P8-I, a militarised version of the Boeing 737 commercial jet, can carry sonabuoys to detect, track and destroy submarines

by Sandeep Unnithan

The Congress believes it has the government on the mat over the Rafale deal and the BJP has a new scam to target the Congress with. In a report tabled before Parliament on August 7, the Comptroller and Auditor General indicated serious discrepancies in a UPA-era deal: a $2.1 billion contract in 2009 to buy eight Boeing P8-I Long Range Maritime Reconnaissance (LRMR) aircraft. The CAG said that the defence ministry inflated a bid from a Spanish company to make a rival US-made aircraft look cheaper. The MoD enhanced the financial bid of EADS CASA of Spain to cater for 20 years product support cost while ignoring this element in respect of M/s Boeing, USA.

At a press conference on August 8, former finance minister Yashwant Sinha, former communications and information technology minister Arun Shourie and lawyer and Swaraj Abhiyan leader Prashant Bhushan called the Rafale deal a scam and said this was literally a replay of what the then-government invoked for not giving details of the Bofors contract.

The Rs 46 crore of bribes in a $1.2 billion contract for 410 Swedish howitzers in 1986 also lent a word to signify graft in Indian defence deals Bofors. The shrill opposition campaign that led to Rajiv Gandhi's defeat in the 1989 elections testified to its potency as a political weapon. The Congress has picked on the NDAs 2016 deal, worth an estimated 7.9 billion Euros (Rs 59,000 crore) to buy 36 Rafale fighter aircraft from France, to highlight what it alleges is a political deal reeking of corruption and crony capitalism. Party mouthpiece National Herald missed the irony when it ran a July 30 story with a banner headline Rafale: Modi's Bofors. The government has refused to reveal the details of the Rafale deal citing a confidentiality clause.

The CBI, meanwhile, is set to appeal the Supreme Court to reopen the Bofors investigation even as the Narendra Modi government got fresh ammunition to hit back at the Congress.

The P8-I deal was hailed as a model acquisition when it was decided in less than 24 months. At a time when defence deals took an average of eight years, if not more, to reach contract signing stage, the MoD wrapped the deal up in less than two years from granting the Acceptance of Necessity to the navy to signing the contract. Now, as the CAG indicates, the outcome was judged through fudged figures. The government was yet to respond to the CAG report at the time of going to press, but there is tremendous anxiety within the navy over what it chooses to do next. An investigation could put on hold further orders of the US-made aircraft, which the navy says is by now absolutely vital for its Indian Ocean strategy.

The P8-I, a militarised version of the Boeing 737 commercial jet, can carry sonabuoys to detect, track and destroy enemy submarines and air-to-surface missiles to target warships and is essential for tracking Chinese submarines and surface vessels in the Indian Ocean. In 2010, the UPA okayed the acquisition of four more P8-I's under the option clause in the older contract. The funds were provided by the NDA which signed the deal in 2016. The four aircraft, to be delivered by 2020, will join an existing fleet of eight P8-I's. The navy hopes to eventually field a fleet of 24 such aircraft over the next decade.

The CAG's charges of price-fixing in the deal are far more grievous than other deviations noted in the report Boeing's failure to comply with a $641.26 million offset (where an original equipment manufacturer has to buy 30 per cent of the value of a defence contract from the customers domestic industry) even seven years after the contract was signed. Only an investigation can reveal the truth.