rafale shady business: Why Detailed Price Specs Of Rafale Deal Aren't Being Shared

[duhastmish]

NDTV has learned that a confidentiality clause in the government-to-government deal signed in 2016 for 36 Rafales means that neither India nor France can release these details unless ordered to do so by a court in the event of a disagreement between both parties.
All India | Written by Vishnu Som | Updated: November 23, 2017 21:34 IST

The government and Dassault say that the new Rafale deal is far more comprehensive. (File photo)



New Delhi: Exactly a week after Defence Minister Nirmala Sitharaman promised to share the financial break-up of the 58,000-crore or $8.7 billion deal with France for Rafale fighters, details are emerging on just why the government has still not released this data in public.

NDTV has learned that a confidentiality clause in the government-to-government deal signed in 2016 for 36 Rafales means that neither India nor France can release these details unless ordered to do so by a court in the event of a disagreement between both parties.

The Congress has alleged that Prime Minister Narendra Modi's government has caused "insurmountable loss" of taxpayers' money in signing the deal for 36 Rafale aircraft from France. The opposition party has argued that the cost of each aircraft is three times more than what the previous UPA government it led had negotiated with France in 2012, statistics which have been strongly disputed by the government.

The government, for its part, insists that its predecessor was never able to close its deal for 126 Rafale fighters for the Indian Air Force, 108 of which were meant to have been made in India in partnership with the state-run Hindustan Aeronautics Limited. They say the deal they have secured in 2016 for 36 Rafales from France in an off-the-shelf buy includes a superior weapons package and complete logistics support at two designated Indian Air Force bases.

The Congress also alleges crony capitalism benefiting billionaire Anil Ambani, who is seen as close to PM Modi and whose Reliance group is partnering with Dassault. As part of Prime Minister Narendra Modi's "Make in India" campaign, foreign defense companies have to invest a percentage of the value of deals that they have been awarded into India to help the country build its own manufacturing base and wean itself off imports. This "offset" through Reliance is questionable, says the opposition, pointing out that Reliance has virtually no experience in defense manufacturing. Reliance has threatened to sue over these allegations and says that this offset contract is India's largest ever.

The 51-49 % partnership will see Dassault handle the entire production and guarantee of aerospace components manufactured through the joint venture. Reliance Defence is responsible for providing land and human resources at a site in Nagpur. For now, the JV is meant to manufacture aerospace assemblies for the Falcon business jet which would eventually be manufactured in India for sale to customers around the world. A second Dassault manufacturing facility in partnership with Reliance Defence may come up elsewhere if the group wins an order to manufacture Rafale fighters in India in the future.

A third of the offset value has been reserved for the state-run Defence Research and Development Organisation (DRDO), whose team is scheduled to travel to France soon in part to solicit help in reviving the indigenous Kaveri jet engine project. India is also thought to be interested in acquiring French expertise in low observability technology which would make Indian make military aircraft and warships tougher to detect.

Sources also point out that in government-to-government deals, the precise value of each item being negotiated may not individually be stated. According to Defence Analyst Commodore Uday Bhaskar, "In any government to government deal where there is a platform thats being negotiated with a commitment for life time spares support, there would be a costing under different heads but the disaggregated detail may not always be shared." Air Marshal (retd.) BK Pandey, a former Air Officer Commanding of the IAF's Training Command says, "Its practically not possible to address every detail of every component in the deal. This is because the value of components is bound to change over the life cycle of an aircraft."

https://www.ndtv.com/india-news/why...being-shared-1779270?pfrom=home-lateststories

 

[proud_indian]

An Examination of the Rafale Case: The Old Non-Deal and the New Deal
November 18, 2017

Earlier this week, questions were raised about the Rafale deal signed between India and France in September 2016. The allegations made went to the extent of issuing warnings about “a huge scam” in the deal and that the earlier 2012 proposal for an aircraft deal with Dassault Aviation (which manufactures the Rafale) was better and cheaper although that was never sealed.

