‘This is Dassault Aviation’s choice’, says French firm after Hollande’s remarks
It was Dassault Aviation’s choice to partner with the Reliance group, the French company has clarified as a political firestorm raged in India after former president Francois Hollande’s reported remarks on the multi-billion dollar Rafale jet deal on Friday.
Hollande was quoted by French website ‘Mediapart’ as saying that the Indian government proposed the name of Anil Ambani’s Reliance group as Dassault Aviation’s offset partner and that France didn’t have a choice. The defence ministry said soon after that neither the Indian nor the French government was involved in the commercial decision. The French government said it was in no manner involved in the choice of Indian industrial partners for the Rafale fighter jet deal, asserting that French companies have the full freedom to select Indian firms for contracts.
Dassault Aviation said in a statement: “This offsets contract is delivered in compliance with the Defence Procurement Procedure (DPP) 2016 regulations. In this framework, and in accordance with the policy of Make in India, Dassault Aviation has decided to make a partnership with India’s Reliance Group. This is Dassault Aviation’s choice, as CEO Eric Trappier had explained in an interview published in MINT newspaper on April 17, 2018.”
Dassault’s CEO had told Mint in that interview, “We have a partnership with Reliance, part of the offset obligations of the Rafale deal. It was our choice, we continue with our choice.”
France said in its statement late on Friday night, “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.”
The clarifications came after Francois Hollande was quoted by ‘Mediapart’ as saying, “It was the Indian government that proposed this service group, and Dassault which negotiated with Ambani. We had no choice, we took the interlocutor who was given to us.” Asked who selected Reliance as a partner and why, Hollande replied, “We had no say in this regard.”
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.”
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 ₹1,670 crore for each, three times the ₹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 ₹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