Congress Alleges “Huge Scam” in Rafale Aircraft Deal by Modi Govt
Representational image of a Rafale aircraft.
Representational image of a Rafale aircraft.(Photo: Reuters)

Congress Alleges “Huge Scam” in Rafale Aircraft Deal by Modi Govt

Accusing the Modi government of "promoting the interests of Prime Minister's crony capitalist friends," Congress on Tuesday alleged a huge scam in the 126 Medium Multi-Role Combat Aircraft deal negotiated with French company Dassault Aviation Rafale.

Addressing a press conference on Tuesday, Congress spokesperson Randeep Surjewala alleged that “a huge scam is brewing.”

Also Read: Tejas, Rafale Rule the Sky on Inaugural Day of Aero India 2017

The UPA government, he said, had in 2007 invited tenders for 126 Medium Multi-Role Combat Aircraft.

A deal was struck with Dassault Aviation in 2012. Dassault Aviation was to provide 18 aircraft, and Indian Public Sector Undertaking (PSU), Hindustan Aeronautics Limited (HAL) was to make 108.

On 13 March 2014, Dassaullt Aviation and HAL got into a work-share agreement. According to this agreement, the French company was to provide 30 percent assistance for the 108 aircrafts in HAL’s kitty, while HAL took care of the remaining 70 percent in manufacturing those 108.

The base price for buying the 126 aircraft was to be $10.2 billion.

However, post election, the Modi government pursued a different course of action.

Also Read: High Time That the BJP Stopped Claiming Credit for the Rafale Deal

The Different Course

On 10 April 2015, PM Narendra Modi visits France and announces the deal for the purchase of 36 Rafale fighter aircraft in flyaway condition.
Congress spokesperson Randeep Surjewala

This was done without following proper Defence Procurement Protocol, alleged Surjewala. He also said that there was no inter-governmental agreement, and India's Defence Minister was not present at the announcement either. Reliance Defence Limited's owner Anil Ambani was, however, in France during the Modi's visit, Surjewala said.

According to the Congress, on 30 July 2016, the UPA-initiated Rafale aircraft deal was cancelled. On 23 September 2016, the Modi government signed the $8.7 billion deal with Dassault, the same company, for 36 aircraft.

Only about a week later, on 3 October 2016, Reliance Defence Limited too entered into a joint venture with Dassault aviation.

Also Read: Rafale Deal: Reliance Signs Joint Venture With Dassault Aviation

Why Purchase Aircrafts at a Higher Price?

The Congress spokesperson directed a tirade of questions at the Modi government, pointing out that the government "bypassed" the interests of the Indian PSU, HAL.

His first question was:

Why did the Modi government buy the 36 aircraft at a price much higher than the one UPA had negotiated?

Surjewala claimed that the UPA government had negotiated to buy 126 aircraft at a base price of $10.2 billion – whereas the Modi government negotiated just 36 aircraft for $8.2 billion.

Does this not mean that had the Modi government bought 126 aircraft, the price would have been $30.45 billion, which would be about 20 billion more than the UPA price?

He urged the government to correct him if the numbers quoted by him were wrong.

If these prices are wrong, then I request the government to share what the correct prices are. This will help ease the suspicion among people that losses are being inflicted on the public exchequer.

The Congress also asked if proper procedure had been followed prior to the implementation of the joint venture between Dassault Aviation and Reliance Defence Limited's subsidiary, Reliance Aerospace and Defence Limited, calling it "the biggest defence production deal."

BJP Hits Back

The BJP rubbished the allegation, claiming it was intended to "divert attention" as the party bigwigs faced the prospect of being questioned in the AgustaWestland VVIP chopper scandal.

The BJP spokesman GVL Narasimha Rao claimed that the Congress party was engaging in a "stunt" by raising the Rafale issue as it was scared at the prospect of its top leadership, including the Gandhis, being questioned in the VVIP chopper scam.

He said after the arrest of middleman Carlos Gerosa in Italy last month and his likely extradition to India soon, "the Congress has made baseless allegations over Rafale deal to divert public attention and to cry political vendetta".

None of these stunts will work and the Congress must be ready to answer who took bribes in the AgustaWestland VVIP chopper deal as the money trail is going to become known after the extradition of Carlos Gerosa. Modi government is known for integrity and all its actions are above board, while the Congress party is synonymous with sleaze, corruption and crony capitalism.

“Baseless and Unfounded,” Says Reliance

In a statement, Reliance Defence Limited dubbed the allegations made against it by the Congress as "baseless and unfounded".

Reliance Defence said its subsidiary, Reliance Aerostructure and Dassault Aviation formed a joint venture – Dassault Reliance Aerospace, after a bilateral agreement between two private companies and "the Indian government has no role to play in this."

Reliance Defence claimed that government policy of 24 June 2016 allows for 49 percent FDI in the defence sector under the automatic route, without any prior approval.

"No approvals from the Union Cabinet or CCS were required for the formation of the aforesaid joint venture company under the automatic route," it said, brushing aside the Congress' charge that prime minister Modi promoted interests of a group.

(With inputs from PTI.)

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