Editor's Note: A video of US Congresswoman Alexandria Ocasio-Cortez dissecting US campaign finance laws went viral on social media last week. Here is an AOC-style explainer for some much-needed insight about the controversial Rafale defence contract.
Let's play a lightning round game.
I am going to be a really really good guy, which I believe half the room would agree with anyway. I mean, can a corporation be anything but good!
And I want to do as many good things as possible, ideally to enrich and advance the interests of this country, even if that means putting the interest of the people of India ahead of my company. To this end, I’ve enlisted all of you in this room as my co-enablers. So all of you are going to help me, legally, to do this.
So, respected defence minister (DM), I don’t have many avenues to be good now. I heard that defence manufacturing is being opened up to the private sector. I now, become the sole private defence manufacturing company. Is there anything legal which allows me to do that?
DM: Of course. Our Defence Procurement Procedure is fully compatible with your dream.
But though I am a good corporation, I have no expertise whatsoever in defence manufacturing, unlike let’s say other private corporations such as L&T and Tat or PSUs like Hindustan Aeronautics Limited. But I am damn serious about clinching this contract. What worries me is that the last time Dassault was shortlisted for manufacturing 106 Rafales, it took close to a decade. It involved a complicated bidding process and in the end, the lowest bidder got the deal. This is such a lengthy process. Where does it leave somebody like me? Isn’t there a legal way for us to avoid this complete process? Where somebody like me gets access to the know-how from a foreign vendor but also gets the contract.
DM: The new DPP allows for government-to-government contracts. We can either have a close in on a single vendor or a multi vendor contract.
You are right, I think it would be best if I tie up with somebody outside the country. A country like France, you know, whose only defence manufacturer is Dassault and hey, we already are friends with Dassault! It would be so simple if we could just tie up with France! But how will I tie up with Dassault?
Our 2016 edit of the DPP introduced a brand new initiative called ‘strategic partners and partnerships’. Private corporations in India can now tie up with foreign vendors and bid for defence contracts. It is totally possible.
So there is nothing stopping me! Okay. Let's say I am a really really good guy. But I have some skeletons in my closet that I need to cover up so that I can bag this deal. Like I have no money. I am almost bankrupt. But I, in my heart of hearts, want to do some good. And believe me, nobody can do as much good as me! But this will never happen if people get wind of me entering into this.
Law minister (LM): Arre baba, why don’t you read the new DPP! The foreign vendor now doesn’t have to disclose who its offset partner is. Nobody in India will know you got the deal. Even we don’t have to be informed who the apply of the foreign vendor is. It is totally up to them!
Fabulous. This means I can do all sorts of good things, it is absolutely legal for me to not have expertise but still be the front-runner in bagging these deals. People wouldn’t even know about my role. The government doesn’t have to do any due diligence on the Indian company which is bidding; it is wholly the responsibility of the foreign vendor, right?
Great. Now let's say I have entered into an agreement with the foreign vendor and both of us have set up shop to build fighter jets in India.
They have been negotiating for more than a decade anyway. They almost finalised their deal to work with HAL in 2014 but thanks to the newly edited DPP, they can now just enter into a joint venture with me. Both of us can run the show. And I’ve got the power to acquaint myself with all the know-how of these machines which are so crucial to the defence of this country.
I use my GoodInterestFighterPlaneBuildingPlan to monopolise defence production. This will lead to many PSUs becoming almost obsolete. I mean how good were they anyway? Strengthening them would have been pointless. Strengthening me, on the other hand, is in the interest of this country. I have the foreign dimaag and the government’s money.
But wait, how do we decide how much the deal is going to cost? And what the conditions of the deal are?
What are my obligations? Will France offer indemnity for the deal?
DM: Of course they will have to. And no you can’t be involved in vetting the costs, now that is the job of the pricing committee of the Defence Ministry. You’ll have to leave it to us.
Now, the last thing I want to do, in addition to all the good I am doing, is to make my corporation the main player in the industry with as little work as possible. So, respected law minister, does the DPP limit the number of deals a single corporation can enter into?
LM: There is no limit.
So there is no limit. I can totally use this deal to elevate myself to more deals in the future since anyway, I have kicked open the entry of the private sector. I can now start manufacturing fighter aircraft, submarines, helicopters and armoured fighting vehicles, basically everything the DPP allows private players to do.
So, we have a DPP which can make all the defence PSUs almost redundant, choose any corporation – like mine – for any contract and nobody would even know I am the one behind the biggest contract in the country because the DPP gives me that confidentiality? All in the interest of the country, of course?
Thanks law minister and defence minister. It is going to be a pleasure serving this country with you.
My josh is high.
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Updated Date: Feb 15, 2019 15:38:35 IST