October 20, 2020
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Rafale Deal: Security Is A Sensitive Issue, We Must Keep Politics Aside

The Supreme Court on Friday dismissed all the petitions seeking a direction to the CBI to register an FIR for alleged irregularities in the procurement of 36 Rafale fighter jets from France.

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Rafale Deal: Security Is A Sensitive Issue, We Must Keep Politics Aside
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Rafale Deal: Security Is A Sensitive Issue, We Must Keep Politics Aside

The bench of Chief Justice Ranjan Gogoi and Justices SK Kaul and KM Joseph have finally put to rest the legal side of the controversy related to the Rafale fighter jet deal. Pronouncing its judgment on a batch of PILs filed by three advocates and two former Union Ministers, Arun Shourie and Yashwant Sinha, the Supreme Court of India dismissed all petitions stating that there was no reason to interfere in the Rafale deal on the basis of allegations that were based on 'perceptions'. Whether it was related to the deal price, the selection of the offsets partner by the foreign vendors, or for the need for a SC monitored probe, the SC gave an 'all clear' verdict. The three-judge bench, in a unanimous 29-page detailed judgment, said that they were satisfied with the procurement process and that it did not find any reason to interfere. They have said that former French President Hollande's remarks were no basis for judicial review. The apex court had consciously confined its scrutiny to reasonableness of the decision-making process, absence of mala fides or favoritism, popularly referred to as 'Wednesbury Principle'. Opposition parties have put their legal experts to dissect the judgment with a fine-tooth comb.  Some are questioning the mention of CAG audit report that is said to have been submitted to the PAC. Any proposed review petition would have to go to the same bench, as such many feel will not be advisable.

The political slugfest has been going on for months. It is clear from the past that because of inbuilt secrecy around defence deals, these are often used by opponents to settle political scores. Also because of the huge price and secrecy, there is a risk and inherent possibility of middlemen engineering political bribes to secure deals for favoured foreign vendors. In the end, the political mudslinging often results in undue delays in urgently needed sensitive defence equipment and thus endangers national security. SC seems to have been conscious of this while delivering this important judgment. For the first time, men in uniform, senior Indian Air Force (IAF) officers including the Vice Chief were summoned by the SC to understand the security implications if the deal was derailed. The IAF and the security establishment is greatly relieved by the clear verdict. The aircraft deal can now proceed unhindered. Governments political opponents are still seeking a Joint Parliamentary Committee (JPC) but the SC judgment has significantly taken off the steam.

Politics apart, there is still a need to clarify a few technical issues for better public understanding. The petitioners had alleged that the current NDA government deal price was much higher than the one being negotiated by the earlier UPA government. On the other hand, the government had maintained that the deal was, in fact, 9 percent cheaper. The price was sought by the SC bench in a sealed cover. They had thus become privy to the otherwise secret breakdown of costs. They were obviously satisfied that the price was reasonable and comparable or perhaps better as the government had earlier announced in the parliament and confirmed by various agencies including the IAF and aircraft manufacturer Dassault and the French government.

The public is also being misled about the offsets amount and the selection of the Indian partner. The Defence Procurement Procedure DPP-2013 which was in vogue then, clearly states that the prerogative to select the offset partner is that of the foreign company that they have to satisfy the contract offsets clause. The SC was satisfied that the decision was entirely by Dassault and the other foreign companies, and the same had not been influenced by Indian government. In a total contract of Rs 59,000 crore, the offsets liability is Rs 29,500 crore. The many French firms who are the suppliers in the Rafale contract have distributed among them the said offset liability. Only around Rs 6,500 crores must be met by Dassault. For this purpose, Dassault and Reliance Defence Ltd have reportedly set up a near equal joint venture (JV) in which the Indian side will have to invest in manufacturing infrastructure and manning, while Dassault will bring technical know how. This venture will be making various defence related items but not necessarily related to the Rafale. These 36 Rafale will be entirely built in France.

In this mudslinging, an impression has got created as if the government and IAF do not trust the Hindustan Aeronautics Ltd (HAL). This is far from true. HAL has built for IAF more than 200 SU-30 MKI, nearly 100 ALH and IAF has committed an order for over 200 LCAs. IAF may have issues related to quality and product delivery timelines, but the two work closely and are highly interdependent. The original deal of 126 aircraft had got derailed due to technical issues that both UPA and NDA governments did try to resolve but failed. The two crucial issues were related to excessive aircraft manufacturing man-hours quoted by HAL (2.7 times) which would escalate the total cost, and the manufacturer Dassault was not ready to be held responsible for HAL's quality control. India still wants to pursue 'Make-in-India' approach. 36 urgently needed aircraft were bought 'Off-the-shelf' and simultaneously a fresh process for acquiring 114 additional fighter aircraft has been initiated. These will be Made-in-India.

The last issue that needs clarity is the issue of so called 'Sovereign Guarantee'. India has signed many government-to-government (G2G) aircraft deals in the past with Soviet Union, Russia, USA and France, among others. Any G2G deal brings an assurance from that government that due processes for airworthiness certification of all the parts and aircraft have been checked and confirmed by their government agencies. Also, the foreign government is responsible for any failure on the part of their manufacturers and agencies. It is also an assurance related to the price being competitive and similar as offered to their own armed forces. India and France are strategic partners. By definition, 'Sovereign Guarantee' is a promise by the Government to discharge the liability of a third person in case of his default. A letter of comfort is a written document that provides a level of assurance that an obligation will ultimately be met. The letter of comfort is also the preliminary statement of assurance that the items will not be materially different from the final version. In this case, the 'Letter of Comfort' reportedly carries all the assurances of the French government related to the above issues.

India is among the most threatened regions of the world. We have two nuclear neighbours with both of whom, we have serious boundary issues and have fought wars. IAF is down to an all-time low of 31 fighter squadrons vis-a-vis the government authorized 42. Fighter aircraft are urgently needed to make good the depleting numbers. Security is a sensitive issue. All political parties must adopt a bipartisan approach. There are enough subjects to settle political scores. In case of bribes and illegal practices, there are constitutionally mandated agencies like the CAG, the CVC and even courts if clear specific proof exists.

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