The dogfight over the purchase of 36 Rafale planes currently dominating public discourse in the country reminds me of the dictum, ‘Don’t confuse me with facts’. National leaders are calling each other thieves, liars, traitors and, of course, corrupt. Even Pakistan and the current and a former president of France have been dragged into the imbroglio. The two national parties seem to be like two blindfolded boxers punching in the air hoping to land a knockout punch. A lot of half-truths are flying around, with facts becoming the biggest casualty. In the eye of the storm is industrialist Anil Ambani.
The controversy is centred around the Rs 30,000 crore ‘offsets’ that Dassault and its associates have to spend with Indian manufacturers not necessarily related to the Rafale aircraft as part of the Rs 59,000 crore Rafale deal. The allegation is that the younger Ambani’s joint venture with Dassault has been favoured with all of the Rs 30,000 crore because of his perceived proximity to Prime Minister Narendra Modi. The suggestion that his company is getting all of it is not true. There are 72 companies that have been identified by the French industrial partners in the deal- Safran, Thales, Dassault Aviation- for the offset. Ambani is likely to get a decent share, but the biggest beneficiary will be the government organisation DRDO, or the Defence Research and Development Organisation, with an estimated Rs 9,000 crore.
The other big issue is that Ambani has no track record in defence manufacturing and has several failed ventures attached to his name. Most of his group companies are in poor financial health and laden with a debt of Rs 1.12 lakh crore as of March 2018.
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The Government has grown so frustrated with the French company selected to build Australia’s next fleet of submarines that Defence Minister Christopher Pyne refused to meet top officials visiting the country this week.
Naval Group was selected in 2016 to build 12 submarines for the Australian Navy, in the country’s largest-ever defence contract worth $50 billion. The ABC understands Mr Pyne will only meet the chief executive of the majority French state-owned company once a crucial document, the strategic partnering agreement (SPA), has been signed.
Negotiations on that document have stalled and it is feared they may not be resolved before next year’s federal election. Defence and industry figures have told the ABC that France and Australia will not be ready before 2019 to sign the document, which is needed before detailed design contracts can be finalised, and submarine construction begins.
Sources familiar with the process say a goal to sign the vital SPA during a visit to Adelaide this week by French Minister Florence Parly has slipped off course, with fundamental differences that may not be reconciled before early next year. Concerns over warranties and technology transfer are believed to be the main sticking points in the tough negotiations between the Australian Commonwealth and French-owned Naval Group.
The knock-on effects of delay on the SPA, which covers the guiding terms and conditions that govern the submarine program, and the likelihood of a federal election being called in the first quarter of next year threatens to create a “perfect storm” of uncertainty, with some risk that it could ultimately sink the French project entirely.
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