PM Modi has renegotiated the Rafale deal to great advantage of Ambanis and even greater disadvantage to India. He is now buying far fewer planes at multifold cost without any technology transfer – just to enrich The Ambanis.
Can India Stop Rafale Scam?
Normally, we come to know about a scam long after it has happened. But thanks to our credit-seeking PM and his Media which glorifies his failures as achievements, we Indians are witnessing a scam in progress right now in front of our own eyes (if they’re open). Yes, we’re talking about Rafale Deal.
This scam not only involves our hard earned money but it also has serious implications for India’s security & morale of our Armed Forces. This also tells us for whom is the Hon’ble PM is actually working – For crores of Indians who voted for him, or for his cronies who fund his election campaigns.
We’ll have to understand the scam first. The Deal involves purchase of 36 Rafale fighter planes from France through Government to Government deal done by our Hon’ble PM.
History of the Rafale Deal
IAF (Indian Air Force) is in dire need of around 200 MMRCA (Medium Multi-Role Combat Aircraft) since 2001. UPA approved the demand in 2007 and initiated the bidding. Many companies responded & finally Dassault won the bidding in 2012 to provide 126 Rafales at US$ 10.2 Billion, 18 jets to be provided ready-to-fly and rest 108 to be Made in India by HAL (Hindustan Aeronautics Limited) via technology transfer. 12 The deal also had other goodies, like Dassault was supposed to invest 50% revenue from this deal into India itself.3
|Detail||Original Deal||Modi’s Deal|
|Number of Planes||126||36|
|Total Contract Bn USD||10.2||8.74|
|Cost per plane Mn USD||81||243|
Dassault bid was the lower than the shortlisted Eurofighter and loaded with many benefits for India. Dassault was on the verge of bankruptcy and without this deal, France’s future as a defence supplier was in jeopardy. The deal Dassault offered after it’s unsuccessful attempts to export Rafales to Brazil & UAE, even made China nervous.4 They offered their best deal and India awarded them the contract, and followed up with negotiations to iron-out the details. The negotiations ended when PM Modi changed the entire deal (turned it on it’s head, actually, totally scrapping the Original Deal5) and announced purchase of 36 Ready-to-fly planes at almost 3-times the original cost from France.
Bye Bye Make in India. Bye Bye Technology Transfer. Bye Bye all the benefits to India, based on which Dassault won the bid in the first place.6
Look at the brazen loot of Money in above Table.
Partnership and technology transfer to HAL in original contract was with a strategic objective of developing indigenous capability in the long run. India can’t keep on purchasing super-costly aircrafts from other nations forever. Technology transfer and manufacturing of 108 jets in India by HAL was most important aspect of original deal, which PM Modi has done away with.
A PM who wants to make India a super power doesn’t do such scams and Insult India world over. The deal, as it stands today, is a full blown scam to loot India and benefits Mr Modi’s cronies.
What caused the change in deal?
So why did Hon’ble PM Modi spoil a sweet deal benefiting India (from a desperate company in serious need of business) into an outrageous losing proposition to empty India’s coffers to enrich France’s? What really happened?
Mukesh Ambani Happened. Anil Ambani Happened.
Within less than 2 weeks after Dassault bagged India’s 126 MMRCS deal, Mukesh Ambani became Dassault’s partner. 7 So did Anil Ambani, afterwards.8 Surprised? Now Dassault, which was ready to provide 126 Rafales at US$ 10.2 Billion, 18 ready to fly and 108 to be made in India by HAL allegedly asked additional money for weapons systems and technology transfer stretching the deal from 10.2 Billion to 14-18 Billion US$. Not only this, they reportedly refused to provide any guarantee for planes made by HAL. 9 In short, they broke every single clause, rider in the original contract. Although, we must point out that this was denied by Dassault at the time, who told PTI in Feb 2015 that they were still sticking to the original RFP price.10
There are numerous stories in the media about these escalated prices. The figures quoted by Defence Minister Parrikar are very strange. Speaking to Doordarshan on April 13, 2015, Parrikar had revealed Rafale’s bid for 126 fighters, stating: “When you talk of 126 (Rafale) aircraft, it becomes a purchase of about Rs 90,000 crores’ — Rs 715 crore per fighter after adding all costs.”11 Parrikar had escalated the deal from $10.2 Bn to $14 Bn (90,000 Cr Rs) without any apparent reason, when Dassault themselves had said they were sticking to the RFP price.