We checked the facts of the case, and in the process also made a comparison between the two deals – the one that was never cleared by the previous administration and the new one signed last year by the current administration. Below are our findings:

KEY TAKEAWAYS

• Acquisition of 36 Rafale is meant to address the IAF’s operational preparedness
• Price of old deal did not include cost of weapons, equipment, tools, documentation, training & logistics. Adding these, the old deal’s cost goes up further
• Total value of new deal includes cost of platform, infra support, supplies, India-specific changes, additional weapons package, logistics support
• Under the old deal, India would have ended up paying more – for underdeveloped aircraft – and kept on paying more as per the vagaries of the European market
• Dassault agreed to make India-specific modifications to Rafale under the new deal
• Additions to Rafale and further concessions from Dassault and France have qualitatively changed the deal
• Units are fundamentally different in qualitative terms
• Under the new deal, Dassault will have to ensure that at any one point of time, 75% of the Rafale fleet is operational

MAIN TAKEAWAY
If there was a deal in 2012, why did India not get the aircraft? The answer is that there was no deal and thus quoting the price of the old “deal” itself and then comparing it is logically fallacious. The deal was on the verge of cancellation and the last administration’s prolonged delay led costs to shoot up. The current administration revived the deal and addressed a critical shortfall in the operational readiness of the IAF.

Moreover, the deal has been completely customised by Dassault now. If we use the analogy of buying a car, this is what happened: The price being quoted for the old proposal is of a base car unit, the skeleton, without modifications or additions. What we are getting now is a complete car, with all necessary equipment and tools added. The old proposal’s costs did not include anything like equipment, weapons, support & supplies, etc. Adding these, the price of the “old deal” would be nowhere near what has been quoted recently.

Therefore, the deliverables between the old proposal and the new deal are qualitatively very different. (In our study, we have mapped out the approximate costs under the new deal above and the reader can see how it all adds up.)

A Brief History of the Rafale Deal

• Observing the Indian Air Force’s critical need for fighters, the proposal to procure 126 aircraft first came up in 2000.
• Therefore, the idea did not originate in the 10 years of the previous administration. In fact, it is the same administration which could not take a decision.
• The lowest vendor was decided only in 2012, after the Dassault Rafale won the competitive bid. Yet, over the next two years of the negotiations stalled and could not be completed.
• By the time the change of guard happened at the Centre in 2014, the IAF’s squadron shortfall had already created a critical situation in its operational requirements. It was against this backdrop that the decision was taken to purchase at least 36 aircraft in flyaway condition.
• The purchase of the 36 aircraft was decided during the summit between Prime Minister Narendra Modi and then French President Francois Hollande in Paris in April 2015.
• Thereafter, India did not sign the deal as it stood in January 2016 because it did not agree with the price of €8.6bn.
• The inter-governmental agreement was finally signed on September 23, 2016, in the presence of the then defence ministers of India and France.
• India had also announced that if it were to order additional Rafale aircraft after the outright purchase of 36 fighters, it would thereafter go for government-to-government deals.

We also fact-checked some of the remaining critical claims that have been made against the Rafale deal signed last year.

Claim: New Rafale deal does not include transfer of technology (ToT) unlike the earlier proposal.

Fact: The new deal on 36 aircraft in flyaway condition does not include ToT. The reason for that is economic. Spread across 126 units, ToT costs would make less of an impact than the same on a base of 36 aircraft. Instead, what is being done now is the consolidation of the Strategic Partnership (SP) model, which goes way beyond ToT and is a much more holistic approach. In the near future, this is expected to enable a strengthened defence manufacturing process through “Make in India” with seamless sharing of technology and more.

Claim: The PM’s decision to buy 36 Rafale was “unilateral” and bypassed the Defence Procurement Procedure.

Fact: The decision was unilateral. Apart from the Joint Statement, the Inter-Governmental Agreement (IGA) was issued. Thereafter, the IGA was signed after approval from the Cabinet Committee on Security (CCS).

Claim: The interests of “one industrial group” or Reliance Defence Limited was promoted, since Reliance tied up with Dassault in October 2016 for a joint venture.

