Rafale Deal – Plain Naivety or Deceitful Connivance !!

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SAFI H. JANNATY | Caravan Daily

CALL it an irony or mockery or a comedy, the more the parties are trying to cover up the Rafale fiasco, the more they are getting exposed. As the controversy keeps raging, the long serving CEO of Dassault Aviation, Eric Trappier has been speaking to the media in France and India with primarily to safeguard the interests of his company in the deal which is understood to some extent. What is ironical and woeful is the complicity of the mainstream media in rescuing the parties.

Close on the heels of his interview to Economic Times on 28 October, 2018, Eric Trappier spoke at a greater length to Smita Prakash, Editor of Asia News International (ANI) on 12 November, 2018. The journalists of both the so-called leading business daily and the premier news agency were seemingly more interested in abetting the cover up rather than reporting, leave alone exposing it. One would wish the journalists were just naïve or unsuspecting; but, the way they posed questions and allowed the CEO to slip away easily makes one circumspect.

In his latest interview, it was easy for Eric Trappier to stress that being a CEO one can’t lie, but, constant and continuous deviation from one interview to another reflects the fact that it is not just a lie, but a monumental one and it is all manifest and clear.

Earlier, in his interview to AFP in France that was published on 11 October, 2018 just prior to the visit by the current Indian Defence Minister, Nirmala Sitaraman, Eric Trappier had asserted that the offset obligations of Dassault Aviation with Reliance Group would meet around 10% of the total offset amount. Though he repeated the same statement in his interview with ANI, but he had another twist wherein he revealed that the figure of Dassault’s capital investment in the JV with Reliance would be 49% of the total capital of 800 crore, namely, Rs.400 crore.

Let us rewind the reel to a few weeks ago when he was interviewed by the journalist of Economic Times. He had then put the figure to be Indian rupees 850 crore as the  amount being invested by Dassault and which is equal to roughly Euro 102 Million, the figure that was touted as the FDI by Dassault during the laying of the foundation of the JV at Mihan in February, 2017.  Let’s now use the latest figure given by him and take a reverse route to ascertain as to what the value of the basic Rafale fighter jets manufactured by Dassault should have been. If Rs. 400 crore amounts to 10% of the offset obligation, the total 50% offset obligation on the shoulders of Dassault Aviation should be a sum of just Rs. 4,000 crore (Rs.400 crore x 10 times)  which returns a figure of Rs. 8,000 crore as the total value to be apportioned for Dassault Aviation in the deal. We also know very well that the total deal cost India a sum Rs.59, 000 crore.

Should we be so naïve and ignorant to assume that a whopping Rs.51, 000 crore or 85% of the total deal value had been earmarked for components and weaponry to be procured by suppliers other than Dassault Aviation? Was it not a mockery of journalism for the journalist digesting without a burp the figure of Rs.400 crore thrown on the table as 10% of the offset obligations when the total offset obligation runs into the range of Rs.30,000 crore. Now don’t expect the journalist having just a tête-à-tête to fathom as to how Reliance Group was termed as ‘key partner’ if a mere Rs.400 crore out of Rs. 30,000 crore is the total amount being invested along with them.

The manner in which the JV with Reliance Group was covered and celebrated in India left no doubt in anyone’s mind that Reliance would be the key partner for fulfilling the entire offset obligations of not only Dassault Aviation. Do we still expect her to have read the notification filed by Reliance Infrastructure, the holding company of Reliance Defence Limited with the national stock exchange on 16 February, 2017, in which it had stated that the Reliance entity would be the key offset partner of Dassault Aviation in fulfilling its offset obligations to the extent of Rs. 30,000 crore?

When Eric Trappier reiterated that the company was negotiating with hundreds of Indian companies and partnerships had been concluded with thirty odd firms, she did not find it apt to ask him: When the joint venture with Reliance Group was forged as early as October 2016, just after a month of the signing of intra government agreement what were the reasons for not announcing agreements with others to execute the balance 90% of the offset obligations?