And, merely a month later, on May 31 2015, Parrikar was quoted as saying “the UPA deal for 126 Rafales was way too expensive and it would have hampered other modernisation plans of the Indian military. The deal would have required around Rs 1.3 lakh crore over a period of 10-11 years, he added.”12
Very suspiciously, an already escalated figure of 90,000 crores ($14 Billion) for the deal merely a month ago had suddenly become $20 Billion now, almost a 50% increase in 50 days, for no rhyme or reason. Was the Modi government merely feeding these figures and lying to the media to justify its grounds for the renegotiation?
When Dassault entered the bid, it had no leverage and much to lose if it didn’t get the bid. Dassault was desperate, it’s reputation of being non-transparent in it’s business (rated worst – F Band by transparency international) wasn’t helping it much and Dassault’s CEO himself was mired in charges of financial irregularities.13 But Dassault-Ambani partnership changed everything. Now, Ambani – who controlled most of the politicians, thus controlled the government itself, was Dassault’s partner. So Dassault-Ambani started arm twisting Indian government to get the most out of the deal. Read about Ambani’s Gas Scams to know about his arm twisting prowess.14
Thankfully, it wasn’t that easy. At first whiff of corruption, the Defence Minister of UPA at the time, A K Antony – considered a rare honest politician in BJP-Con flock, stopped serious negotiations, delaying the deal. So Dassault-Ambani had to wait out 2 more years until Modi became PM.
Modi-Ambani unholy nexus is not a secret anymore. Modi shamelessly lends his face (PM’s credibility) to Ad campaigns of Ambani’s commercial products (Jio). So as soon as Modi had an opportunity, he ratified the deal that is most disadvantageous to India and Most profitable to Dassault-Ambani. What’s more, PM single-handedly took this decision, without even getting formal cabinet nod. Defence minister Parrikar himself wasn’t aware of the deal before 48 hours of the announcement. Crazy, eh?
It’s been said that Modi’s top guns Jaitley, Parrikar etc are not happy with Modi’s Deal. Subramanian Swamy of BJP has publicly spoken against and written a letter to PM Modi to stop this deal.15 He even threatened to file a PIL to stop the deal. A Rajya Sabha Seat has silenced him about his PIL to stop Rafale Scam. Of course, no one is talking about it, because most of Indian Media has been reduced to Modi’s cheerleaders. But for how long?
The scam is not in purchasing Rafale. The scam is at the outrageous price the jets are being purchased for and that too with terms which are totally unfair to India, trashing all the original objectives of the deal. India doesn’t need just jets. It needs cost-effective technology. If India had appointed our enemy Hafiz Saeed to negotiate a deal with Dassault-Ambani for us, even he might have come up with a better deal than Modi’s Deal!
Excuses being peddled
Of course, you’ll find whole teams of propagandists on Twitter, FaceBook, Quora, entire internet, in fact, feeding you false theories and rumours about how this is a golden deal for India, but fact remains, this is a Bull-Shit deal and a big scam to empty India’s coffers into Dassault-Ambani’s pockets. Just this week, Anil Ambani got the contract to manufacture spare-parts for yet to be made Rafales.8 There goes the offset into Ambani’s Pocket.
Bhakts argue that original deal of US$ 10.2 Bn had escalated to US$ 20 Bn or even more by the time Modi took charge and thus he scrapped the deal. A Lie. There are only 2 ways for cost escalation. 1: Inflation, which was agreed upon at 3.9% annual flat rate in the Original Deal. 2: Dassault breaches the contract. So how does US$ 81 Mn jet become US$ 243 Mn in a matter of 2-3 years with flat rate inflation index of 3.9%? How? By Magic? This is the scam, precisely. This article explains this Magic is Ambani. Immediately after Dassault won the tender, Ambani partnered with Dassault. There was no reason to scrap the original deal, except there was no profit for Ambani in the original deal. So Ambani-Dassault started playing dirty games until Modi came into the picture and scrapped the Original Deal and announced the Ambani Version. Additional minor customizations were added in the original deal so that the two deals can’t be compared straight away and to empower Modi’s dirty tricks department to fool people using these minor customizations as a reason for cost escalation from US$ 81 Mn to US$ 243 Mn per jet without tech transfer. This is why a white-paper on the Rafale Deal explaining the Original Deal, reasons for scrapping it and the New Deal in detail is required. The alleged scam in Bofors deal was just Rs 64 Crore, This is Rs 59000 Crore Deal. Think about it.
