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CAG report shows IAF wanted only Rafale, competitive bidding was just a charade

Rafale failed on several parameters but the Air Force, impressed by Mirage aircraft in Kargil war, remained insistent on jets from Dassault.

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The CAG report tabled in Parliament recently tells us that the Indian Air Force wanted the Rafale fighter jets from day one. In fact, it wanted a jet from Dassault Aviation.

But the question is: Why?

Let us go back to the Kargil war in 1999. The Dassault Mirage 2000 aircraft proved its capabilities and impressed the Air Force very much. In August 2000, the Air Force proposed the acquisition of 126 upgraded Mirage 2000 jets. This was shot down by the defence ministry as the Defence Procurement Procedure (DPP) 1992 did not allow for a single-vendor purchase. The Air Force re-submitted its proposal in December 2001, saying it should be treated as a repeat purchase.

However, the insistence of the government to not get into a single-vendor deal led to a request for information (RFI) being issued for the acquisition of 126 medium-range combat aircraft. It largely consisted of single-engine jets: Dassault Mirage 2000-5 Mk.2, Lockheed Martin F-16, Mikoyan MiG-29, and Saab JAS 39 Gripen. Only the MiG-29 had twin engines.

But once Dassault closed the Mirage production and insisted on fielding only the Rafale, the acquisition was expanded to what became the Medium Multirole Combat Aircraft or the MMRCA. This also got Boeing F-18 and the Eurofighter Typhoon into the competition. Russia changed its offering to the MiG-35.

Also read: India favoured Rafale also because of its ‘nuclear advantage’

The Request for Proposal (RFP) was issued to all these contenders in August 2007, with a demanding Air Staff Qualitative Requirement (ASQR), which led to most of the contending jets not satisfying it, warranting certain India-specific enhancements.

This was a drastic change from the IAF’s own argument as reported by the Comptroller and Auditor General (CAG) in March 2001 while re-submitting its proposal for Mirage 2000, in which the IAF had argued that “while other available options such as Rafale, Eurofighter, F-35, etc., were technologically superior to Mirage 2000, the excess combat capability of these aircraft would remain underutilised as Air Force requirement was a comparatively modest aircraft for shorter range missions.”

Although the IAF ran flight trials, none of the contenders were completely in compliance with its ASQR. The CAG report states: “In the Technical Evaluation conducted in May 2008, five of the six aircraft could not meet all the ASQR parameters. Four aircraft had one to two deviations. Rafale aircraft could not meet 9 ASQR parameters prescribed in the RFP.” On three separate occasions in 2009, the Rafale was rejected, but it managed to remain in the hunt in complete violation of the Defence Procurement Procedure.

Four aircraft were eliminated after the flight trials — the F-18, F-16, MiG-35 and the Gripen — because they did not meet the ASQR parameters of “growth potential” and “design maturity”. The CAG says: “There was no objective, verifiable or measurable criteria prescribed for evaluation of these parameters.”

However, the Rafale, which did not satisfy 14 parameters, made it to the IAF’s down select along with the Eurofighter. It is apparent that the IAF did not want certain jets. It didn’t want the American jets as it argued that “it could face difficulties in case sanctions were imposed by (the) USA”.

Also read: Buying complex weaponry is no easy business, but Rafale shows India’s process is broken

The IAF has since bought aircraft and helicopters from the US — the C-130, C-17, Apache and Chinook. The Indian Navy bought P8 aircraft. The Russian MiG-35 was not in the game at all as the IAF didn’t want Russian jets, which are notorious for high maintenance and operational costs — one of the reasons why lifecycle cost was the criteria in the RFP, as Russian jets are cheaper in direct acquisition costs but costlier in the long run.

A comparison can be taken from the CAG report on heavy lift helicopter acquisition. Total Life Cycle cost quoted by Boeing for Chinook helicopters was $1.47 billion and that by Rosoboronexport for Mi-26 was €8.40 billion. Direct acquisition cost was $1.20 billion and €1.06 billion, respectively.

The CAG report says that Dassault was non-compliant in ASQR, RFP and in violation of the DPP. It did not give complete information, and the columns it had left blank were filled by the Indian committee looking into lowest bidder (L1) under various assumptions.

Dassault Aviation was declared L1 and Eurofighter, which had provided all the details, was found to be L2! It was only during negotiations that it became apparent that the costs were going way beyond the quote, and the Dassault was no longer L1.

According to the CAG report, a team of defence ministry officials had submitted a report in March 2015, saying that Dassault’s bid should have been rejected at the technical evaluation stage. It said, “The acceptance of additional commercial proposal after bid submission date for capabilities, which were already prescribed in the RFP, was unprecedented and against the canons of financial propriety.”

Also read: The 4 IAS officers in the thick of the Rafale deal controversy

Yet, just days later on April 10, 2015, Prime Minister Narendra Modi announced a deal for 36 Rafale. Was the PM not aware of the defence ministry’s report? Or did he go ahead regardless hoping for a better deal? CAG report does not indicate a better deal. It is Dassault that laughed all the way to the bank.

Various reasons are attributed to why the IAF wanted the Rafale — comfort with Dassault, Indo-France strategic ties, procuring weapons from France that are seen as sanctions proof and also a nuclear weapons delivery role.

This raises questions on the gaps that exists in understanding the needs and reasons of the IAF and the armed forces in general for certain weapons systems with the civilian leadership. If the IAF wanted only the Mirage and later the Rafale, then why wasn’t a government to government deal done earlier? DPP-2006 allows for an inter-governmental agreement.