Again, God knows from where the journalist got the figure of around Euro 20 billion as the value of the earlier deal struck with Dassault for 126 Rafale during the UPA Government when the total price at which the tender was awarded to Dassault in 2012 was US$ 10.2 billion. The doubling of figure notwithstanding, it was quite easy for Eric Trappier to dismiss the huge difference in the prices stating that the pricing be compared between the aircraft to be delivered in ‘a fly away condition’ and from that perspective the price agreed for 36 aircraft in 2016 is cheaper by 9% than the price that was agreed for 23 aircraft earlier in 2012.

This generous discount by Dassault Aviation with the condition of 50% of the deal value to invest back in India. She was so impressed with that magnanimity that she forgot to ask the reason as to why Dassault Aviation invested Rs. 284 crore in Anil Ambani’s entity, Reliance Airport Developers Limited, another loss making unit of Reliance Group and having zero revenues.

Eric Trappier walked totally unbruised over the most controversial issue and the bone of contention in the whole episode, namely, the involvement of Anil Ambani’s Reliance Group in the deal. He played to the soothing ears of the editor the same music of Dassault Group’s forging relationship with Reliance Group as early as 2011 who tried mutely to correct that the Group happened to be owned by Mukesh Ambani. As shrewd as he is, the CEO found it easy to refer to them as one family and carried away with the talk of their father Dhirubhai Ambani. In which business environment, family pedigree is set as the sole criteria to undertake a business enterprise?

Good that he did not carry with him this time the business journal of 2012 that had covered or published the report of Dassault signing an MoU with Reliance Industries Limited, such a childish and presumptuous act. On the question of due diligence, he got away with the standard argument that they had held meetings with different business groups during the same period. It must be quite hard for her to draw the attention of the CEO on how business scenarios worldwide keep changing and how many giant size business groups collapsed during the years 2011-2016 and hence the relationship of 2011-2012 even if it were to be with the same family and business group required due diligence afresh and nowhere on this planet, a business entity would shake hands with a counterparty which is inexperienced in the relevant business sector and which is enmeshed in debts. It is a matter of public record which must be known to him and Dassault Group that the first ever venture that Anil Ambani’s Group had made in the defence sector was acquiring a controlling stake in Pipavav Shipyard in March, 2014.

When questioned about the loss of opportunity for India to have access to technology as no fighter jet would now be built in India; nor the deal involves transfer of technology, Eric Trappier cleverly pointed to the training and learning process for producing components for the Falcon jet to be manufactured in the Dassault Reliance Aerospace (DRAL) unit at Mihan and how that would enrich the poor Indians. Wow, a good lollipop for the kid and she relished it without taking the pains to understand and argue on the difference between commercial aircraft and fighter jets leave alone the fact that he did not even mean to transfer the technology to build a full-fledged commercial aircraft.

For the sake of formality, she did pose a question as to why the agreement for supply of 126 aircraft was not signed between Dassault and the Ministry of Defence when it was being pushed by him until two weeks before the visit of the Prime Minister in April, 2015. Again, she got content with the justification that the hitch was over the insistence by the Indian side for Dassault guaranteeing the jets manufactured both in France and India?  When he had stated that 95% of the paperwork was complete and only minor issues related to working relationship were left, this very important condition too must have been finalized and certainly it could not have been part of the balance 5% issues.

Who on earth would accept buying any equipment without a guarantee regardless of the place it is manufactured? Besides, in his own words that time “I would like to go faster [but] it is an enormous contract. As I have said before, I prefer that we are taking our time now … rather than have problems later.”  How could he state now that the deal announced by the prime minister was a pleasant surprise and a gift on a silver platter for them?

Who would also remind her that it is not just the Congress party or the opposition parties which are pointing fingers at the Rafale Deal? Several eminent journalists, legal luminaries, economists and defence analysts have been questioning the deal and the nexus between Dassault and Reliance. Arun Shourie, Prashant Bhushan and Yashwant Sinha are the ones who have filed joint plea requesting the apex court of the country to order investigation on what they termed as ‘criminal misconduct’ .

Blatant defence of brazen lies by the parties involved is one thing and covering it up is another. The latter is more dangerous for the nation and if the independent journalists, news portals and activists were to stop their investigative endeavors or get bogged down by threats, the corrupt politicians, bureaucrats and businessmen would amass wealth and push the nation into penury.

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All opinions and views expressed in columns and blogs and comments by readers are those of individual writers and do not necessarily reflect the editorial policy of Caravan Daily

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