Bhakts argue that jets in Modi’s deal are upgraded (even tailor-made) for Indian terrain and the jets in the original deal were the basic model, so 3-fold cost escalation is justified. Firstly, these are NOT tailor-made planes for Indian terrain. Dassault was awarded the original deal because Rafales were best for Indian terrain. Secondly, the so-called upgrades cost no more than US$ 10 Mn per plane. Does this justify cost escalation from US$ 81 Mn to US$ 243 Mn? For example, per jet, Meteor Missile integration costs less than US$ 2 Mn (Missiles themselves are US$ 2.1 Mn per piece extra) per jet, Helmet Mounted Display System (HDMS) made by Elbit of Israel costs US$ 0.4 Mn. So We’re getting essentially the same so-called basic model with minor upgrades at 3 times the original cost. Open Loot. FYI, just in March 2015, Modi’s crony Adani partnered with Elbit of Israel.16 There’s something for everyone.
Bhakts argue that HAL, our own public sector company, has no efficiency/competence to make Rafales. Dassault wasn’t comfortable partnering with HAL. So? Is this deal for Dassault’s comfort? Dassault won the tender for providing 126 jets – 108 of them made in India via tech transfer with 50% offset at US$ 10.2 Bn. That was the deal, and that’s what India must demand (at the same cost, adjusted according to Inflation Index of 3.9% flat rate), OR impose a penalty on Dassault for breach of contract and wasting India’s time. Why would PM Modi deal with Dassault, if they back-tracked on the Original Deal? Too much trust in Ambanis? Anyways, the fact remains that HAL has made more planes that have flown, and won us wars than Ambani ever has. Do you never get sick of Bhakts who tirelessly defend scams of Ambani-Modi-Adani and pass it off as patriotism? Would you trust planes or spare-parts made by the Ambanis?
Bhakts argue that Modi made possible the 50% offset (reinvestment in India into companies which will make spares for Rafales. this part was in the original deal as well, but instead of just spares, 108 jets were to be made in India through technology transfer!), which will generate limitless jobs and business. Fact is, It has been India’s policy since 2005 that 30% offset will be part of every defence deal bigger than 300 crores. In this specific deal, the offset was already 50%. Modi hasn’t changed this 50% to 100% or even 51%. Period. Thank MMS if you must for the 50% offset clause. Modi has nothing to do with it. Modi is buying Rafales at 3 times the original cost (original 81 Mn US$ vs current 243 Mn US$ per plane). So even after 50% offset (read Ambani’s Profit), we’re getting the planes 1.5 times (50%) costlier. And the 50% offset is not pure discount. So even 50% offset clause has been offsetted against India.17 Further, won’t the offset generate 3 times more jobs and business if spares were to be made for 126 jets of original deal instead of just 36? Don’t do the Drugs, Bhakts. Do the Math.
Bhakts argue that in Modi’s deal, Dassault will ensure battle readiness of 25 (70% of 36) jets. But Dassault gave the same guarantee in the original deal too, for 13 (70% of 18) jets made by them. This is a standard guarantee Dassault offers to everyone, nothing special. More importantly, India was negotiating to get the same guarantee for 108 planes made by HAL in India as well. Modi scrapped the whole thing, and now we’re paying 3 times per plane (for whole lot of 36 planes) for battle-readiness of just 12 more planes? Really? Further, reliability has never been an issue with most non-Russian aircrafts, like Dassault’s own Mirage 2000. We have 51 of them since 1980. This was the reason IAF preferred more expensive Dassault & Eurofighter in its evaluation as compared to Sukhoi.
