Rafale is a top class 4+ generation jet, but why are we paying three times more than what was offered in 2014?

Defence Minister Rajnath Singh will no doubt once again do the nimbu-mirchi puja to formally induct the Rafale fighter into the IAF today. All the pujas in the world will not, however, wash away the sins of omission and commission that went before the deal was consummated. In such deals, the consummation takes place well before the bride comes to her in-laws.

The Rafale fighter we bought makes it the most expensive 4+ gen fighter in the world. The nimbu-mirchi puja will not add to or detract from the potency of the Rafale, though one cannot be sure by how much the IAFs lethality will increase. And if the SU30's midlife upgrade takes place; even that is doubtful.

We can argue till kingdom come on the reasons for buying just two squadrons of another 4+ gen fighter, when the SU-30 MKI with midlife upgrades and a new array of weapons could have worked out much cheaper. Besides, it’s abundantly clear that we are now paying substantially enhanced costs for the new lot of Rafales.

Rahul Gandhi tried to make the Rafale issue the sharp edge of the sword to politically slay Narendra Modi. He did not succeed, but that does not absolve the Modi government for not providing convincing answers as to why we are paying almost three times more for each Rafale jet than what was offered in 2014. The people need an explanation. It is not a defence secret. It is an essential truth that is being sought.

The Indian Air Force was hoping for a minimum of 80 Dassault Rafale fighters, but the Modi government has kept the initial order down to 36 fighters in a fly-away condition for 7.8 billion euros, or $9.13 billion. This gave rise to the calculation that we were buying the fighters for Rs.1600 crore each.

During the run-up to the deal, the then Defence Minister, Manohar Parrikar, muddied the waters a bit by making off the cuff comments about the high cost of the Rafale compared to the IAF’s mainstay, the SU-30 MKI. I don’t think there is any issue about the quality of the Rafale, however.

The public, quite rightly too, believes that all weapons purchases by the government involve murky transactions and huge pay-offs to figures in the government. This has been our track record. The Modi government too is a government of politicians and many people believe that appointing Anil Ambani’s Reliance Defence as the main offset contractor clearly suggested a deal was on.

Asked why Anil Ambani was chosen as the offsets partner for Rafale, an unnamed French official reportedly said: "Il fallait un homme qui puisse sussurer dans l'oreille du cheval. (We needed a man (a jockey) who could whisper into the horse's ear)". This should lend further credence to that.

According to the Ministry of Company Affairs, Reliance Defence Limited was registered on March 28, 2015. On April 11, 2015, it became the main partner to ensure the 50 percent offset clause under which Dassault and other related French parties will invest half the contract value back in the country. Government officials insist that 74 percent of the offsets will be exported, earning 3 billion euros for the country in the next seven years.

In the past year, Anil Ambani's ADAG group has spectacularly imploded and he is busy staving off bankruptcy. The offsets itself are now in doubt.

There is much noise about the huge costs at which the 36 Rafales have been contracted for. The comparable costs of the deal for 126 jets and that for 36 can only be read when all the costs are factored in. The cost of the new deal for 36 Rafale fighters is 3.42 billion euros as the cost of the bare planes; 1.8 billion euros for associated supplies for infrastructure and support; 1.7 billion euros for India-specific changes to the plane; and 353 million euros for “performance-based logistics support”; with the weapons package of 700 million euros being the extra.

What was new are the performance-based logistics support and the weapons package. So take 1053 million euros out and you have the comparable cost, which means it is 7.1 billion euros.

It appears that the fiddle is in the India specific costs, additional infrastructure and support, and performance logistics support. The first MMRCA deal also would have included "India specific" specifications, as is in the case of the IAF’s SU30MKI’s. Thus, for comparison sake, the argument can be made that 36 Rafale’s now cost 7.1 billion euros while 126 Rafales in 2012 cost 7.75 billion euros.

IAF ‘spokesmen’ have been justifying the Rafale purchase because the package includes the Meteor air-to-air missile. The Meteor is the new game changer in the air. It increases the "no-escape" zone for a hostile aircraft by about three times. The Meteor is an active radar guided beyond-visual-range air-to-air missile (BVRAAM) developed by MBDA. It will offer a multi-shot capability against long range manoeuvring targets in a heavy electronic countermeasures (ECM) environment with range in excess of 100 kilometres (62 miles).

According to the German manufacturer, in a head-on engagement, the Meteor provides a no-escape zone three times greater than that of a conventionally-powered missile. With the Meteor launched in pursuit of a target — a tail-chase engagement — the Meteor is five times as lethal as a conventional equivalent such as the American AMRAAM.

According to MBDA, Meteor has three to six times the kinematic performance of current air-air missiles of its type. The key to Meteor's performance is believed to be its throttle-able ducted rocket (ramjet) manufactured by Bayern-Chemie of Germany.

Since the IAF cannot speak for itself, it deploys former IAF officials to speak for it. These “experts” had been deceptively disseminating that the Meteor missile is the real reason for buying the Rafale jets. This was even stated on a RSTV panel discussion, in which I took part, by a former Air Vice Marshal who has found second wind as a ‘strategic expert’.

The fact is that the Swedish Gripfen too has now been integrated with the Meteor and open sources indicate that the IAF too is contemplating integrating the SU-30MKI and Meteor. Even the Tejas can be fitted out with Meteors. So we are not buying the Rafale just for the Meteor.

The cost of procuring Meteors is hard to come by. Limited figures came to light in Germany in 2013. The Luftwaffe acquired 150 missiles at a cost of around $323 million, plus a further $175 million for integration. That compares favourably with a price tag of $423 million for 180 AIM-120Ds, which the Pentagon paid in 2012.

Today the Meteor will cost about 2.5 million euros each. I don’t think the IAF will need more Meteor missiles than the USAF or Luftwaffe. But then, there are other missiles to pay for too. Missile purchase can never be part of the capital cost of a fighter. Since they are expendable, and presumably meant to be expendable, they should be part of revenue expenditure.

Make no mistake. The Rafale is a top class 4+-generation fighter. Perhaps even the best. But we are concerned with prices and pay-offs. If this is a given, we must be happy that we made a good purchase. We must also live with the nagging suspicion that money changed hands not just between the principals but to others less directly connected too. That probably shaped India's politics also.