Fact: Private players have come into India’s defence production and how two firms choose to work with each other, or not, whether they engage in a tie-up, is entirely a matter between the two parties involved. The Indian government was not involved in this process. More importantly, the acquisition of the 36 Rafale aircraft did not involve any private player. It is completely an agreement between two governments.


We know that despite Dassault winning the tender in 2012, the previous administration could not complete the deal, nor even successfully renegotiate it. It was after the change of administration that we saw a fresh impetus being given to the stalled project. In a significant difference, the new government began direct talks with the French government. What emerged from the inter-governmental negotiations was a new deal which, too, India did not sign till further tuning and alterations were made to its satisfaction.

When the deal was signed in September last year, we saw a deal very different from the original MMRCA deal. As listed above, the additions to the Rafale and the further concessions from Dassault Aviation and France have qualitatively changed the deal significantly. Factors like the unit price as in the previous deal and current deal simply cannot be compared because the units are fundamentally different in qualitative terms.

And yet, when compared, we find that the picture works out to the advantage of the new deal in each case and overall. In fact, it is under the old deal of the last government that India would have ended up paying more – for underdeveloped aircraft – and kept on paying more as per the vagaries of the European market!

India had a squadron strength of 42 in 2000 – the full authorised strength. Subsequently, little happened in terms of procurement and the armed forces, the IAF included, ended up with shortages. The acquisition of 36 Rafale is meant to address that fundamental question of the IAF’s operational preparedness. Having wasted several years even in securing the Rafale deal, there did not appear to be any time left for further delay.

http://thetruepicture.in/rafale-case-old-non-deal-new-deal/

 

[rajiv sharma]

The fly away cost for a single Rafale airframe is $85 Million (according to official french documents)
So for 36 Rafales = 36 x 85 = $3.06 Billion

IAF is getting two types of air to air missiles as well as two types of air to ground missiles.
So the weapons package per Rafale costs around $25 million (average) = 36 x 25 = $900 Million

Setting up of two bases and maintenance depots costs $1.2 Billion

The deal said that it would cover 10 years of maintenance and spares. The total LCC is calculated for 40 years
and it comes to around 2.5 times the price of air frames (average).
Hence, for 10 years = 2.5 x 3.06 / 4 = $1.92 Billion ($53.4 Million per Rafale)

So far, the total adds upto $7.08 Billion.
The remaining 8.8 - 7.08 = $1.72 Billion is for ToT and covers the 50% offsets
(that means, 8.8 / 2 = $4.4 Billion will be re-invested back in India)

Quoting $245 Million/ Rafale is just plain stupid. What people don't understand is that
if India goes for remaining 90 Rafales for MMRCA, we'll have to pay only for the air frames,
weapon and maintenance, since the two bases being set-up can handle three squadrons each without major expenditure.

That is 90 * ( 85 + 25 + 53.4 ) = $14.7 Billion excluding another $500 Million for upgradation of the bases.
(again with 50% offsets)

So the total cost for 126 Rafales will be $24 Billion (pretty close to the $20 Billion quoted in the original
MMRCA deal adjusting for inflation and ToT)

 

[duhastmish]

how come tuekey bought 120 f35 for 16 bil.
wasnt that a better deal?
having understanding with usa means india could have procured these f35 easily. with bigger range of weapons.
also a closer tie with west.

 

[faithfulguy]

how come tuekey bought 120 f35 for 16 bil.
wasnt that a better deal?
having understanding with usa means india could have procured these f35 easily. with bigger range of weapons.
also a closer tie with west.

Now you are talking. India should think big. Compare to F-35, Rafael is obsolete. Why pay that much if Indian can wait in line for F-35. But of course, there would be zero TOT.

The only realistic alternative to F-35 is J-31 or J-20 as PAKFA is dead.

 

[duhastmish]

Now you are talking. India should think big. Compare to F-35, Rafael is obsolete. Why pay that much if Indian can wait in line for F-35. But of course, there would be zero TOT.

