The Arms Procurement Syndrome

Image result for pics of rafale in india

(Air Chief Marshal Arup Raha with the Rafale)

———-

Is the Rafale aircraft worth the financial and political cost?

There is no end to the lessons the Government can learn from the Rafale decision. The short-circuiting of the procurement process of the medium multi-role combat aircraft by peremptorily announcing the buy of 36 Rafale combat aircraft in Paris in April 2015 means it has to carry the can for all aspects of the deal. Whatever the motivation—to cut through the underway negotiations between the Dassault Avions company and the Defence Ministry’s Price Negotiation Committee, placate the Indian Air Force (IAF), which was getting antsy about the falling fighter squadron strength, or to squeeze some sensitive technology out of France—it has landed the Government in a political mess. Hereafter, for every charge of ‘Bofors’ that is hurled at the Congress Party, there will be ‘Rafale’ thrown back. And, the BJP Government still has to come up with an explanation for the contract, all tied up in a confidentiality straitjacket, that makes sense.

There was much controversy attending the shortlisting of the Rafale aircraft before this Government stepped into the picture. It should have alerted them to trouble round the corner. Rafale is a 4.5 generation fighter plane, same as the indigenous Tejas Light Combat Aircraft, of medium range, and the price bracket was generally known. In any case, at a final negotiated unit price of Rs 670 crore with a spares support package to ensure 70 per cent serviceability of this aircraft for 10 years, India will pay Rs 1,640 crore per plane, or a whopping Rs 59,040 crore for 36 Rafales. What no one has paid attention to are the follow-up costs of the Rafale over its lifetime of, say, 35 years. While the costs for the first 10 years has already created a buzz of incredulity, the sums for the subsequent 25 years of the aircraft’s tenure will blow the top of the treasury. Consider the figures: Because prices of spares, like those of whole weapons systems, increase exponentially, based on the sums agreed by this Government for the first 10 years, a single Rafale will cost Rs 8,212 crore to upkeep for the subsequent 25 years, or Rs 295,632 crore for a fleet of 36 aircraft. If this figure is combined with the agreed price tag, the total cost at Rs 354,672 crore (at today’s rupee value) becomes stratospheric. The Government has obviously decided that this grand expenditure on 36 Rafales over 35 years is worth the nation’s while. Is it?

One could get into speculative quibbles over the provisions in the ‘confidentiality agreement’. For instance, this deal is rumoured to allow India access to the French inertial confinement fusion (ICF) facility to refine its thermonuclear weapon designs. But why was this necessary when the use by Indian nuclear weaponeers of the Russian ICF unit in Troitsk could have continued? And, what’s the point of changing the ‘plumbing’ in this aircraft to make it nuclear weapons capable, when there are other warplanes (Su-30MKIs, upgraded Mirage 200s, and upgraded Jaguars) in the IAF inventory for this purpose? The larger question is: Was Rafale the best way to spend this scale of monies? Or, to put it another way, will India get Rs 354,672 crore worth of security from just 36 Rafale aircraft, considering this is too small a fleet to operationally count for much?

But just to give perspective on what money can buy and how this enormous amount that will go into sustaining Dassault and helping the French combat aircraft industry survive, could have been more productively deployed, consider this: The lease from Russia for 10 years for the second nuclear-powered hunter-killer (SSN) Akula-class submarine, under negotiation, may end up with an all-up price tag of Rs 14,000 crore. Is the Rafale over 10 years worth more for national security than an SSN? The lifetime Rafale costs would, moreover, have permitted the Indian Army to raise two additional offensive mountain corps to take the fight to the PLA on the Tibetan Plateau, and left enough money to cover the costs of getting the Mk-2 variant of the Tejas airborne and the home grown Advanced Medium Combat aircraft programme into production, of modernising nuclear warheads and of accelerated production of intermediate range and intercontinental range ballistic missiles and cruise missiles.

