that analogy is correct. We think we are comparing one brand of Apple
with another brand of Apple. Correct Ravi?
Ravi: correct. See, not
even once in the entire book of around 540 pages, not even once. I have written
almost 40 odd articles on Rafale, not even once we questioned the technical
capabilities of the machine, Rafale as a fighter aircraft. There is no doubt.
We are not questioning. The issue what we raised is purely financial and the
commercial side of it.
Paranjoy: And the
procedures… and the procedures, the regulations and the set proceeds, the
violation of the set procedures.
Ravi: The regulations
and the set procedures… the violation of the set procedures.
Paranjoy: We said this
to you before, we have written this before and we are reiterating this point. It
is 4.30 pm. It is one hour, almost one hour. I want to ask a question to Yann.
The change of the government in Paris. What kind of government do you
think, it will have any impact on the investigations that are going on? That is
my question.
Yann: That is difficult
to say because as I said during the last session, one of the key problems that
the investigating judges have is that the government opposes them. The fact
that the information about the deal are classified, are defense classified.
There has already been an answer from the previous government. Thus, as there
is already been an answer, you know, I am not a lawyer and I am not sure that
the judges can basically ask again to the new government to reconsider their
decision. I am not sure if it is really possible.
Paranjoy: Let me
rephrase.
Ravi: But in French
Senate, there had been long discussions and the lead investigator of that time,
I forgot her name. She has been questioned at length and her answers were very
interesting. These were mentioned in the book, that she did not say that this
is classified. This informations was classified, but they didn't get the access
because of political reasons.
Paranjoy: She has said that on the record in the Senate. It is a published public document.
Yann: Yes, but you know
in France, basically when the judges or the prosecutors ask for or they seize
classified documents. In fact, these documents are classified because it is
written on the documents. Thus, when the judges want to ask for or use such
documents, they have to ask an independent commission, which is not perfect,
but there is a special commission that gives its opinion and then that is up to
the ministers to follow or not the opinion of this commission. In these two
cases, this commission said that these classified documents should not be given
to the judges. Thus, of course, it is something that we can regret, but it
means that this independent commission gives an argument to the politicians
because the politician could say, you know, we are just following what the
independent commission said. And again, I am not sure that it is possible for
the judges to ask this commission to give a second opinion.
Paranjoy: Okay, see
the question I have and I am looking at it from a long distance. You know better
than I. Until yesterday, certainly, until the day before, after the first round
of voting had taken place last week, a lot of people were saying, okay, the
right wing, the national rally by Marine Le Pen. Sorry, my pronunciation is very
bad. They were supposed to be right on top, but they came to number three
position. And there was a last minute alliance of the left-wing parties and
they became first and President Emmanuel MACRON, and we know President MACRON
features quite prominently in this whole deal, in this whole Rafale deal, in
second position. Now we do not know what will be the character of the
government, whether it will be a coalition government, whether there will be
paralysis or not, we do not know. Thus, please explain what may happen. None of
us know. Some people are saying there will be…
Yann: It is very
simple. You know, as of today the case is between the hands of the
investigating judges who are statuary independent from political power. It has
been the case since this probe has been opened. Therefore, theoretically the
politicians, the government, put pressure on these judges. The only way that
the government has is to refuse the declassification of documents. That is the
only power that they have. Of course, it may happen that there is some kind of
political pressure on judges, but there is absolutely nothing showing this as
of today. Thus, because there is nothing showing this as of today, we must
assume that there is not. And there is no reason why a new government, whatever
it is, would apply pressure on these judges. Basically these judges are
independent. Hence, it is very difficult for the government to influence the
way judges conduct their investigations. As I said, the key point today is not
the influence in France, I mean, is not the influence of the government on the
judges. It is whether the judges can work, basically can access these
confidential documents. As of today, the answer has been no. There has been
refusal of these documents, both by the French government and by the Indian
government. The question here is that, is there a way for them to obtain these
documents? Can they basically crack the case and collect enough proof? Without
access to these classified documents. That is the key point.
Ravi: But I have
another question here. Do you think we
have enough reason to believe these documents were classified once the Indian defense
minister said these are classified information & thus cannot be shared? And
in France, after SHERPA filed the complaint?
