Creating and disseminating false narratives for the sake of according false fame/glorification has become a fashionable pastime for some ‘desi patrakaars’, with this being the latest instance:
Manohar Parrikar’s biggest contribution was to break the Rafale logjam. For six years, India had been unable to decide on how to buy the French-made combat jets because of the faulty procedure adopted by the MoD under the then Defence Minister A K Antony. It is to Parrikar’s credit that he decided to think differently on a knotty issue and suggested a way out to the Prime Minister. It was Parrikar’s sharp insights into finance and international systems that stood out when India—at his suggestion—decided to procure the Rafales from France. However, certain aspects related to licenced-manufacture of 108 aircraft in India with HAL as the lead production agency (LPA) could not be finalised. Major differences occurred on the aspect of man-hours that would be required to produce the aircraft from kits in India, and who would take the responsibility for the entire lot of 126 aircraft. While Dassault Aviation maintained that 31 million man-hours that it had proposed should be sufficient to licence-build 108 Rafales in India, HAL was asking for a mark-up of these man-hours by 2.7 times. This point became the bone of contention between the government and the French manufacturer. Moreover, in the understanding of the MoD, the company that had emerged as the winner in the bid— Dassault Aviation—would have to sign a single contract with the Indian government. The French company would then need to have back-to-back contract(s) with HAL and other Indian production agencies. Dassault Aviation would also be responsible for the delivery of the entire fleet of 126 aircraft to IAF. The single point responsibility for this contract rested with Dassault Aviation because the RFP (Request for Proposal) was issued to them. However, Dassault Aviation did not fulfil the commitment given in the first meeting and an impasse ensued on the responsibility of delivery of 108 aircraft to be manufactured in India. Another hurdle came up on the point of work share of HAL. Dassault Aviation was asked to submit a ‘responsibility matrix’, clearly defining the role and responsibility of Dassault Aviation and HAL. The matrix was to facilitate a back-to- back contract of Dassault Aviation with HAL. The CNC was, however, not able to move the negotiations forward since the interpretation of two fundamental aspects of the case by the French company was not in line with the terms of the original terms in the tender. The first aspect related to treating Dassault Aviation as the ‘seller’ of 126 aircraft, including 108 to be manufactured in India and the corresponding contractual obligations and liabilities. The second point was about the man-hours for the aircraft to be manufactured in India. The UPA government, under the overly cautious A K Antony, instead of imposing a deadline for the French manufacturer to comply with the terms of the RFP, dragged its feet and allowed Dassault Aviation to get away with obfuscation. On November 10, 2014, meanwhile, Parrikar took over as Defence Minister. While being briefed about the major pending projects and contracts, he realised that the MMRCA contract wasn’t going anywhere. He still wanted to give the French sufficient time to comply with the terms of the tender. In December 2014, the French Defence Minister came visiting and as expected, raised the issue of conclusion of contract negotiations in the MMRCA case with Parrikar who told him that conclusion of the contract was held up on account of the vendor not confirming compliance to the terms of the RFP. This was followed up by a formal letter from Parrikar to the French Defence Minister stating that it would be really useful for Dassault Aviation to confirm compliance to the terms of the RFP and the terms of the bid submitted by them at the earliest. It was further mentioned in the letter that the negotiations could be carried forward and concluded thereafter if Dassault Aviation could be asked to depute a fully empowered representative to discuss non-stop with the CNC. Another discussion with the delegation of Dassault Aviation was held on February 12, 2015. A clarification was sought from Dassault Aviation towards confirmation of compliance to the terms of the RFP and terms of the bid submitted by them specifically. The two crucial points, i.e. (i) the consolidated man-hours based on which Dassault Aviation had been declared L–1 would be the same man hours required for licence-manufacturing the 108 Rafales in India, and (ii) Dassault Aviation as the seller under the contract for 126 aircraft for the IAF would