Between a military enamoured of foreign armaments and habituated to spendthrift ways and an Indian Government minus the will to push indigenous and seemingly clueless about the methods of prioritisation of military procurement demands, public monies will continue to be wasted in a scattershot approach to funding defence programmes. Consequently India will remain a conventionally feeble and strategically vulnerable Power Lite, offering minuscule competition to China.

———-

(Published in Open magazine, Feb 22, 2018, http://www.openthemagazine.com/article/defence/the-arms-procurement-syndrome

 

 

About Bharat Karnad

Senior Fellow in National Security Studies at the Centre for Policy Research, New Delhi, he was Member of the (1st) National Security Advisory Board and the Nuclear Doctrine-drafting Group, and author, among other books of, 'Nuclear Weapons and Indian Security: The Realist Foundations of Strategy', 'India's Nuclear Policy' and most recently, 'Why India is Not a Great Power (Yet)'. Educated at the University of California (undergrad and grad), he was Visiting Scholar at Princeton University, University of Pennsylvania, the Shanghai Institutes of International Studies, and Henry L. Stimson Center, Washington, DC.
This entry was posted in arms exports, asia-Pacific/Indo-Pacific, Asian geopolitics, China, China military, civil-military relations, corruption, Decision-making, Defence Industry, domestic politics, DRDO, Europe, Geopolitics, Great Power imperatives, India's strategic thinking and policy, Indian Air Force, Indian ecobomic situation, Indian Politics, MEA/foreign policy, Military Acquisitions, Military/military advice, society, South Asia, Strategic Relations with the US & West, Technology transfer, Weapons. Bookmark the permalink.

38 Responses to The Arms Procurement Syndrome

  1. sanman says:

    Here’s an interesting article on the need for US to temper its expectations of India:

    https://warontherocks.com/2018/02/america-has-high-expectations-for-india-can-new-delhi-deliver/

    • the thing is that if BJP needs to be a KarmaYogi,then they have to DEVELOP A SPINE FOR Indigenisation of Aircrafts

      • sanman says:

        Well, I don’t see how India can be a master of indigenous fighter construction so quickly.
        Even if our own armed forces are leery of using our indigenously-built hardware platforms, then we should still at least strive to build them for export. This is because it will at least employ our own skilled personnel while gradually giving them a change to evolve to better and better products. We should be willing to import higher-tech hardware that’s beyond our ability to indigenously produce, even while we manufacture and export whatever tech-level we can manage.to do.

      • &^%$#@! says:

        @sanman: it will be next to impossible to find export customers for Indian weapons if the Indian armed forces themselves shy away from them.

      • i am sorry for both of you, if PLA Air Force can fly JF-17s , if US Air Force can fly F16s, then why not IAF could fly our own Tejas or HF Marut, because we know what happened in the Tyagi Brothers episode,that is the only reason & we can export our stuff to countries in ASEAN & Africa which is STILL the unexplored venture for our indian exports,whether it is South Africa or Kenya,what could we do ? Supply Brahmos missiles to every country on the chinese periphery,do you think it will not give revenue ? Do you think that supplying Ballistic missile Technology to Vietnam will not give any revenue,ofcourse it might not be in US $,but the fact is that the transactional methodolgy is also changing in Foreign Policy,we still are lagging behind with Beijing no doubt about it, but still we can do some damage to the chinese,which they cannot AFFORD,if they want to be the Super-Power (as they claim)

      • sanman says:

        &^%$#@!,
        Most countries don’t have to face military threats as severe as ours. There’s little reason why they should have hardware needs as demanding as ours. I see Israelis exporting fighters like Kfir which wouldn’t be useful for their own frontline combat. We should likewise be able to export to others with needs lesser than our own, in order to fund the continued development and evolution of our own domestic capabilities.

  2. Sir, but don’t you think that HAL does not has the current capacity to produce more than 8-16 aircrafts per day ? And if Private Sector is involved ,as you have suggested many times, then what about the quality control ?

