Congress, BJP trade charges over defence deals

Congress was nervous after the arrest of Carle Gerosa, a middleman in the AgustaWestland deal, in Italy, says BJP spokesperson

The Congress party on Tuesday alleged that "a huge scam was brewing" in the procurement of the Dassault Rafale fighter jets for the Indian Air Force.

The Bharatiya Janata Party (BJP) dismissed the allegations. It said the Congress party was scared at the prospect of its top leaders being questioned in the AgustaWestland helicopter "bribery scandal" soon and have raked up the Rafale deal as a "smokescreen".

Congress spokesperson Randeep Singh Surjewala said the arms deal to purchase 36 Rafale fighter aircraft from French aircraft manufacturer Dassault is set to cause "insurmountable loss to the public exchequer". He said the arms deal smacked of "non-transparency and flagrant violation of mandatory provisions of the 'Defence Procurement Procedure.'

The Congress leader demanded the Centre to break its "conspiratorial silence" and clarify the "grave apprehensions" on the deal. He said the Centre renegotiated the deal in 2015, originally signed by the UPA-2 government, and sacrificed national interest on 'transfer of technology' from Dassault to public sector undertaking Hindustan Aeronautics Limited (HAL).

BJP spokesperson GVL Narasimha Rao said the Congress was nervous after the arrest of Carle Gerosa, a middleman in the AgustaWestland deal, in Italy and his likely extradition to India soon. "The Congress party has made baseless allegations on the Rafale deal to divert public attention and to cry political vendetta. But these stunts will not work and they should be ready to answer questions on the AgustaWestland deal now that the money trail is going to get known," Rao said.

Surjewala alleged the "Modi government has blatantly promoted financial interests of its crony capitalist friends" by making a private sector company the joint venture partner with Dassault Aviation instead of HAL.

The Congress leader said the Modi government renegotiated the deal at a highly inflated price. The Congress leader asked whether it was correct that each Rafale aircraft, according to the UPA agreement, comes to $80.95 million (Rs 526.1 crore) as against Modi governments per aircraft negotiated price of $241.66 million (Rs 1570.8 crore) as per the current exchange rate. "Who is responsible for the loss to the exchequer," Surjewala asked.

He said the PM took a "unilateral" decision on buying the 36 Rafale fighter jets during his visit to France in April 2015. Surjewala said the Modi government sacrificed the interests of the HAL to have Dassault Aviation and Reliance Defence Limited enter into a joint venture. "Why is it that the deal did not go through the proper procedure for approval by the Union Cabinet, Cabinet Committee on Security and Foreign Investment Promotion Board?" Surjewala asked.

In 2007, the Congress-led UPA-1 had floated a tender for purchase of 126 'Medium Multi-Role Combat Aircrafts' (MMRCA) for the IAF. Two fighter jets were shortlisted, the Rafale and Eurofighter Typhoon. In December 2012, the Rafale was finalised with a base price of $10.2 billion.

Of the 126, 18 Aircrafts were to come in 'flyaway' condition and the remaining 108 were to be manufactured by the HAL with the transfer of technology by Dassault. In addition, Dassault was to invest 50 per cent of the sale price by way of investment in India. According to a work share agreement signed between HAL and Dassault in March 2014, 70 per cent work of 108 jets was to be done by HAL and rest by Dassault.

Surjewala said the PM announced the deal for purchase of 36 Rafale jets in flyaway condition during his visit to France in April 2015. He alleged this was done without following the Defence Procurement Procedure, without inter-governmental agreement and in the absence of India's Defence Minister.

Amid charges of wrongdoing being exchanged by the ruling party and the Opposition, Anil Ambani-controlled Reliance Defence issued a statement to blunt any insinuation that the company might have had a role. Reliance Defence questioned the facts in the Congress party's press statement. On suggestions that Reliance Defence owner Anil Ambani was present in France with the PM during his April 2015 visit, the company clarified that Ambani is a member of the Indo-French CEO Forum. It said more than 20 Indian CEOs were present at the meeting. The company also disputed the claims that Reliance Defence would be undetaking offset obligations of Rs 30,000 crore with Dassault Aviation for the 36 fighter jets. The joint venture between Reliance Aerostructure and Dassault Aviation, it said, is a bilateral agreement between two private companies, and the Indian government has no role to play in this.

This report has been updated to include a statement by Reliance Defence Ltd