If an IGA had been done in 2007, the Rafale jets would have been a lot cheaper and the Air Force would have already had the 126 jets it requires. In fact, the total requirement is 200-250 Rafale kind of jets. There was no need to have a sham tender that made a mockery of procedures and rules, because this has sent a very wrong message to weapons’ manufacturers across the world.

India is going to run what is dubbed MMRCA 2.0. It has got responses from the same contenders as MMRCA 1.0. The CAG report will be read by foreign suppliers. They will see how the MRCA tender played out. A competing vendor told noted defence journalist Saurabh Joshi, “If you’re permitting cheating, at least have the decency to not make the rest of us work so hard.” Will they respond to the RFP that’s due to be released?

Yusuf T. Unjhawala is the editor of Defence Forum India and a commentator on defence and strategic affairs. He tweets @YusufDFI

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  1. America reluctance to part with any useful technology goes against picking their fighters. US & Russia both flex their mussels to get indian defence contract. It is high time we become self reliant and as such India should make it point to work with countries that is much more forthcoming in sharing technologies. It interesting to note that the CAG earlier noted the boeing P8i delivered to India was substandard.

  2. CAG report on Rafale exposes IAF quite badly as it could not clearly state that it requires only Mirage or Rafale and nothing else. There would have been nothing wrong with this demand. Government could have got a best possible deal for it under IGA by 2007 itself. The MMRCA tender was a waste of time and indeed a fraud. In the end, Modi did well to get them their immediate minimum requirement after due negotiations with France. But Modi did not explain why he announced the deal in Paris, when the MMRCA tender talks were on with HAL.

    Hopefully, in the next MMRCA tender, we will have a proper process followed and it will not be a repeat of the previous deal. IAF and armed forces in general must accept their short comings in this area and behave responsibly.

  3. All senior officers / HOD may be posted in any x y z organisation are and were always a slave to the PM house. One phone call of pm house decide the FATE of any Case. Whatever these CAG , Air Force Officials, Defence Ministry officials will back out what statements they are giving to save the Face value of Modi ji, tomorrow when another PM will be elected in May 2019. Truth always Prevail.

  4. A nice article! IAF should get what they need and not what MoD officials sitting in their officees decide. And the article clearly tells that Congress is to be blamed for IAF problems. They could have done IGA in 2005 itself and buy Rafale. Then Modi doesn’t even come in picture. But of course they were probably lobbying for the Eurofighter in the hopes of getting some commission as has been the norm in defence deals under their reign in India.

  5. The author of the article forgot to mention that the Eurofighter bid was also non- compliant of the RFP. Thus, in effect no bidder was eligible! Modi did the right thing by adopting the IGA route. In the final analysis, IAF is going to fight the war, not the politicians nor the bureaucrats . Modi gave IAF what they wanted. The author is right in saying that IGA route should have been adopted in 2007 itself. India is hopelessly dependent on foreign suppliers to fulfil its defence needs. Whether it’s Russia, France or any other country, it is bound to extract its pound of flesh. The only way out is make your own R&D and become self-reliant. Short cuts like transfer of technology are not going help either. HAL indulged in ToT for seven decades. What happened? Emulate China , which adopted three-pronged strategy- copy, steal or do your own reasearch.

  6. This is unnecessary attempt to politicise the Rafael issue. Mirage, made in France has already proved its capabilities, hence, with all reason said above, was asking for French made Rafael for Indi’s security point of view in longer term.

  7. The way audit is done by CAG for extremely costly and complex systems should be changed. There should be two levels of audit. First CAG should be done when technical evaluation is completed to check that all technical parameters are being met and all relevant data / information has been provided. Second audit to be done only of the financial aspect after L1 party has been selected but order is yet to be placed. CAG should do both these audits in time bound manner, say two months in each case. This will ensure there are no objections at initial stages or charges of wrong doing later on. This CAG report is basically useless. It only does a postmortem examination.

  8. The airforce should get what they want, not what some babu thinks they should get. After all its the pilots whose lives are on the line. Senseless article. Presstitutes at it again.

  9. The fact of the whole article is – congis knew that it was either French or Russian which will see us through in a catch22 situation. So that should have gone for an IGA the moment opportunity arose. But the farce of tender was kept alive. With amount of commissioning that happened during the UPA II this was the norm. When Modi came in he did what a government would do in country’s interest. Homes in on French and had an IGA. The pity is Congress hasn’t matured. For them it’s still family then party, the country can go to dogs. They delayed the purchase because of selfish interests. But post 2014 it has been more of trying to derail the acquisition for again narrow parochial interests. India is in urgent requirement of a viable opposition if the BJP isn’t to go the Congress way – arrogant and self-serving. For that either the family should mature or they should be kicked out – Congress will fare better if it opts for the latter choice!!!!

  10. In my opinion the only contenders are the French and Russian jets. The American fighters or the Eurofighter or even the Grippen will be a disaster for the air force irrespective of the compliance or otherwise to our requirement. In times of conflict with Pakistan the US will surely ground our fleet of American aircraft. The Eurofighter will be even worse. It is assembled from parts made from multiple European countries any one of whom can ground our entire fleet at all by cutting off supplies of spares. The Grippen is no better with Engines derived from US designs and can easily be grounded. Another reason for avoiding F16s an F18s is that PAF pilots are probably the most highly skilled pilots of F16s with immense experience of American aircraft. Our pilots with far less experience with US aircraft will be no match with PAF pilots with American aircraft.

  11. Why no mention of congress government finalising 126 aircraft deal with dassault before BJP. This is what Rahul gandhi have been comparing from so many days. dont give biased news

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