  3. Venky says:

    All this criticism is fine, what is the solution ? Why was the MMRCA contest launched at all ?
    That we canceled it, means we have become a joke in the world.
    Tejas maybe a good craft , but is not in the same class as Rafale/Eurofighter.
    don’t blame this govt for buying it, they bought the winner of the contest.
    Every defence guy has justified it. It has gone through the process DPP and is a GtG deal.

    There is a big issue in our procurement. We have not done anything since Kargil . Assault rifles pending. Anti material rifle canceled, sniper rifles pending. Artillery pending. Light utility helicopter pending . Submarines going at snails pace. Ships awaiting fitments for ages.

    When a decision is taken a that is ok by the guys who run the show , every columnist (who have no clue on how to hold an assult rifle ) peddles an opinion. Converts it into political plane.
    Stop writing rubbish.

    • If only people who have held the gun can make decision about procurement, then what expertise have the defence folks in finance and price negotiation.

      If defence analyst needs to be necessarily a soldier then the defence minister has to be a general. Where is that logic headed? Who has the right to vote only a PhD who is also a General?

      Every voter has a right to ask questions in a democracy. Accountability is needed, people cannot hide behind strategic/security interest excuse for not answering questions.

    • you are saying rubbish, this man was in the NSAB (National Security Advisory board) & was a member of the Indian Nuclear Doctrine Drafting committee after Pokhran ,do you know his credentials before opening your bloody mouth ? Or are you one of those newbies, who give a rant to sound cool ? L&T are making Arihant class submarines anyways,so why not Tejas could be transferred to the private sector for targeted timely production ? Do you have any idea that our own missiles are world class,if we cane sent a roclet to mars, then why not an indigenous fighter aircraft, OFCOURSE it is not PERFECT, but so is F-35,the thing which is closer to perfect are Su-35s,but Tejas is a 4.5+ Gene ration Fighter Aircraft,just like F-22 (which requires 20 hours of maintainence for every single hour of flight https://www.youtube.com/watch?v=KaoYz90giTk )

  4. vivek says:

    why not to get TN design from north korea. they r money hungary and can provide all details in small amount of money

  5. KAUSTAV says:

    Sir, I am quoting a Services Officer here “Trust me…. I have interacted closely with Russians during the commissioning of Satpura.,.. Grade 1 chor hai saale…. And at the same time….. Indian scientists are supremely pathetic…. Indigenous systems take years to be proven …. So… It’s a lose lose situation for the faujis”

    Sir, The situation is as outrageous as that. Outright Import ensures Timely Quality and Cost-effective Delivery though not politically expedient. Nobody will ever sell /give you technology. You have to develop it yourself. The matter of Surkari naukri scientist is best left aside. Assembly of phoren maal just creates some PSU employment. If atleast MRO bases are built here more employment opportunities and technology base for SMEs would be built. Everybody, except Indian govt. does that. Russians are the worst, they have very poor on time delivery and poor after sales support.

    Most of our so called indigenous product just assembly of imported components anyway, whether P15/16/17/ Ships, LCA/ALH/LTA aircraft, Arjun Tanks and even trucks. Small and Medium Enterprises have to develop and manufacture machine parts on their own to develop a Military Industry Complex

    The Defence Services have the worst of it all….Fleeced by thieving Russians and unscrupulous arms traders… Indigenous products for which every critical part has to be imported or takes forever to mature….No worthwhile service and Overhaul facilities which means equipments lie idle or have to be sent abroad. Some low hanging fruit such as Radars, howitzers and small arms seem to be on the right track.
    – KAUSTAV

    • Yea, the DRDO, DPSUs, are bad, that’s why I have argued for incentivising the private sector defence industry to come in in a big way, take the Tejas LCA design from the ADA and run with it. The important thing is that the armament should be indigenously DESIGNED — design is the most important thing, India can always buy the assemblies and components from abroad — that fact of importing components is not important, better than importing whole aircraft, or tanks, or ships.