The only realistic alternative to F-35 is J-31 or J-20 as PAKFA is dead.

We already have zero tot. France not giving anything.

But Americans India get wider range of weapon and singular country to deal with. We can also get tot on some other deal say f16 aesa radar.

Pakfa is not dead it’s murderd by our official. We had one chance to be in race with rest. We just ruined it. As for china deal seems impossible because of geo politics.

 

[Sully3]

corruption is rife in Indian armed forces when it comes to buying foreign military hardware, the russians have been bribing these Indian officers for decades.

Indian tax payers getting taken for ride by the army who spending and corruption is uncontrollable especially as the India is not at war with any one.

 

[ashok321]

corruption is rife in Indian armed forces when it comes to buying foreign military hardware, the russians have been bribing these Indian officers for decades.

Indian tax payers getting taken for ride by the army who spending and corruption is uncontrollable especially as the India is not at war with any one.

Correct!

More corruption under Modi.
But all swept under the carpet.

 

[duhastmish]

corruption is rife in Indian armed forces when it comes to buying foreign military hardware, the russians have been bribing these Indian officers for decades.

Indian tax payers getting taken for ride by the army who spending and corruption is uncontrollable especially as the India is not at war with any one.

India can’t afford to let things go.
We are already in war with Pakistan and it’s only going to get messy. There will be a wAr sooner or later. Just that we need to be prepared for anytime.

 

[Sully3]

India can’t afford to let things go.
We are already in war with Pakistan and it’s only going to get messy. There will be a wAr sooner or later. Just that we need to be prepared for anytime.

not a single Pakistani thinks we are at war with India. Yes we are cleaning up RAWs dirty work on our western borders but not at direct war with India.

You guys will be shocked when war comes to your door front, this isn't war.

 

[duhastmish]

not a single Pakistani thinks we are at war with India. Yes we are cleaning up RAWs dirty work on our western borders but not at direct war with India.

You guys will be shocked when war comes to your door front, this isn't war.

No we won’t be. We are prepared for your joke of a system.

Yes you will be shocked and you must be unwise to think that India will not attack you guys for the problem you created. Modi was made just to have war. May be him or not him but war is on horizon. Result or loss means nothing if we achieve a end to tricks from other side.

 

[Dash]

how come tuekey bought 120 f35 for 16 bil.
wasnt that a better deal?
having understanding with usa means india could have procured these f35 easily. with bigger range of weapons.
also a closer tie with west.

A single F 35 costs $95 million and Turkey is a level 4 partner with only ~$200 millions contribution and they got it by 16 billion?

corruption is rife in Indian armed forces when it comes to buying foreign military hardware, the russians have been bribing these Indian officers for decades.

Indian tax payers getting taken for ride by the army who spending and corruption is uncontrollable especially as the India is not at war with any one.

I am a taxpayer but I’m not worried who is you uninvited guest? To come and comment here?

 

[faithfulguy]

We already have zero tot. France not giving anything.

But Americans India get wider range of weapon and singular country to deal with. We can also get tot on some other deal say f16 aesa radar.

Pakfa is not dead it’s murderd by our official. We had one chance to be in race with rest. We just ruined it. As for china deal seems impossible because of geo politics.

So what is the difference between being dead vs murdered. Ain't you dead when you are murdered.

In any case, India should wait in line for F-35 if it wants stealth jet. Don't tell me India is going to build AMCA by itself. That is delusional. Even with PAKFA tech transfer, building AMCA is a big hurdle. Without it, India AMCA is self terminated.

 

[ashok321]

Government Said It Would Share Rafale Price Details. It Can't

Defence Minister Nirmala Sitharaman promised to share the financial break-up of the 58,000-crore or $8.7 billion deal

As MOD, did not she (Nirmala Sitharaman) know that its government to government contract whose details can not be released as per the confidentiality clause?

So why she promised?
Just to hoodwink public, she lied.

 

[ashok321]

https://twitter.com/x/status/933891542078537728