undertake necessary contractual obligations as per the RFP requirements. The representatives of Dassault Aviation reiterated their stand on both issues and stated that while Dassault Aviation would be responsible only for delivery of 18 aircraft in a flyaway condition, they would not take ownership for the 108 aircraft to be manufactured by HAL as the LPA. On the issue regarding man-hours, the Dassault Aviation representative stated that the company’s stand had always been consistent that the man-hours indicated in their proposal correspond to the related tasks performed in French industrial condition. He also mentioned that only HAL being the LPA could talk about the factor of multiplication to be applied to these man-hours to convert the same to the man hours-required for the licenced- production of 108 aircraft in India. Clearly, Dassault Aviation was using the loophole in the original terms of the tender to get away with shirking its responsibility towards the quality of the 108 Rafales to be manufactured in India. Exasperated at the obduracy shown by the French company, the MoD issued an ultimatum on March 20, 2015 asking it to fulfill the commitment and confirmation on the two aspects mentioned above, ‘failing which the MoD may be constrained to withdraw the RFP issued’. However, Dassault Aviation, in its response dated March 24, 2015, did not commit on the two aspects mentioned above. Instead, the French company stated that the estimate of consolidated man-hours given by them was to be used by HAL to prepare its own quotation with respect to the completion of its (HAL’s) tasks under the MMRCA. The MoD realised that applying a factor of 2.7 on the man-hours quoted by both Dassault Aviation and Eurofighter GmbH (the company that quoted the second lowest price), the Total Cost of Acquisition (TCA), as on November 2011, would undergo a material change to the extent that Dassault Aviation would have no longer remained L–1 vendor and would have become L–2 vendor. Parrikar realised that another prolonged competition would have taken enormous time and effort. So he took the matter to the Prime Minister and briefed him about the necessity of procuring the selected MMRCA. Under the circumstances, there was no alternative but to withdraw the original tender, Parrikar told Modi since the Central Vigilance Commission (CVC) guidelines provided that negotiations could not be held with the competitor who had come second in the competition (L–2 vendor in officialese). The only way, the Defence Minister suggested, was to scrap the tender and buy a minimum number of Rafales off-the-shelf to fill a critical gap in the IAF’s inventory. The Prime Minister agreed and decided to talk to the French President about such a possibility during his upcoming visit to Paris in April 2015. The Cabinet Committee on Security also gave its approval to the new proposal before Modi left for Paris, on April 9, 2015. Eventually, Prime Minister Modi announced in Paris that India would purchase 36 Rafales off-the-shelf.
A deliberate attempt has been made through the above-quoted narrative to portray the foreign OEMs as being guilty of obfuscation and obduracy, while the Indians tend to, as expected, emerge as the undisputed ‘Vishwagurus’. But the reality is the exact opposite. Now, here are the facts/realities that emerge when a key question is asked:
1) Why was HAL asking for a mark-up of the industrial man-hours by 2.7 times (83.7 million as opposed to the 31 million man-hours quoted by Dassault Aviation)? The common-sensical answer is that HAL would have taken close to 15 years to attain the mandated skills proficiency of its skilled human resources in case of licence-building the 108 fourth-generation Rafales, and that too after sending almost 200 of its supervisory and technical staff to France for being type-certified over a period of 18 months. All this in turn would have greatly stretched the production-rate of HAL-built Rafales—which is exactly what has transpired with regard to mastering the industrial processes and protocols required for building fourth-generation MRCAs like the Tejas Mk.1 and Mk.1A variants.
2) Consequently, what emerges from this is that licence-building any fourth-generation MRCA (leave alone fifth-generation MRCAs) was a no-brainer from the outset and therefore this option should have been discarded back in 2007 itself. In fact, no country in the world that has procured fourth-generation or fifth-generation MRCAs (be it the Rafale, the EF-2000 Typhoon or the F-35 JSF) to date has insisting on licence-producing them. Hence, in India’s case, the only practical procurement option was the off-the-shelf acquisition of Rafales from Dassault Aviation.