Yann: We can't know
because the answer is different for France and for India. For France, we do not
know because these documents are classified. Thus, nobody has seen them. Therefore,
nobody can know whether they have been classified before or after the probe was
launched. Hence, we cannot know. What is most interesting is for India. Because
for India, the documents are not classified. These are documents from a probe,
from a case file. So, these documents are not classified because they are
inside the Indian case file. Therefore, in theory, in India, there was no reason
to refuse the transmission of these documents. That is basically the proof that
the MODI government basically did not want to give these documents to the
French judges because they do not even have the excuse of classification, you
know, because these documents are not classified.
Anubandh: There was an
excuse, Yann, and I will cite it. Maybe Ravi can correct me. But the Indian
government said that much of the information being sought is covered by the
official secrets Act of 1923. It concerns the national security. That was the reason
given by the Indian government not to disclose this.
Yann: You know, I am
not an expert in the Indian justice system, but basically these documents are
inside a case file of the Enforcement Directorate (ED) in the CBI.
Ravi: But let me put it
very simple. Okay, Yann has seen these papers, I have seen these papers.Even if
it is covered under official secret act. I even have seen internal communications
between the ministries and Air force. We have put it as the annexures in the
book. We copied word to word as it is and we published it.It is not that we
created something. These are actually government communication as is published.
Paranjoy: You know,
there will always be somebody who will claim that we have endangered national security.
We have violated the official secrets Act, which is over 100 years old. But the
short point is like this, and this is what we can say. The book that Ravi is
the principal author and I am the publisher and co-author was published in late
2022. There was a formal function at the Constitution Club of India in Delhi
where there were experts, and hundreds of people. The book was available and is
still available for sale. A lot of copies of the books have been sold. So far,
nobody has said that what you have written is violating the Official Secrets
Act or it is classified and should not have been published. That is all I can
say.
Anubandh: Right, but my
question is, if it were India or the Prime Minister Narendra Modi who scrapped
the original deal, would it be fair to legally hold Dassault responsible for
not respecting the deal?
Paranjoy: No, I think that
is looking at it very, very differently. Dassault was praising Hindustan
Aerospace Limited, the public company and was saying that the negotiations were
90 % complete or 95 %
Ravi: Dada (Paranjoy), you haven’t
understood his question.
Paranjoy: The deal fell
through at the last minute. Okay. Why did it fall through is what the subject
of the book is all about. Why it was unilaterally decided by Mr. Modi to take
the flyaway aircraft is been given in great detail to the book. This is the
story. This is the story of our book. This is the scandal. Those who are
responsible, either they answer or they do not answer. As writers, as
journalists, as authors and publishers, we put out information that we have
been able to get. Some of it is in the public domain and some of it is what we
have obtained from our own sources. Ravi, please continue.
Yann: Maybe just to
finish about this. Basically, both in France and in India, we can see that the
laws about classification and defense secrecy and all this stuff are being
misused. They are used to cover suspicions of corruption. Whatever the details
of each bill, you know, the French bill, the Indian bill, the philosophy of these bills is to protect national
security. Thus, of course the details about the sensitive technologies, about
technical capabilities, specific operations should not be disclosed. Everybody
can understand that. But when a defense deal has such strong suspicions of
corruption, these aspects shouldn't be covered by this national security
interest because it is not about national security, it is about corruption. Therefore,
it is how these two governments are using these laws to prevent the independent
judges from digging into the bottom about the corruption suspicions.
Ravi: In India, it is
slightly different. We never asked or we never sought for any technical
information of the aircrafts or what IAF finalized. We did not want to know the
specification of the aircraft, which are already there in the public domain.
You go to DDassault’s website, you will get even the minute details of the
aircraft and its functions and how capable it is. We asked the details of the
commercials, the financial transactions. At the end of the day, the money is spent
from the exchequer, it is public money. No politician brought this money from
his home or his pocket, they did not spend from their pockets. This is public
money gone from India to a private company. We asked for the commercial details
and the transaction details, which they said is covered under the Official
Secret Act 1923 and that this relates to the national security. Therefore, the
basic question we raised in India is how a commercial transaction from the
exchequer, disclosure of the commercial transaction from the exchequer affects
the national security. We never got any answer.
