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.
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”.
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.”
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