Rafale deal: Why is CEO of Dassault Eric Trappier defending it?

In this statement senior Congress leader Kapil Sibal points out the discrepancies in Dassault CEO’s interview about the Rafale deal and it’s joint venture with Reliance

PTI photo
PTI photo

Kapil Sibal

Today let’s start with Rafale. And while I was exceptionally skeptical about the manner in which the deal was done and was by and large convinced that there must be corrupt motives involved in it, there is a recent interview by Eric Trappier, the CEO of Dassault, on the 1st of November (2018), who now squarely says that the first time he got to know about this government-to-government contract was on the day of the press conference (after Narendra Modi’s 10 April 2015 meeting with President Francoise Hollande in Paris); which means Dassault did not know that the deal which they had with HAL (Hindustan Aeronautics Limited), which was 95% through, he (Trappier) did not know there was no deal with HAL, because on that particular day that is the 10th of April, that the prime minister announced the deal, he (Trappier) had no idea that HAL had been dropped.

I do remember on the 25th of March (2015) an announcement had been made by Trappier himself - at which our ambassador was also present – saying that everything was hunky dory with the deal with HAL and 95% had been cleared and when the prime minister comes the balance 5% would be cleared too. And the deal will be signed and sealed.

At that point in time I think I went to the press and said, Dassault should have known at least two weeks before the prime minister came (that the HAL deal was off). But now Eric Trappier has himself admitted that he did not know about it till the press conference took place. That’s number one.

I think that there is corruption at the highest level in our country and I would advise the CEO of Dassault not to muddy the waters any further. Because remember, howsoever high you may be, the law is always above you

Number two, which is even more surprising, is that on the 25th of March (2015) one company of Reliance was incorporated, and Dassault did not know a Reliance company was incorporated. Then obviously Reliance knew that there was a deal in which Reliance was going to be the offset partner. Because why would it incorporate a company on the 25th of March? And on the 23rd of April 2015 another company was incorporated, which was the joint venture agreement. So obviously on 25th of March when the company was incorporated by Reliance it knew that the prime minister would be coming on the 10th of April and announce the deal and on the 23th of April 2015 there would be a joint venture agreement.

Now I would through you warn Dassault that the more they continue to hide the deal, the more likely it is they would get into serious trouble in times to come. Under the offset guidelines (in India), Dassault could not have entered into a deal with a company which had no experience in defence. It (Reliance) didn’t have a licence to manufacture defence equipment. And just so that you know the date – and this is not something I reveal, but this is a fact – that only in July 2018 was that licence granted. But that’s a violation of offset guidelines. And Dassault should have known.

One of the reasons that Eric Trappier gave, saying that I don’t know the details of this deal, because it was a government-to-government contract; but (Trappier said) one thing I know, that the 36 Rafales bought, the price was 9% cheaper (per aircraft) than the Rafales that were to be bought by the Government of India in the first agreement. Remember 18 Rafales of the 126 Rafales were to be off-the-shelf. The 36 Rafales were 9% cheaper (per aircraft) than the 18 Rafales off-the-shelf. But he doesn’t tell us that if you buy 126 Rafales the price would be much lower, because apart from the 18 you’re going to buy off-the-shelf, the balance 108 are going to be manufactured in India; and the cost of development of technology and all the input costs on the French side that Dassault have, would actually have to be paid by the Government of India over a period of so many years were 126 to be bought. So actually the price would have been much lower. Much, much lower.

When you buy 18, you buy a very small number off-the-shelf. You buy 36 you buy a larger number. So the price (per plane) was going to be lower. But the deal with HAL was 126. So if that deal had gone through, the price would have been much lower. So this is a spin the Government of India and Dassault are giving to this entire (new) deal.

Eric Trappier said another thing in that (1 November) interview. He says we decided to do this deal with Reliance for the reason that Reliance had connectivity from its manufacturing facility in Nagpur to the airfield. And that was absolutely necessary; which HAL did not have. This statement is per se false, for the simple reason that it’s only in 2016, August 2016, that actually the price was paid for the land that provided that connectivity. It was not available at the time the joint venture was entered into. The second part of the statement is also false, because HAL had land in Bangalore and in fact they were going to set up a huge facility for the manufacturing of the Rafales. And they had applied for the setting up of those facilities. This fact Eric Trappier did not reveal. So this only shows that Dassault now is trying to hide the truth. Unfortunately it’s falling into its own trap.

Now President Hollande naturally has said what he has said. And the logical reason why he’s not saying anything more is I guess that he must have been told by the French that the more you say, the worse it’ll be for our deal. The only two people who must have known about the deal is President Hollande as well as the prime minister (Modi); and the prime minister is quiet. Hollande has spoken. The prime minister cannot afford to speak, because if he disputes what Hollande says there’ll be a crisis. And he cannot possibly agree with what Hollande says. So naturally he’s a bit quiet.

And then the prime minister says that there is no corruption in high places. What happened, why this deal happened, why only 36 Rafales. And if you want to refurbish your aeronautics industry and your fighter planes, your medium range fighter planes, then why not 126, why only 36?

The chairman of HAL said just before and after he retired that the deal was through; I did not know (it had been scrapped). We are very much capable (he said). The Government of India says (he said) we are not capable of manufacturing these Rafales. He said we are very much capable. In fact, you know very well that in April (2015) itself about two or three Mirages, which had been refurbished, were being provided in 2015. So the HAL chairman himself said we were capable of manufacturing, we done so many, we’ve done Sukhois and we’ve done a lot of these fighter jets from Russia. So he said there’s no problem at all. But of course the prime minister had other ideas.

What is protected is technology. Who wants to know the technology? We want to know the price. So why are you hiding the price from us? You can tell us the price of the equipment. If you say it is different, tell us what the 18 off-the-shelf Rafales were going to have in terms of equipment and what is the superior equipment the 36 Rafales off-the-shelf had to have. You can tell us the price. There’s no secrecy there. Or is that protected? Nobody’s asking for technology. They don’t tell us the price. Neither Dassault tells us the price, nor the Government of India tells us the price. And we are saying why then stop at 36 and why do you scrap the HAL deal and what’s the motive behind it and why did you give it to a company which had no defence experience? And why did you enter into a joint venture with a company which had no licence to manufacture? And why did you enter into a deal with a company which had no land?

You gave a reason that they had land and HAL didn’t. If Dassault did not know (Reliance was the new offset partner), then why is Eric Trappier giving these reasons to defend the deal? Dassault did not known until the press conference (after Modi’s meeting with Hollande). So why is he defending the deal? Why is he being asked to make these statements? These are very, very serious issues. And that’s why we want an inquiry. I think that there is corruption at the highest level in our country and I would advise the CEO of Dassault not to muddy the waters any further. Because remember, howsoever high you may be, the law is always above you.

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Published: 13 Nov 2018, 3:46 PM