Hollande’s remarks stir fresh Rafale tug of war

The defence ministry said neither the Indian nor the French government had any say in the commercial decision.
A Rafale fighter aircraft during AERO INDIA 2017 at Yelahanka Air base in Bengaluru.(PTI File Photo)
A Rafale fighter aircraft during AERO INDIA 2017 at Yelahanka Air base in Bengaluru.(PTI File Photo)
Updated on Sep 22, 2018 01:28 AM IST
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Hindustan Times, New Delhi | By

A report in a French media outlet quoting former President Francois Hollande as saying that the Indian government proposed the name of Anil Ambani’s Reliance Group as Dassault Aviation’s offset partner intensified the storm surrounding the multi-billion dollar Rafale deal on Friday. The defence ministry said neither the Indian nor the French government were involved in the commercial decision.

“We had no say in this regard. The Indian government proposed this service group (Reliance Defence), and Dassault Aviation negotiated with (Anil) Ambani. We did not have a choice, we took the interlocutor who was given to us,” French website Mediapart quoted Hollande as saying.

Hollande’s comments contradict the government’s long-held position that it had nothing to do with Rafale-maker Dassault Aviation selecting Reliance Defence as one of the companies that would implement its offset obligations in the Rafale deal. This has also been Ambani’s position on the matter.

Within hours of the French website publishing the story, a defence ministry spokesperson tweeted: “The report referring to fmr French president Mr. Hollande’s statement that GOI insisted upon a particular firm as offset partner for the Dassault Aviation in Rafale is being verified. It is reiterated that neither GoI nor French Govt had any say in the commercial decision.”

The French government said in a statement: “The French government is in no manner involved in the choice of Indian industrial partners who have been, are being, or will be selected by French companies. In accordance with India’s acquisition procedure, French companies have the full freedom to choose the Indian partner companies that they consider to be the most relevant, then present for the Indian government’s approval the offsets projects that they wish to execute in India with these local partners so as to fulfil their obligations in this regard.”

Reliance Defence declined comment on the matter.

The report comes at a time when the Congress has accused the government of favouritism and misleading the nation on the Rafale deal.

“The PM personally negotiated & changed the #Rafale deal behind closed doors. Thanks to François Hollande, we now know he personally delivered a deal worth billions of dollars to a bankrupt Anil Ambani,” Congress president Rahul Gandhi tweeted on Friday.

“The PM has betrayed India. He has dishonoured the blood of our soldiers,” he added.

In the Mediapart report, Hollande also denied any link between the Rafale deal and a film involving his partner Julie Gayet.

“This group did not have to give me any thanks for anything. I could not even imagine that there was any connection to a film by Julie Gayet,” Mediapart quoted Hollande as saying.

The Indian Express reported on August 31 that Ambani’s Reliance Entertainment inked a pact with Gayet to produce a film two days before Hollande attended the Republic Day celebrations as chief guest in 2016. The memorandum of understanding for supplying 36 Rafale jets was signed during that trip.

The National Democratic Alliance’s decision to enter a $8.7 billion government-to-government deal with France to buy 36 Rafale warplanes made by Dassault was announced in April 2015, with an agreement signed a little over a year later. This replaced the previous United Progressive Alliance regime’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd.

The deal has become controversial with the Opposition, led by the Congress, claiming that the price at which India is buying Rafale aircraft now is Rs 1,670 crore for each, three times the Rs 526 crore, the initial bid by the company when the UPA was trying to buy the aircraft. It has also claimed the previous deal included a technology transfer agreement with Hindustan Aeronatics Limited (HAL).

The deal has also become controversial on account of the fact that one of the offset deals signed by Dassault is with the Reliance Group of Anil Ambani. The Congress claims the earlier deal was scrapped and a new one signed just to provide Ambani this opportunity for an offset deal. Both the government and Reliance have repeatedly denied this. The government has also said the two deals are not comparable, that cost- and timing-issues would have ensured the older deal never closed, and that the planes it has ordered come with customized weaponry. It has however declined to provide the exact costs for them, citing a confidentiality agreement with France, and larger, security concerns.

T Suvarna Raju, who was heading HAL till three weeks ago, told HT on September 19 that the public sector undertaking could have built Rafale fighters in India had the government managed to close the original negotiations with French aerospace firm Dassault Aviation for 126 fighters and that there was a work-share agreement between the two companies. However, he admitted that it would have cost HAL more to make the aircraft. Former air chief AY Tipnis told HT that HAL may have found it challenging to build the Rafale.

The government and the Congress have been trading charges over the controversial Rs 59,000-crore purchase almost every day this week, with Congress chief Rahul Gandhi demanding defence minister Nirmala Sitharaman’s resignation for “lying” on the capability of HAL to build the fighter aircraft and the latter claiming the Congress-led UPA was responsible for HAL’s decline and that the decision to drop the state-owned aircraft maker from the deal was taken during the UPA’s rule.

Defence ministry officials on Wednesday reiterated there were areas of disagreement between HAL and Dassault such as work-share, responsibility sharing and man-hours required to assemble the aircraft.

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Monday, January 24, 2022