Yann: Because the
answer is very simple, is that it does not affect the national security!
Anubandh: Because we
talked about HAL and Dassault's relationship and the agreement they signed.
There is one argument that was made by Dassault. They did not want to take the
responsibility of the 108 aircrafts that HAL was going to make. And the Indian
government, I mean, SITHARAMAN, she was the finance minister, blamed, in a way
HAL for not cooperating (with Dassault). But the CEO of Dassault said, no, he
has excellent experience with HAL.
Paranjoy: This is the
crux of the issue.
Anubandh: Please let me
finish.
Paranjoy: Let me
anticipate what you want to know without you completing your question. As I
mentioned a little while ago, this is the key. This is the crux. All along,
Dassault Aviation, Eric TRAPPIER was saying we have no problems with HAL. The
negotiations are going very, very smoothly. Everything is fine. This was the
key issue. Who guarantees, who is the guarantor of the quality. This was what
led, I mean this was what was being negotiated. He changed the whole story.
Ravi: In the RFP, it
was very clearly mentioned that HAL, Hindustan Aeronautics Limited will be the
lead integrator and the manufacturer is liable to give the warranty. That is
one. If Dassault was not comfortable with this, why did it signed a work share
agreement with HAL in 2013? Dassault signed the work share agreement agreeing
to all these terms in 2013 and in 2015 they backed out!
Paranjoy: Thus, this
is what our book is about Anubandh! We are pointing out what were the facts.
Whether we like it or not, politics enters everywhere. Thus, politicians will
all interpret the technical details and the factual details to suit their
purpose.
Yann: About this, I
really understand Dassault's position. The Indian government asked, in the
first version, when this was the tender, it was the Indian government who asked
that most of the planes are made in India. Dassault was not asking for this, it
was India. Thus, of course, if this had been done, there would have been more
than 100 airplanes manufactured by HAL. Of course, HAL has to be responsible.
You know, if you are any company, of course, even if Dassault would have helped
HAL giving the technologies, the tools, the machines, basically, it is normal
that you do not want to be responsible for something that you are not
manufacturing yourself. Because if this has been this, HAL could have done, I
would say, bad work, and then it would be an incentive for bad work. Because,
if something bad happens in HAL factories then HAL is saying it is not me, it
is Dassault which is responsible! Thus, it was totally normal from Dassault's
point of view to say okay you want to manufacture these planes on your but you
have to be responsible for that. I think it is quite a fair deal, you know.
Ravi: Yeah, agree. Yeah, I agree.
Paranjoy: The man who
knows everything and whose mouth has been shut is Mr. Suvarna RAJU. He was the
chairman and managing director of Hindustan Aeronautics Limited. He made a
statement. There was a huge blowback and today we contacted him. Ravi contacted
him. I called him. Later he said that I cannot disclose. means that we cannot
talk. We cannot talk. Yes, please, Ravi.
Ravi: Yann, I agree
with your point that as a business, the manufacturer should give the warranty
or guarantee. But here, Dassault participated in a tender, where the tender
document itself clearly stated that from where the technology is coming they
should give the warranty. And because it is even if HAL is manufacturing, the
new facility would have been a joint venture between HAL and Dassault. And it
is not that HAL itself is going to manufacture. HAL will put up a facility
according to the specifications given by Dassault. Parts and technology is of
Dassault. Dassault selected vendors.
Paranjoy: And it was the land also, allocated, right?
Anubandh: Right. The book
argues, Ravi is very right. In the RFP it was clearly written that the vendor
will have no choice but to accept HAL as the lead production agency. This was
non-negotiable.
Paranjoy: Lead
Integrator.
Ravi: Integrator, that
is same as production agency. While it
could choose other industry partners but not the lead production agency. If the
Dassault had a problem with this clause, they should not have participated in
the tender itself. That is my view.
Anubandh: Yeah. Okay. I
think it is a very fascinating conversation here and I am glad we have this.
Before I wrap up, I just want to add about what happened to HAL because I was
really shocked when I read this in the book. HAL was really made to bleed. They
had delivered to Indian Air Force certain aircrafts and they were expecting to
be paid and instead the Indian Air Force decided to pay Dassault! For aircrafts
which were not even delivered. Even the Indian government asked a lot of money
in terms of taxes and for other details from HAL. HAL had to go to the banks
and take credit (loan) to pay its own employees. Thus, this was clearly a
stepmother kind of treatment given to a very reputed and incredible Indian
public sector company.
