Supreme Court on Rafale: Questions the Government may have to answer

Written by October 13, 2018 09:00

New Delhi: The Supreme Court has asked the Centre to clarify what process was followed when the NDA government decided to buy 36 Rafale jets. However, in a relief to NDA government, the apex court has refused to examine the contentious issue of the price of French-made Rafale fighters. The court sought information from the Centre by October 29. So let us understand the process of acquiring any military hardware in India.

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Rafale Jet

The procedure

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Ministry of Defence examines the requirements of certain systems or platforms needed and proposed by defence personnel. The highest decision-making body on the acquisition of hardware is Defence Acquisition Council (DAC) which is headed by the Defence Minister.

The DAC is at liberty to accept or reject the proposal. If the proposal is accepted the DAC gives– Acceptance of Necessity (AoN). An AoN is the first stage to procurement and after this, a formal tender –either global or limited tender – follows.

Following this, the response of equipment manufacturer is evaluated technically and is followed by a field trails leading to a process of elimination or “downlisting”. For instance, in the present case of Medium of Multi-Role Combat Aircraft. The French-made Rafale and Euro-Fighter passed the elimination test. The other aircraft like Russia made Su-35, F-16, and even the F-18 didn’t qualify. Some of these fighters, for instance, failed to take-off when tested in high-altitude bases like Leh in Ladakh and were hence out of the competition.

After this “Commercial Negotiations” follow the process of short-listing of the platforms. The price negotiation committee bargain with the equipment manufacturer to agree to a minimum possible price. To do this a bench-marking price is accepted. And, in this case, the joint secretary (Air) thought that benchmark price worked by Modi Government for the purchase was too high. The note dissenting on the purchase was put on record.

After a final price is worked out, the issue is placed before the Cabinet Committee on Security (CCS), headed by the Prime Minister. The CCS comprises the Defence, Foreign and Home Minister’s puts the final seal of approval. Before the CCS clears an acquisition the Ministry of Finance examines to ensure whether the purchase will be made from the annual capital budget of the MoD or additional funds needs to made and importantly whether the Government can spare.

Some of the questions which are being taken by opposition and media are analyzed below.

1) What was the process that determined the number to be 36?

The Ministry of Defence in a press release in February this year, stated, the deal secured by the Government is better in terms of capability, price, equipment, delivery, maintenance, training, etc., than that notionally negotiated by UPA, which it could not conclude in ten years.  Moreover, the present Government completed these negotiations in just about one year.”

It is also stressed once again that the procurement of 36 Rafale aircraft through an Inter-Governmental Agreement (IGA) with France to meet the urgent need of the IAF is strictly in accordance with the Defence Procurement Procedure in all aspects including mandating, conducting and monitoring of negotiations and seeking all necessary approvals, including that of the Cabinet Committee on Security, before entering into the IGA.  The aircraft had already been evaluated successfully by IAF during 2009-10.

But the question remains why 36? How was the figure arrived at and the procedure that followed to determine it? Will the Supreme Court look into this?

2) The role of Joint Secretary who objected to NDA’s Rafale deal

Defence minister reviews security for amarnath yatra

Congress leader S Jaipal Reddy claimed that Joint Secretary Rajeev Verma had objected to the deal made by PM Narendra Modi because the price decided by the UPA government was lesser than the NDA’s deal, and Eurofighter had offered to supply the same kind of aircraft at 20 percent cheaper rate.

Defence minister Nirmala Sitharaman had earlier said that all opinions during negotiations, even dissenting ones, are recorded but then “a collective decision” is taken before sending it to the Cabinet for approval.

“The note which went to the CCS in August 2016 on the Rafale deal had the joint secretary’s signature. With prior approval, he then went on a pre-decided short duration training course abroad,” said Sitharaman, rejecting reports the officer had gone on leave in protest or was forced to do so.

Verma’s objections did, however, lead to some delay in the CCS approving the Rafale deal till his objections were “overruled” by his superior, the then director general (acquisitions) Smita Nagaraj, with then defence minister Manohar Parrikar’s concurrence.

“The joint secretary did sign the note considered and approved by the CCS on August 24, 2016,” said an official. Verma then proceeded for a one-week training programme abroad in September for which he had applied to the department of personnel and training in July 2016.

A Defence personnel states, “Government decisions are typically taken through a collegiate process involving due deliberations and diligence at various levels. The collegiate process allows for opinions to be freely expressed, recorded, discussed and, if necessary, modified.” Government officials like the Defence Secretary do have the power to overrule.

Will the court look into what was the content of the objection? It would help to set at rest media speculation.

3) What could be the possible questions left for the Supreme Court given that there would none about pricing or the quality of the aircraft?

Congress has alleged that the government has caused loss to the public exchequer worth Rs 41,205 crore in the purchase of 36 Rafale aircraft, ‘off the shelf’ without ‘Transfer of Technology’. The Supreme Court can suggest a probe by Joint Parliamentary Committee (JPC) or a CAG audit.

The Comptroller and Auditor General of India can audit the government’s procurement of 36 Rafale fighter jets, but only after the deal is fully executed and the payments are completed.

If, however, the Court is satisfied with the procedure followed, the Court may endorse the fact that proper procedures were followed.