So, despite India buying Rs 78,000 crore of equipment each year, there are long delays; signing the first Rafale contract, in the UPA period, took 180 months. BJP deal cheaper, but real issue is why the deal was not finalised in 10 years and why issue of HAL's cost and Rafale quality assurance not addressed

With the CAG report on the BJP government’s purchase of 36 Rafale fighter aircraft giving both the BJP and the Congress enough ammunition to claim that their stand was correct, it is unlikely the storm over the purchase is going to end anytime soon. The Congress has to be happy with the CAG’s observation that by allowing Dassault to not issue a bank guarantee, this lowered its costs, but the benefit of this was not passed on to the government. The BJP, on the other hand, has to be pleased with the CAG’s finding that, after taking various parameters into account, its deal was cheaper than that by the Congress party, even if it was only 2.86%.

Also, since the Congress/UPA government never actually concluded its deal due to non-agreement on critical parameters like the labour costs of the aircraft that were to be manufactured by HAL and Dassault’s refusal to guarantee the HAL-Rafael’s quality, the BJP can convincingly argue that there was no Congress deal; and had these parameters been factored, the BJP deal would be even better. As the CAG report puts it, “the above two issues led to a stalemate in negotiations. Five years after the bid, and after three years of evaluation and negotiations, there was no finalisation”.

Indeed, the CAG points to how, during the UPA period, Dassault was allowed to go ahead in the negotiations despite its aircraft failing to qualify technically and despite the fact that its bid did not mention the capital costs of producing the aircraft here.

What is even more worrying, and the Congress alleging foul play in the BJP’s purchase will only make this worse, is the huge delays in buying equipment and the impact of this on the armed forces; Economic Times has reported that India is in talks with Russia to buy mothballed MiG-29s, after some up-gradation – in all probability, this is the result of the urgent need to maintain a minimum-sized fleet.

So, despite India buying Rs 78,000 crore of equipment each year, there are long delays; signing the first Rafale contract, in the UPA period, took 180 months. Part of this is due to the culture of over-specifications by the armed forces instead of just giving their broad requirements – the Air Staff Qualitative Requirements for the Rafale jet deal had 660 parameters! Even something as non-complex as a Doppler Weather Radar – this had 42 parameters – took eight years to conclude the contract while the Indian Meteorological Department bought this in just nine months. Add to this massive over-specification that meant no firm could ever meet all the specifications, the procurement procedures are extensively overhauled every 2-3 years. If this wasn’t bad enough, when the UPA’s defence minister appointed a team of outside experts to oversee the compliance of the Integrity Pact in June 2012, and these experts said it was okay, the minister decided the matter be examined again by the ministry’s officials.

The team was not able to give its report in the remaining two years of the UPA; and when it did, in March 2015, it naturally recommended that the process be scrapped since the issue of the HAL-costs and quality had not been addressed; while it is possible to argue the BJP government influenced the officials once it came to power, there is no satisfactory explanation from the Congress party on either how soon these issues would have been sorted out or how they would have impacted the price; and how was a Rafale plane to be bought, even if it was the cheapest, if the French manufacturer wasn’t going to guarantee the quality of the aircraft produced here?

Sadly, such issues, including the structural defects in the procurement process and the depletion of the armed forces’ firepower as a result, have got brushed aside in the noise about the PMO’s interference or why Dassault was allowed to get away with not giving a bank guarantee.