      • Kya says:

        Seeing how the vijay mallyas modis and lijes have incurredvlosses despite having major industries with them tells us that pruvate sector is not that efficient as is pushed by theiving capitalists in general.

      • Venky says:

        Our education system and work ecosystem does not exactly encourage creativity. Given this and for all their faults DRDO & DPSU are doing an Ok.
        It is a great idea to mate a lab and a Pvt co. The govt through MoD needs to in a way support the Pvt co through consistent orders atleast e.g. Arjun approach of stop and go production will not work. Tejas is lucky , the imports have proven expensive.
        There are also other issues. The military is still using a lot Soviet weapons bought at friendship prices. Now they are realising that imports cost hell of lot.
        This will bring about a change, though slowly , at a short term cost though. Till then we need to manage and build volumes of lower variety e.g.
        can we use C-295 as replacement instead of another transport for MTA ?
        Can navy build 6 ships of each class rather than 3 types now ?
        Each service should be asked to reduce variety by a certain percentage every decade. Will improve competence, reduce training , improve spares availablilty.

      • shankara says:

        instead of involving russians or funding T Pak Fa 6-8 billion
        india could 50:50% produce one more jet like tejas and let it be stealth pruchase radars and engines from usa and israel …we could have one more aircraft
        even pakistan has procured license production of j17 same way
        Gripen runs same way,,
        even F16 Lockheed martin does not hold all components TOT
        Russians for their needs also import some components like radars drones from israel
        india like china should invest on reverse engineering and maximum co production and indigineous production with private players rather than paying money to forign player create jobs localy maximum which ever area posible
        our leaders are not visionary

    • Kya says:

      Treachery against the only ally that India had in the middle east _that was Iraq.

      Yes, it was Iraq. When Advani was in a meeting in The White House with Condi Rice to discuss the possibility of Indian troops for Iraq war, George Bush “dropped in” to the meeting hoping that Indians have weakness for such symbolic gestures and hence would fall for it. And it seems to have worked. Advani did give some kind of assurance to the Americans regarding Indian troops. Oh did I mention that Bush told Advani he would do some “blunt talking” to Pakistan about cross border terrorism? 

      ——–**********************(((

    • Kya says:

      Russian help to ungrateful indians .

      Quote ” Although budget cuts resulting from plummeting oil prices have stalled efforts to upgrade its military, Moscow still hopes to achieve 70-percent rearmament by 2020.”
      All those countries targeted by Anglo American pirate race need to fork out money to give to Russia so that Russia and China can kill their common enemy the anglosaxon nations of 5 evil eyes.
      BTW do not give to India which has become traitor to her own interest in order to please their Anglo American masters.

      -_____************************

      First attempt of ISRO’s with Cryogenic engine for GSLV were unsuccessful in April 2001. After that, ISRO had tested 8 flights with Cryogenic engine; out of which 5 flew with Russian engine. The first successful test-flight using the indigenous engine happened in January 2014

      _______________________********

      ***(

      Now the unelected minister jetley has gone for sudden buying of Israeli missiles to the tune of one billion dollar over and above the 2.5 billion dollar worth of another Israeli cramp decided in last fortnight.
      No tender no discussion.
      Compare with 17 years that India is waiting for fighter planes.
      In favour to Israel is because the cookie type Indian elites think that butteressing Jews will please the Americans.
      Collie Indian elites do this all as bribe to USA to get their wards sons sons in law and dAughter as cyber collie working in great usa.
      For that India pays dearly in defence.
      Russia must not give s400 or t50 to india because the traitors on India will disclose the secrets to angloamericans whose pet dogs Indians are_one of hundred such dogs.

      _____*************************

    • Kya says:

      Indians and Gulf Arabs can’t be trusted because ever since the Anglo Saxons took control of them in the past centuries they have genetically conditioned them to become obedient servants to their Anglo American Masters. It is called eugenics.

      Uk and its extension aka USA know the mind of an Indian. They know how to please ( flatter to betray) them and DIVIDE them.

