Dassault Aviation chief executive officer (CEO) Eric Trappier, in an interview to news agency ANI, rubbished allegations made by Congress president Rahul Gandhi that he lied about details of the French military planemaker’s offsets joint venture with Anil Ambani’s Reliance Group in the Rafale jet deal.
He also claimed the price of each jet, in flyaway condition, under the deal signed by the National Democratic Alliance (NDA) government is 9% lower than the price offered by the company to the previous United Progressive Alliance (UPA) government in a deal that wasn’t closed.
Trappier’s revelation is unlikely to resolve a highly controversial issue, one which has become central to the Congress’ attacks on the Bharatiya Janata Party (BJP). The Supreme Court is also hearing petitions related to the case.
The government has submitted details of the price at which it bought the aircraft to the court in a sealed envelope and also shared with it details of the process involved. Trappier’s interview came a day ahead of the court’s next hearing. “I don’t lie. The truth I declared before and the statements I made are true. I don’t have a reputation of lying. In my position as CEO, you don’t lie,” said Trappier when asked to respond to Gandhi’s charge that Dassault was covering up possible cronyism in awarding the offset deal to Reliance Group.
The Congress party dismissed Trappier’s remarks, alleging a “fixed match” between the Narendra Modi government and Dassault even as it reiterated its demand for a joint parliamentary committee (JPC) probe into the Rafale deal.
Rahul Gandhi, in a press conference on November 2, alleged that Dassault invested Rs 284 crore in a loss-making company promoted by Anil Ambani which was used to procure land in Nagpur for the offsets joint venture. “It is clear the Dassault CEO is lying. If an inquiry starts on this, Modi is not going to survive it. Guaranteed,” added Gandhi.
The NDA government’s decision to enter an $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 UPA regime’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by state-owned Hindustan Aeronautics Ltd (HAL).
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 HAL.
The NDA has not disclosed details of the price, but the UPA deal, struck in 2012, was not a viable one, former defence minister Manohar Parrikar previously said.
The deal has also become controversial on account of the fact that one of the offset deals signed by Dassault is with a joint venture it has with Reliance Group. 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 Group have repeatedly denied this. In the interview in the Dassault hangar housed in Istres-Le Tube Air base, located north of the French city of Marseille, CEO Trappier said the company had prior experience dealing with Congress party administrations and the comments by Gandhi made him sad.
“We have a long experience with the Congress party. Our first deal was with India in 1953 with Nehru, and other prime ministers. We have been working with India. We are not working for any party. We are supplying strategic products like fighters to the Indian Air Force (IAF) and the Indian government. That is what is most important,” said Trappier.
When pressed for the reason behind Dassault’s choice of Reliance Group as an offset partner, Trappier clarified that the money being invested by the French company was not going to Reliance directly but to a joint venture that included Dassault.
“We are not putting the money in Reliance. The money is going into the JV. I put my know-how free of charge on how to produce people. I have engineers and workers from Dassault who are taking the lead as far as the industrial part of this deal is concerned. At the same time, I have an Indian company like Reliance who is putting money into this JV as they want to develop their country. So the company is going to know how to produce aircraft,” added Trappier.
Trappier added that Reliance Group would match the investment by Dassault, given that Dassault had a 49% stake and the Indian partner 51% in the joint venture, as per prescribed government norms. “We are supposed to put in this company together about ~800 crore as 50:50. For the time being, to start work in the hangar and to pay workers and employees, we have already put ~40 crore. But it will be increased to ~800 crore, which implies ~400 crore by Dassault in the coming five years,” said Trappier. He added that Dassault has seven years to meet its offset commitments. “During first three years, we are not obliged to say with who we are working. We have already settled work and agreement with 30 companies, which represents 40% of total offset obligation as per contract. Reliance is 10% out of the 40, while rest 30% is a direct agreement between these companies and Dassault,” Trappier said.
On the pricing issue, the CEO said that the present aircraft were cheaper by 9% than those offered in the initial deal with the UPA that wasn’t signed. “Price of 36 was exactly the same when you compare with 18 flyaway; 36 is the double of 18, so as far as I was concerned, it should have been double the price. But because it was government to government, there was some negotiation, I had to decrease price by 9%. The price of Rafale in flyaway condition is less expensive in the 36 contract than the 126 contract,” he said.
When asked about the initial agreement with HAL and the subsequent breakdown of talks with the Indian state owned firm for production of Rafale jets, the Dassault CEO said that if the initial deal of 126 jets went through they would not have hesitated to work with HAL and Mukesh Ambani-led Reliance Industries Ltd. “It’s because the 126 didn’t go smooth that the Government of India had to reconfigure to urgently acquire 36 from France. And then I took the decision to continue with Reliance, and HAL even said in the last few days that they were not interested to be part of the offset. So, it has been done by my decision and the decision of Reliance to invest in a new private company,” added Trappier.
He added that Dassault had earlier been in discussions with several other companies for offset tie-ups. “Obviously, we could have gone to Tata or other family groups. At that time, the decision to go ahead was not given to Dassault. We were in 2011, Tata was also discussing with other flying companies. We finally decided to go ahead with Reliance as they have experience in big engineering facilities,” Trappier said.
Talking about the aircraft, the Dassault CEO explained that the present planes will have all necessary equipment, but not weapons and missiles. “The weapons will be sent in different contract. But the aircraft with everything other than weapons will be dispatched by Dassault,” he said.
In New Delhi, Congress’s chief spokesperson Randeep Singh Surjewala said: “The nation does not need doctored explanations but fair investigation. A fixed match between the BJP government and Dassault and public relations stunts of Modi and Eric Trappier can’t hide the blatant corruption.”
“Mutual beneficiaries and co-accuseds’ statements hold no value. Beneficiaries and accused can’t be judge in their own case,” he tweeted. Surjewala’s colleague Manish Tewari referred to an earlier statement by former French president Francois Hollande to counter Trappier’s remarks. “Hollande had twice stated that they were told that the deal will be concluded only if the Reliance Defence is taken as the offset partner. So, who is telling the truth?” he asked.
“There are lies, damned lies and to top it all there is a #RaGaJhoothKiMachine, a non-stop 24/7 source of fake news, fake narratives, fake issues just to salvage a falling political career. Mr. Rahul Gandhi, truly a weak attempt to influence the Hon’ble SC,” the BJP said on its official Twitter handle.
Finance minister Arun Jaitley said on Twitter: “UPA delayed the Rafale purchase, much required for improving the combat ability of Indian Air force. Is Rahul Gandhi’s failed politics compelling him to render India’s sensitive defence requirements controversial?”