Before Rafale deal, Modi government chose PSUs over Reliance Defence in Russia

The Economic Times, September 01, 2018

 Before it signed up for the Rafale fighter jets offset deal that has now become controversial, Anil Ambani’s Reliance Defence attempted to bag contracts from Russia, India’s old defence partner, but lost out on three major deals. Unlike France, Russia after consultations with India chose to partner with public sector units including Hindustan Aeronautics Ltd, which will set up a production line for the $1 billion Kamov KA226 light helicopter. In similar fashion to the Paris trip in April 2015 where the Rafale pact was first discussed, Ambani was present during the prime minister’s visit to Moscow in December of the same year, batting for major contracts with Russia for his newly formed defence companies. The Kamov contract was the first to be formalised during the visit. While Reliance Defence was in advanced talks to partner the Russians in the preceding months, Russia decided to go the PSU way. HAL is a known partner for Russia as it already makes the Sukhoi aircraft. The Russian side, sources said, was adamant that the private sector entity should be “government approved” for it to be considered. Reliance Defence did not meet this criterion, given that the government does not officially recommend or nominate any private sector company.

In fact, three months prior to the signing during the December visit, Russia had informed the defence ministry about an understanding with Reliance Defence for a possible partnership. But it did not progress after HAL was nominated for the deal. During the same visit, the procurement of four frigates for the Indian Navy at an estimated cost of $2.5 billion was also agreed upon by the two governments. Talks With USC to Build Warships Reliance Defence was in talks with the Russian United Shipbuilding Corporation (USC) to be the Indian partner for building these warships. The company had even tied up with a Ukrainian firm that made the engines for the warship. While Reliance Defence was chosen as the preferred yard by USC, the government did not process the contract under competitive bidding, instead nominated the state-owned Goa Shipyard Ltd (GSL) for the deal. The contract however is yet to be inked and will come up for discussion during president Putin’s upcoming visit to India in October this year. “In case of four 1135.6 frigates, after inspection of different shipyards in the public and private sector, USC had identified RNEL as the preferred partner. However, instead of a competitive process, it was a decision of the MoD to award the contract to GSL on nomination basis,” a Reliance spokesperson said in response to an ET query. Perhaps its most ambitious plan in Russia was to partner with Almaz Antey, the manufacturer of the S 400 missile defence system, to execute the offsets for the mega deal. During the PM’s Moscow visit, Reliance Defence even entered into an agreement with the Russian entity for the deal worth Rs 39,500 crore. However, as reported by ET earlier, the Indian government decided not to impose the otherwise mandatory 30% offset clause for the S 400 deal, removing any possibility of Reliance Defence being a part of the contract execution. The waiver was given after an express request by the Russian side that argued that because the S 400 is a highly sensitive and advanced system, the offsets clause needs to be removed for timely delivery. 

While Reliance Defence did not meet with any success in Russia despite repeated efforts, it tasted its first major victory in the defence sector in October 2016, when it announced a new joint venture with French aerospace giant Dassault Aviation to target business from the offsets for the Rafale contract.

Comments

Post a Comment

Popular posts from this blog

India Joins Russia in Voting Against West-Backed Move to Expand Powers of OPCW

The Wire: June 28, 2018 New Delhi: India voted against a UK-backed move that will allow the global chemical weapons watchdog to apportion blame for illegal attacks, criticising the decision to grant “unchecked powers” to the head of the group which could be used for “partisan” purposes. On Wednesday, more than two-thirds of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW) voted to authorise the international body to identify the perpetrators and sponsors of a chemical weapons attack. It also specifically called on the OPCW’s technical secretariat to begin work on identifying the perpetrators behind the use of chemical weapons in Syria. The draft decision, sponsored by 30 countries, was adopted at the fourth special session of the conference of the states parties to the Chemical Weapons Convention at the Hague, with 82 in favour and 24 negative votes. While Europe, the United States and their allies voted ‘yes’, there was strong oppo...
Read more

As financial insecurity rises in urban India, so does investment in insurance

Image
Scroll.in March 13, 2020 Urban Indians are becoming less confident about their financial security. Up to 58% of them fret over financial independence post retirement, which is a 4% increase from last year. An equal share of urban Indians worry about meeting their daily medical expenses and sustaining their current lifestyle once they stop working. The findings are part of a survey published by Delhi-based Max Life Insurance in association with London-based consultancy Kantar. The firms surveyed 7,014 respondents in 25 cities, including six metros, nine tier-1 cities, and 10 tier-2 cities, between December 2019 and January 2020. Source: Max Life Insurance via Quartz The trends Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz A significant share of urban Indians also say their families will have no financial support in the event of the breadwinner’s death. In such a scenario, around 57% believe the family sav...
Read more

ED tracks Swiss Bank A/Cs of Agusta scamster

The Poineer February 10,2019 Rakesh K Singh The Enforcement Directorate (ED) has tracked a dozen Swiss bank accounts in the name of Rajiv Saxena, who is key accused in the Rs 3,600 crore AgustaWestland VVIP chopper scam. The ED has also found out accounts held by  his family members and associates where the kickbacks in the now scrapped deal were allegedly parked. Two bank accounts are in the name of Rajiv Saxena’s  associates Pankaj Jain and Sumita Jain who are also the authorised signatories. The  third is in the name of another associate Ajit Singh Bubber, but Rajiv and his family members are authorised signatories. The remaining nine accounts are largely owned and operated by Rajiv, his family members and associates. Rajiv Saxena was deported by the UAE authorities on January 30 and the ED formally arrested him the next day and a court later granted his remand to the agency. He is currently undergoing custodial interrogation by the ED. The agency had in 2017...
Read more