New Delhi: The Indian Air Force officer who led the negotiations for the 7.878 billion-euro deal for 36 Rafale fighter jets said Friday that no one from the Ministry of Defence had raised any objections before his team about any sort of ‘interference’ by the Prime Minister’s Office.
Air Marshal S.B.P. Sinha (retd), the deputy chief of the IAF in 2015-16 who led the seven-member negotiating team, told ThePrint: “No such objections were ever brought to me by anybody from the Ministry of Defence. I am hearing about the letter for the first time.”
The letter sinha referred to was part of documents published by national daily The Hindu Friday, giving rise to a fresh controversy over the Rafale deal.
The documents showed that MoD officials, including then-defence secretary G. Mohan Kumar, objected to “parallel negotiations” by the PMO and protested that the position taken by the PMO was “contradictory to the stand taken by MoD and the negotiating team”.
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What the note was about
Speaking to ANI, Mohan Kumar said the letter had nothing to do with the price of the deal. “It was about sovereign guarantee and general terms and conditions,” he said.
MoD sources pointed out that the then-deputy secretary (Air II) who initiated the note was not at all involved in the negotiations.
Incidentally, a complete analysis of the file noting shows that Manohar Parrikar, the defence minister at the time, had allayed the concerns of his ministry officials.
Parrikar, in his note, had said: “It appears that the PMO and French President’s office are monitoring the progress of issues which was an outcome of the summit meeting and para 5 appears to be an over reaction. Def Sec may resolve issue/matter in consultation with the Pr. Sec to PM.”
What the negotiators were discussing
The Rafale negotiations were being handled by the IAF and not by the bureaucracy, since the negotiating committee was headed by Air Marshal Sinha.
Even though the seven-member committee had five joint secretaries from the MoD and its finance wing, no mention of PMO interference was ever raised before Sinha.
Sources said the officials wanted a bank guarantee, and this was an issue under discussion.
“Bureaucracy goes by precedents. Usually, when a deal is signed with a foreign vendor, a bank guarantee is taken, but in this case it was a government-to-government deal. Even under Foreign Military Sales route with US and in many deals with Russia, bank guarantees were not taken. Here, it was the French government, and we did not want to reduce it to a vendor,” a source said.
Sources said Air Marshal Sinha had received a letter from his French military counterpart talking about the fact that the French President’s Office and the PMO were talking about a comfort letter and not a bank guarantee.
Following this, the Air Marshal wrote to the PMO wanting to know if such talks were on.
The Rafale deal was signed under the Defence Procurement Procedure (DPP) 2013, and Para 71 — which deals with government-to-government deals — says such “procurement would not classically follow the Standard Procurement Procedure or the 15 Standard Contract Document, but would be based on mutually agreed provisions by the governments of both the countries based on an IGA, after clearance from the Competent Financial Authority”.
Para 72 of the DPP 2013 says such an inter-government agreement is expected to safeguard the interests of the government of India, and should also provide assistance of the foreign government in case the contract(s) runs into an unforeseen problem.
“The comfort letter was exactly for this,” the source said.
Also read: Flogging a dead horse, says Nirmala Sitharaman on Rafale deal media report
PMO enquiries not ‘interference’
Defence Minister Nirmala Sitharaman said in Parliament that the PMO periodically enquiring about the progress of the negotiations cannot be seen as “interference”.
“Do you think that during the nuclear deal with US, the negotiations were handled by the MEA alone and PMO did not have any inputs or no talks were held?” said an MoD source.
“Also, remember that in India, defence procurement is done through various committees. At times, some will have different views and talks are held. In the end, the majority of the committee agree on certain aspects.”