Parallel negotiations for purchase of Rafale fighter jets were believed to have been conducted by the Prime Minister’s Office, a report by The Hindu reveals. The defence ministry had reportedly raised an objection to this in a November 2015 note to then-defence minister Manohar Parrikar.
ThePrint asks: With a new report on PMO’s role in Rafale negotiation, where does the story go from here?
PMO’s intervention in Rafale negotiations was a clear circumvention of laid down procedures
Professor of International Relations, Ashoka University
The recent report confirms that during various stages of the Rafale negotiations, there was an unwillingness to follow due procedure. We know that in January 2016, the National Security Advisor had conducted some negotiations with the French over the issue of a sovereign guarantee versus a letter of comfort.
Given that this was an inter-governmental deal, it would have been better to get a sovereign guarantee from France. What the government instead settled for was a letter of comfort, which isn’t really enforceable by law.
The latest report shows that by November 2015, the ministry of defence had already learned from their French counterparts, that the PMO had directly been in touch with the latter regarding the Rafale deal.
This was a circumvention of the procedure that has been laid down for negotiating such agreements. The Defence Procurement Procedure (DPP) makes it very clear what the composition of the contract negotiating committee (or the Indian Negotiating Team, as it has been called in this case) should be. There is no role for officials from the PMO to be involved in these negotiations. This is tantamount to a short-circuiting of the laid down procedures.
There was clearly disquiet in the Indian Negotiating Team over the PMO’s attempts to bypass them, which in this particular occasion led to a suboptimal outcome – as recognised by members of this team.
The entire episode underlines the point that circumventing the established procedures may not be the best way to go about negotiating such extremely complicated defence deals, the processes for which have been laid down for good reason.
Author’s views are personal.
There is no threat to Rafale deal, this is just a political game of one-upmanship
Editor, Defence Forum India
Did the PMO undermine the defence ministry by running parallel negotiations? Going by the revelations in The Hindu today, the answer is yes. The defence ministry note shows that the PMO did not trust the MoD and undermined it in its negotiations with Dassault. A probable reason could be that the government tried to speed up the process with executive direction from the Prime Minister, and removing any roadblock.
The disclosure today is about the clause on bank and sovereign guarantees that the Indian negotiation team was pushing for and the French were adamant on not providing. They instead offered a letter of comfort.
There is no indication of any orders on influencing the price, but this fresh revelation shows that the French got an upper hand by calling the PMO to resolve any issue when they felt the Indian team was bargaining too hard. Maybe at some stage even price was discussed with the PMO but that can be revealed only by an investigation.
As far as the Rafale deal goes, it is not under any threat. This is a game of political one-upmanship between the BJP and the Congress. The latter is trying to prove that there was a case of crony capitalism, and this new revelation has given it fresh ammo.
This again shows the crying need for defence procurement reform in India
Chief Editor, Delhi Defence Review
How the Rafale deal will play out politically, no can predict. But the revelation about the PMO’s role in the negotiations with the French manufacturer only serves to throw more light on the crying need for defence procurement reform in India. As it is, for major procurements, the ministry of finance is involved and simply the concurrence of the finance wing in the ministry of defence (MoD) is not enough.
Moreover, the Defence Procurement Procedure 2016 itself makes the cabinet committee on security (CCS) the decision-making authority for ‘procurement on strategic considerations’, albeit based on the recommendations of the Defence Procurement Board. Other stakeholder mechanisms are also being created to ‘guide’ defence acquisitions in a ‘think-tank’ role.
In all of this, what hasn’t witnessed any forward movement is the Defence Procurement Organisation (DPO), which has been ‘almost ready’ for a while now. DPO is intended to act as an empowered executive arm of the MoD’s Defence Acquisition Council and will consolidate the functions of various departments involved in procurement while improving accountability.
What is more, DPO will include legal and contracting experts to improve the way India negotiates deals. Ultimately, only a serious DPO sans interference from any quarter can reduce red-tapism and inter-ministerial wrangling associated with defence procurement in New Delhi.
Rahul Gandhi is talking as if Anil Ambani has taken Rs 30,000 crore home in the Rafale deal
Defence whistleblower
Rahul Gandhi was once again at his best today to prove that there is a scam in Rafale deal. It is a sad day for our country. On one side, we have this government working towards getting the best equipment for our defence forces and on the other hand, we have the opposition that is trying to mislead the people.
Gandhi is talking as if Anil Ambani has taken Rs 30,000 crore home. Ambani’s Reliance Aerostructure Ltd has only got an order to manufacture a few parts and the whole project allotted to them is only worth Rs 850 crore. The fact that Gandhi is reading a letter with just a paragraph from somewhere in between shows his intention. The letter, even if it’s true, talks about negotiations and not about monetary negotiations. Negotiations could be about spares, equipment, training, manpower etc.
In any case, the PMO and the ministry of defence have to work together on such deals and lots of correspondence take place on a daily basis. All documents were submitted in the Supreme Court, which found them correct; the CAG, too, has given its report in favour of the government. Rafale is an inter-governmental deal, and therefore to call it a ghotala (scam) and address the PM as chor (thief) is tarnishing the image of the country and its PM, and creating a divide within our armed forces.
PMO leaning on the defence ministry to get the Rafale deal inked fast cannot be termed as a scam
Senior associate editor, ThePrint
The new revelations about the PMO’s involvement in the Rafale negotiations is set to muddy the political waters ahead of the general elections. The fact is that the Rafale saga is more of a perception battle than one based on facts.
If we look past the political aspect of this battle, the fact remains that no high-profile negotiation can happen without any views or, if I dare say, interference from the PMO.
Be it the Indo-US civil nuclear deal signed by the UPA government or the Rafale deal inked by the Narendra Modi’s BJP government, the PMO will lean onto the concerned ministry as these are big ticket deals that shape the relationship between the two countries involved.
The Rafale saga will continue because the opposition believes it has finally got the silver bullet to bring down the Modi government.
But nothing becomes a scam unless there is evidence of scam — a money trail — and there is none so far in the Rafale story.
The PMO leaning on the ministry to get the deal inked fast cannot be termed as a scam. Remember that despite all the efforts, the deal for 36 Rafale fighter jets was finally signed in July 2016, over a year after Prime Minister Narendra Modi famously announced India’s decision to buy them in Paris in April 2015.
By Fatima Khan, journalist at ThePrint.