3) The off-the-shelf procurement option also becomes imperative if the end-user (Indian Air Force) insists on guaranteed serviceability and performance-based logistics support of/for the Rafale fleet from Dassault Aviation. For instance, in the case of the IAF’s procurement of Su-30MKI H-MRCAs, their licenced-production by HAL saw to it that that the Russia-based OEM (IRKUT Corp) accepted product liability for only the first 50 Su-30MKIs that were delivered off-the-shelf by the OEM. For the rest, Russia was under no obligation to extend any support (like crash investigations) in the event of a HAL-built Su-30MKI being lost under catastrophic circumstances. This has since resulted in enormous handicaps for the Indian Air Force since Russia was never required to share the source-codes of its two key operating software packages—GOST R 52070–2003, the Russian equivalent of MIL-STD-1553B digital databus; and the GOST R 58247-2018, equivalent of the MIL-STD-1760A electrical systems interface database. Consequently, if any enhancements of the Su-30MKI’s mission avionics suite is required to be carried out by the IAF, then such work will have to be carried out by Russia’s Zhukovsky-based FSUE State Scientific Research Institute of Aviation Systems (GosNIIAS) as the systems integrator, and by the Zhukovsky-based JSC V V Tikhomirov Scientific Research Institute of Instrument Design NIIP, the OEM for the RLSU-30MK NO-11M Bars PESA-MMR.
4) The reasons why licence-producing the Rafales was a no-brainer from the outset also becomes evident to anyone applying sound common-sense to understand why the much-touted plans for HAL licence-producing the fifth-generation Prospective Multi-Role Fighter (PMF) variant of the Sukhoi Su-57 never took off. While it was agreed in early 2007 by Russia and India to jointly study and develop the PMF, Russia on August 8, 2007 had already proclaimed that the R & D programme’s development stage was complete and later in 2009, the Su-57’s design was officially approved (meaning FROZEN, with no further deep iterations). Despite this, in September 2010, India and Russia agreed on a preliminary co-design contract and in December 2010, a Memorandum of Understanding (the MoU) for the preliminary design of the PMF was inked by HAL, Rosoboronexport State Corp and United Aircraft Corp JSC. Under this MoU, the PMF was to have incorporated of 43 modifications of the Su-57’s design. HAL negotiated a 25% design and development workshare The IAF was to procure 166 single-seat and 48 twin-seat PMFs. But in May 2012, India’s Ministry of Defence (MoD) announced a two-year delay in the project and by October 2012, India had cut the total purchase size from 214 to 144 PMFs. India's initial investment had by then grown from the estimated $5 billion to $6 billion, and the estimated total programme cost had grown to $30 billion. So, despite India contributing 15% of the R & D work, India was faced with bearing half the cost of the R & D effort. In September 2016, the two countries announced a detailed work-share agreement for joint production. In May 2017, another announcement came out regarding a ‘milestone’ agreement to finalise the PMF’s detailed design, but by June that year, Russia was insisting that HAL forego the PMF’s entire licenced-production effort in order to ensure speedier deliveries (within 36 months after contract signature, instead of the earlier agreed-upon 92 months). In addition, just like in the Su-30MKI’s case, Russia refused to share the source-codes for any of the PMF’s on-board operating software. Consequently, the Indian Air Force on September 2, 2017 officially declared its reluctance to proceed any further with the PMF project, and by February 2018 the PMF project was given a quiet and permanent burial.
Conclusion: One does not need to be an IIT Graduate or a ‘Vishwaguru’ to figure out common-sensical outcomes and end-states. Instead, making decisions by cultivating respect for the laws of physics and mathematics produces far more cost-effective and value-added outcomes. But Alas! This was not to be yet again between 2012 and 2018 as the late Shri Parrikar and his fellow colleagues in the then Union Cabinet embarked upon yet another futile exercise, i.e. undertaking to expose/unmask the still elusive RAAZDAARS (custodians of secrets) who could spill the beans about the alleged scam involving the procurement of 12 AgustaWestland AW-101 VVIP transportation helicopters for the Indian Air Force.