      India under American stooge elites can not be relied upon by Russia now.
      Russia must not give s400 or 5th gen planes to India.
      Each time Indian pm visits usa he bribes us with multi billion dollar worth of orders for American junnks.
      Now Indian elites are pi_m_ing for old obsolete f16!
      Let Indians fight with 70s technology.

      http://www.pravdareport.com/business/companies/24-10-2017/139016-india_fifth_generation-0/?utm_medium=referral&utm_source=idealmedia&utm_campaign=pravdareport.com&utm_term=68735&utm_content=2149978

      –************************(*((

      Modi has completely failed in foreign and military policy.
      Modi resorts to bribing Americans with worthless old military bunks a week before he goes to America.

      In Foreign and Defence policies Modi has been a complete failure just like previous pm.

      -=========_______—_________-

      Modi as an uncle Tom.

      One of the most remarkable difference between leader of 3rd world countries and that of so called first world is this _ when the first world leader gets a good majority then she or he used that mandate of people to dominate other nations in talk and negotiation in foreign matters.
      In fact most of the foreign ministers of 1st world are dire narrow minded nationalist who basically detest foreigners as shown in their behaviour. So they use the mandate as a source of power to open the foreign market for their nationalist agenda.
      Now when the leader of a 3rd world gets a majority or even a high margin win then she or he used that to appoint such foreign and finaive minster who is internationalist and on fact has no electorate base because he has not bothered to know or read about his own country.
      He is basically pro_foreigner.
      He would talk harshly to his own countryman but would genu flex before foreigners dignitaries _naturally he is already sold on the idea of using that people’s mandate not to press advantage in negotiation but to pressurise his own constituency and countrymen to accept foreigners’ demand to open his market to foreigners without reciprocal advantage.

      Modi Ji has a stern demeanour inside India he hardly laughs or smiles before Indians.
      But whenever he faces whites specially of English speaking variety then look at his body language _he is grinning with all teeth showing all the time.
      That is the body language of a servant.
      Either as a servant does before a mafter or like an idiot or an uncle Tom.
      Before he leaves India he makes sure that he has thrown tax payers’ money to the tune of one or two billion dollars worth of order junk military hardware from USA or its satellite state Israel.
      In other words he bribes Anglo Americans to buy friendship.
      In last 3 years the Indian air force has been starved to the extent that it is really a Camel air force now but there is no urgency for Modi . He may be even do the unthinkable _ ordering obsolete 60s’ design f16 just to please the Americans !

      –=========================

      Russia is already supplying India with the Sukhoi-30MKI, an advanced “fourth generation” warplane that consistently defeats its Western counterparts, such as the frontline US fighters, the F-15C and F-16. Versions of the Su-30 are also being sold to China, Venezuela, and Malaysia.
      besides if Indians can be so happy buying defunct American vessel Trenton then why can we not happy buying Gorveshov at much reduced price and distress =sell price of only 500 million in problematic for Russia 90s? ) . you do not treat friends with advantage on distress sell). Indian tried to be too smart-but they are really fools of the international arena-and then they blame Russia for not honouring its commitment#
      they are not grateful that Russia supplied them with most advanced mig-90 in those days with rupee payments.
      Indians insist on keeping defunct mig-21 and blame Russians for its reliability problem.
      At the same time we will accept any shit from americans and be grateful for that.
      .The UPA traitors ,lackeys of the USA[CIA], have made India lose her Sovereignty.
      Conclusion �Indians respect only those who hit Indians back with boots -such is the slave mentality of our elites.

      =============================================

      https://sputniknews.com/columnists/201704241052940823-cpec-multipolar-world-future/

      STUPID JEALOUS INDIA HAS TAKEN HERSELF OUT OF ONE BELT INITIATIVE AT INSTIGATION OF AMERICA

  6. Jon says:

    Clearly, if you analyze deeper, it seems like a ploy by the current govt to give HAL more time to mature the Tejas. If Tejas matures further in the next 3-4 yrs, cancel it completely and load up more Tejas. If not, carry on with the foreign acquisition. Not bad.