Bhakts would no-doubt talk about how we’re paying more because of eroding rupee. It’s bullshit of course. The deal is in US$ anyways, so exchange rate doesn’t matter at all. Their argument is ludicrous, however, as the deal is even bigger a scam when considered in INR. As per 2012 Deal, we were getting 126 jets (US$ 81 or Rs 445 Crore per plane) + tech transfer at 10.2 Bn US$, now we’re getting just 36 jets (US$ 243 or Rs 1617 Crore per plane) without tech transfer for 8.74 Bn US$. What we’re getting in Modi’s deal is not even 1/3rd (Considering the deal in US$) or 1/4th (Considering the deal in Rs) of the original deal.
Bhakts argue that 108 planes constructed in India by HAL would cost us more than Modi’s deal (per plane). This is absolute crap. The deal with Rafale was for 10.2 Bn US$ for 18 ready to fly Jets + technology transfer whereby Dassault will make 108 planes with HAL in India. That was the deal. Period. Modi’s dirty tricks department is in dire need of people with grey matter.
Bhakts argue that Modi has revised the original inflation index – 3.9% flat rate, to floating rate capped at 3.5%. You must be laughing already. At inflation index if 3.9% flat as per original deal, it would take 20+ full years until we pay double for the jets (even if compounded annually). We don’t want to pay double in 20 years, so we pay 3 times right now with floating inflation index capped at 3.5%? Who’s dumb? Modi? Bhakts? India? Don’t clap. Hit your head on nearest wall.
Bhakts argue that this deal should be compared with Egypt & Qatar’s Rafale Deals. Why? Why should we compare Modi’s deal with other countries’ recent deals, but not with Original Deal Rafale had with India back in 2012? This is like saying, see we can’t buy at lower price we had signed the deal 4 years back. We must buy at higher price someone else is buying now. Why indeed?
Bhakts will accuse you of depriving Army of Rafale jets. On the contrary opposition to this deal is to empower the Army and India by getting 18 Jets + Tech Transfer, manufacturing 108 Rafale fighters in India (Make In India) and other goodies as were present in Original Deal. We have to save our Tax money meant to be used for Army and Nation from going to Dassault-Ambani’s pockets.
Bhakts argue that if there’s really a Rafale scam, why hasn’t congress spoken about it? Will you believe Congress, if they speak about it? Dear Bhakts, facts are in front of your eyes. Use your brain. Modi is purchasing marginally better planes at 3 times the price, forgoing the technology transfer, to benefit Ambani Brothers who both are Dassault’s partners. Congress is in Ambani-Adani’s pockets too. That’s why you voted Modi, instead of congress, remember?1
Bhakts would challenge you that if there’s really a Rafale Scam, file a PIL. Really? Just curious, How many PILs did you or Modi file on any previous government’s scams? Zero. So the previous governments didn’t do any scam?
Bhakts would accuse you of not knowing the complexities of defence deals. If so, demand a white paper in national interest from PM on Dassault deal, including profiles of every entity involved in the deal. Surely, a white paper on the deal would clarify everything. It’s not too much to ask for, is it?
Bhakts argue that now Dassault is making tech transfer through JVs with Reliance. Really? Is India buying Rafales so that Reliance gets technology? Well the article says the same thing. This is a deal for Ambanis, Cronies. Not for India. Most ridiculous argument in defence of Dassault-Ambani.
Bhakts would accuse you of being anti-Modi. And indeed you are anti-Modi in this case, because Modi wants to empty India’s coffers into Ambani’s pockets, and you’re trying to stop him.
Of course, when Media itself is feeding lies to People of India with unnamed “source” based plants like this, you can’t really blame bhakts. Every benefit described in this plant is a lie. This article glorifies Rafale Scam as Modi’s achievement. Will you read DNA again? I won’t.
As mentioned in the article itself, Modi propaganda machinery has been spreading lies to defend Rafale Scam. What’s funny, they’re just repeating the same lies that have already been busted. I’m committed to bust every single propaganda of Modi’s dirty tricks department on Rafale Deal. The more they lie, the better this article will be. You need not believe me. You have facts. You have brain. Use both.