The US government has formally cleared the sale of six AH-64E Apache attack helicopters for $930 million to India for the Indian Army. In addition to the aircraft, the deal includes night vision sensors, GPS guidance and Hellfire anti-armor and Stinger air-to-air missiles. Virtually, even before the ink has dried, questions are being raised about this deal and its cost-effectiveness. They clearly insinuate that the government of India is paying far more for the Apaches than the cost of procurement by the US government. At the outset, yes. It will have to. Firstly, they are being procured in 2018 and not two decades or more ago, when the US government started procuring them.
Secondly, the US government has technology and intellectual rights over it. The Apache is a US government-owned product. Hence the cost to itself will be the least. In case we must get such sophisticated war machinery at low cost, we – as a nation – should have invested in getting hold of this technology long back.
Our governments through the years have neglected this aspect. All parties are culpable to that extent. No point griping sanctimoniously today. We must play our hand with the cards we have.
Having said that, I think there is some haze to be cleared before the impression stays that we are paying an exorbitantly outrageous cost. The impression is being created through part-truths and inadequate background details. Hence the public at large will form the impression that some dubious dealings are on. There seem to be clear political motives behind these insinuations and innuendos to pin the current government down.
I really could not care less about multi-cornered and colorful political motives and games which are continually on in India. I am also not bothered about the party in power. But when it comes to national interest and defence procurement we must back the government of India irrespective of the party in power.
There is a need to rise above political interests – and be objective and professional. Otherwise, this deal could come undone and India will remain in square one.
The Centre signed a contract for 22 Apache helicopters, along with 15 Chinook heavy-lift choppers in 2015 for the Indian Air Force. The deal was inked at a staggering 3.1 billion dollars. The first delivery is to take place next year. The contract had an option clause for India to purchase 11 additional helicopters if required. The six helicopters being bought now are under that option clause – 50 percent as repeat order of the option clause of the previous deal. The whole behind the option clause is protection of cost. Hence, there should be no complaints.
Take a step back and understand the deal better. India has been in talks with US for more than a decade for the 22 IAF Apaches. These were to be procured as a combination of a Direct Commercial Sale (DCS) contract and the US’ Foreign Military Sales (FMS) programme. The deal acquired some tangibility when cost negotiations commenced in 2012-2013. Cost negotiations were completed in 2014 and the contract signed in 2015. There were no questions then. Why now?
Interestingly, this deal has been worked out on a government-to-government basis between the US and India. It has been dealt by two administrations in the US – of Barack Obama and Donald Trump and two governments in India – UPA and NDA.
One deal is an extension of the other. The first deal’s costs became the basis for the second. In India, it has been handled by two services – IAF and Indian Army. The deal has gone through many hands and viewpoints for any trouble to brew. Also, if cost fluctuation has crept in, it would have been highlighted and thrashed out to mutual satisfaction.
To claim now that we are overpaying is a bit hard on the imagination.
Why do I say this? The FMS procedure of the US is well laid-out and standard. For instance, there is no cost negotiation. The US government quotes costs as per a standard formula – which is pretty much the negotiated cost at which the US government would have acquired plus charges/profit of Washington DC.
They are based on initial and incremental costs over a period, as quoted to other agencies and countries. These are vetted by the Congress and Senate and approved. If there is any deviation in costs or laid-down methodologies, people are taken to task.
Having dealt with two FMS cases in detail during service (M777 ULH and ANTPQ WLR), I have realised the US government’s negotiators can neither undercharge or overcharge. According to procedure, we would have given them a Letter of Request (LOR) which is equivalent to a RFP.
That would have contained all our requirements and details, including the numbers. They would have responded with a Draft Letter of Acceptance (LOA). Here, each item which has been sought for in the LOR would have been costed in detail – literally to the last nut and bolt – line by line.
The cost of each item sought by us will be clear and transparent. The draft then passes through a fine toothcomb by both sides and a final LOA is arrived at on a mutually accepted basis. The final costs vary based on discussions as to how many spares are needed and to what extent services should be taken.
Most importantly, the FMS deal comes with the sovereign guarantee of the US government. Incidentally, the Washington DC bureaucracy is as worried about any dubious dealings emerging in the deal as we are.
In fact, perhaps more than us. In my dealings with them, I found that they were relaxed and comfortable to engage with government servants. They always used to be guarded and tense whenever dealing with or in presence of defence contractors as our officials are. The thought which used to come to my mind was “Sabko apna naukri pyari hai!”
Therefore, I believe the government should put to rest doubts by releasing details about the deal in some more measure for public consumption. If needed, they can invite the Parliamentary Standing Committee of Defence to vet the costing.
The haze would then be clear. To all doubting Thomases and muckrakers: We are getting some real capability after a long time. For heaven’s sake, rise above narrow political brownie points! The man on the ground needs his machine.
Source Link: CLICK HERE