  7. Kya says:

    A good response by President Putin

    https://www.rt.com/news/420206-russia-strategic-weapons-putin/

    Listen to us now’: Putin unveils new Russian nuclear arsenal

    Published time: 1 Mar, 2018 15:39

    • sanman says:

      I’m very curious about the nuclear reactor and propulsion system used for Putin’s new “nuclear-powered cruise missile”. Is it some micro-sized nuclear reactor which is spinning a turbo-fan for propulsion? I’m guessing that the same reactor is also being used to power the long range torpedo weapon – therefore it would have to be a closed-cycle nuclear reactor. What other characteristics can be inferred on this? Would India ever find benefit from such small micro-reactor-powered weapons, say against China?

      • Kya says:

        Why should russia share now the secrets of this weapon for indian cooli race like you who worship anerica and why would russia wabt it ti be used against china.
        Induans are liser coolie race as shown by the likes of you .
        Russia must now stop giving any weaponary to treacgerous induians.
        This i say as a patriotic Indian.

  8. sanman says:

    On a more fundamental level of procurement, Trump seems to have suddenly announced 25% tariffs on steel and aluminum. Is this swadeshi move in preparation for a coming Korean war, which may wreck relations with steel mega-supplier China?

  9. Warrior says:

    Sir,

    Good article to read. One thing that I noticed in this article is about the numbers.

    Can you please help us understand how you reached with the number of Rs.8,212 crores per plane for spares?

    I did some digging around for numbers which are available in open source and most of them say about EUR 1.8 bn for spares/infrastructure and about EUR 353 mn for Performance based Logistics…so using that total as the base and a 4% compounded cost escalation per annum (the 2007 contract agreed for 3.9%,new contract is less) it comes about about Rs.1,275 crores per aircraft over a 25 year period…

    May be there is something wrong with my understanding or the way I calculate it so it would be great if you can help me understand this number of Rs 8,212 crores…

    I am attaching the links that I used for reference below
    1) http://indianexpress.com/article/india/rafale-fighter-jet-deal-modi-government-rahul-gandhi-congress-5082298/
    2) Check the comments in this link for the numbers :
    http://www.frontline.in/cover-story/new-smoking-gun/article10084886.ece

    Thanks

    • The unit cost, per govt figures of Rs 670 crores subtracted from the total cost per plane, including spares support for the 1st 10 years of Rs 1,640 cr is Rs 970 cr. The Rs 970 cr of spares support (and, presumably, also refit) if calculated to rise exponentially over the next two-and-half decades gets the Rs 8,212 cr per Rafale.

      • Warrior says:

        Thank you sir for your detailed reply. Please dont mind me raising 2 issues realted to the numbers here again

        1) So if I take your numbers you are considering about 8.92% cost escalation per year while the even the 2007 contract if what I read is true mentions cost escalation at 3.9%

        2) Second one is this – Rs. 970 crores per plane, if open source figures I quoted above are to be believed also include the costing for India specific changes and the weapons cost (Rs 353 cr and Rs 276 cr per unit if I take your exchange rate of Rs.74.73) but wouldnt that be a broad sweep assumption because these 2 wont be part of the maintenance cost?

        Hope you dont mind me pointing these out, while I agree with your argument that the maintenance cost is very high compared to the actual cost of the aircraft I just feel the numbers you projected are a higher than what it should be…

        PS: I dont have actual experience to say how these maintenance numbers play out in real life and I also dont have any others numbers to compare and say if this is higher or lower than standard…

        Thanks

  10. &^%$#@! says:

    If true, this is great:”In February, sources within the Defence Ministry had indicated that India was no longer interested in a class of single-engine fighter other than the Tejas…..”

    https://www.ndtv.com/india-news/government-commits-for-new-variant-of-tejas-fighter-future-for-gripen-and-f-16-unclear-1819238

  11. vivek says:

    want to know if using ICF will really help to enhance TN design without doing actual test?

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