Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,921.50-96.9
Stock Analysis, IPO, Mutual Funds, Bonds & More

Rafale Judgement: End to political dogfights

The apex court's rejection on all objections on the three aspects of the deal - decision-making, pricing and the India offset partner - ratifies the right and the mandate of a government to take decisions effecting national security with different...

ET Bureau|
Nov 14, 2019, 11.06 PM IST
0Comments
AP
Rafale-AP

The contract the two countries signed on September 23, 2015, included no provision for any purchases beyond the 36 aircraft already agreed to.

By Pushan Das

The Supreme Court's rejection of a probe into accusations of corruption and impropriety around the controversial Rafale deal on Thursday lays to rest the political squabbling that has bedevilled India’s plans to replace its fleet of ageing combat aircraft. However, it will continue to raise questions around accountability, stagnating reforms initiated to streamline the procurement system, which the Rafale has come to exemplify.

The apex court's rejection on all objections on the three aspects of the deal - decision-making, pricing and the India offset partner - ratifies the right and the mandate of a government to take decisions effecting national security with different degrees of scrutiny. “Our country cannot afford to be unprepared/underprepared in a situation where our adversaries have acquired not only fourth generation, but even fifth generation aircraft, of which we have none,” said the court. “It will not be correct to sit as an appellate authority to scrutinise each aspect of the process of acquisition.”

The ruling sets a precedent in Indian military expenditures and procurement processes, wherein citing 'operational necessity' and immediate threat perceptions, the government of the day can adhere to lower levels of transparency and accountability.

First, the figure of 126 aircraft was arrived at by the Indian Air Force (IAF) after much analysis to replace older generation Russian jets that were set to retire. The most significant downside of the arrangement made by Prime Minister Narendra Modi in the purchase of 36 ready-to fly planes, rather than 126 fighter jets with a technology-transfer clause built in, was its preclusion of an option for a follow-on procurement of any additional Rafales by India at the same price agreed to in principle.

The contract the two countries signed on September 23, 2015, included no provision for any purchases beyond the 36 aircraft already agreed to. In other words, any desired subsequent buy would have to be renegotiated at a new price. Second, the selection of the Dassault Rafale as L1(lowest bidder) in the earlier contest for 126 Medium Multi-Role Combat Aircraft (MMRCA) was flawed according to a defence ministry review, as reported by Manu Pubby in ET in August 2018. The scrutiny revealed that if the Rafale were to be produced under licence in India - which was a crucial condition for the winning bid under the terms of the original MMRCA request for proposal (RFP) - Dassault’s bid would no longer be L1. The Eurofighter Typhoon would have then become the effective L1. The practice of sticking to lowest bids, or L1vendors, after they are non-compliant to the original conditions or parameters of a tender needs to be revisited in the Defence Procurement Procedure (DPP) published by the ministry of defence (MoD).

Third, MoD's inability over the years to put out a set of guidelines to streamline its arms acquisition process has led to a flurry of government-to-government (G2G) negotiations, with the hope that the procurement cycle becomes less cumbersome, much faster and, more importantly, less controversial.

The frequency at which the G2G route being taken by successive governments over the last few years in defence procurement is a testimony to the failure of the present defence procurement policy to deliver, and reflects India’s inability to procure through an open competitive process in a time-bound manner. There have been a number of instances where crucial acquisition proposals have been cancelled midway and re-tendered thereafter, with some having little success. The G2G route does potentially raise issues around the possibility of malpractice in the commercial advantages to single vendors and the elimination of competition.

Finally, the acquisition of just 36 Rafale aircraft after the truncation of the original requirement of 126 fighter jets with a technology transfer clause built in has necessitated a quest for acquiring another similar performing aircraft, like the Lockheed Martin F-16 or the Saab Gripen. The acquisition of a second aircraft type broadly in the same capability set goes against the standardisation of the IAF fleet.

Reducing the number of aircraft types by acquiring only one type, as opposed to two or more, will improve affordability by reducing acquisition, operating, integration and training costs. This will result in a leaner, efficient aircraft fleet possessing the right operational capacity and war-fighting capabilities. The old MMRCA RFP, and the final piecemeal acquisition of a limited number of Rafales, need to be taken as a test case and lessons drawn to improve the defence procurement process, oversight practices, within a rigorously observed defence policy and planning framework.

The frequent use of the G2G route to avoid the perceived malpractices of an open competition needs a revisit. As does the practice of sticking to lowest bids after they are non-compliant.

Also Read

SC dismisses Rafale review pleas

Three Rafale jets handed over to India: Government

Will Rafale be a 'game changer' for India?

Congress played with India's security on Rafale controversy: Adityanath

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service