Ravi: Anubandh, when we
highlighted this here, there was a lot of political turmoil on this issue and
the situation is much better now. HAL is back in profit.
Paranjoy: Please understand that there is a question of ideology that private sector can do something better than the public sector. Thus, that is an ideology. Now this government, Mr. Narendra MODI's government is a right-wing Hindu nationalist government. They believe that the private sector is superior to the public sector. It is a blank ideological belief. We can discuss this all night, but let's look at the facts. The fact is Hindustan Aeronautics Limited is a major public sector organization which employs large numbers of people. And if you actually want to shut it down, it is going to have a lot of implication. People are going to be thrown out of their jobs. Or if you are going to keep the facilities of the HAL idle, that also, will have an impact. Thus, the government realized what was going on and provided HAL the financial support and other kinds of support by way of orders. Am I correct Ravi?
Ravi: Not financial
support, government pending bills.
Paranjoy: yes, the old
dues that were pending.
Ravi: Yeah, Air Force
was holding, Air Force and Ministry of Finance and Ministry of Defense were
holding on to, holding on billions and billions of dollars of HAL and they
cleared most of them. Thus, HAL is back.
Anubandh: Right. I wish
to conclude this interview on a lighter note because although this is a very
complex and serious topic, I really admire both Paranjoy and Ravi also for
keeping the humor alive in this book. I am just going to read a few titles (of
chapters) that they chose. Of course, the title of the book, “Flying Lies”,
which is great.
Paranjoy: That’s Ravi's
title. His idea.
Anubandh: “Clearing for
takeoff”, “Terms of engagement and endearment”, “HAL and hot air”, “Between
flights and fighters”, “Plane politics”, “How long is the long arm of the law?”
And one line which really amused me was:
“Once again, the defense minister was being economical with the truth.” Thus,
that was a very polite way of saying that she was lying.
Paranjoy: After all
these videos, people who are known to you, who haven't purchased the book, as a
publisher (I wish they) will purchase the book.
Anubandh: I wish as
well.
Paranjoy: It is
available in Hindi. It is available in Marathi.
Anubandh: I will choose N. Ram's last word on this. He said, “After MODI’s 2019 triumph, The Rafale deal seemed to have become a non-issue, politically speaking. But scandals, especially arms deals scandals have a habit of resurfacing unexpectedly. The political and the moral questions underlying the scandal will not go away. With this wish, I thank you for spending your time and I really wish that this book will be read by more and more people across the world.
Ravi NAIR was born in Kerala in
November 1973. He completed a post-graduate degree in economics from the
University of Calicut in 1995. Thereafter, he worked in the corporate sector
till 2014 before becoming a consultant. He is an independent journalist and has
written for various publications and news portals.
Paranjoy Guha THAKURTA started his professional career in 1977. His work experience, spanning over four and a half decades, cuts across different mass media: the written word, the spoken word and the audio-visual medium - printed publications and websites, radio and podcasts, television and documentary cinema. He is a writer, speaker, anchor, interviewer, teacher, analyst/commentator, publisher, producer, director and consultant. He has authored/co-authored eight books, published more than 30 books, directed/produced more than 25 long documentary films and hundreds of short films/videos, including two music videos. He has been the editor of Economic and Political Weekly (April 2016 ~ July 2017) and is a member of the visiting faculty at the Indian Institute of Management Ahmedabad (IIMA) for the last 19 years. He is a consultant with the NewsClick portal.
Yann PHILIPPIN is an investigative journalist and reporter for the French Mediapart. In his journalistic career, he has investigated the crash of the Rio Paris flight of Air France, the SNCF accident in Brétigny and politico-financial cases such as the Dassault and Rafale deal controversies. Specialized in financial cases, tax fraud and corruption, he works in particular on data “leaks” published by Mediapart with its partners from the European Investigative Collaborations (EIC) network, on which Yann is also, a board member.
Anubandh KATÉ is a Paris based engineer and co-founder of
the association, “Les Forums France Inde”.
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