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Dassault union papers refer to Reliance JV as part of ‘Make in India’ policy.

Reliance’s joint venture with Dassault has been at the centre of a political storm since France’s former President Francois Hollande’s statement that the Anil Ambani-owned firm was chosen as an offset partner as part of a “new formula” by the Indian government.

Documents of meetings in May 2017 between trade unions of Dassault Aviation with its senior official, Loïk Segalen, have referred to its joint venture with Reliance as “an unavoidable consequence of the Rafale India contract” and the “Make in India” policy.

Reliance’s joint venture with Dassault has been at the centre of a political storm since France’s former President Francois Hollande’s statement that the Anil Ambani-owned firm was chosen as an offset partner as part of a “new formula” by the Indian government. These documents were put out by a former French defence official, Yves Pagot, on Portail-Aviation website in his personal capacity while refusing to draw any conclusions. Pagot noted that these documents are “the union summary of a meeting” (mandatory under French law), presenting the effects of the “offsets” imposed on the defence contract and the “Make in India” policy.

One of the documents posted by Pagot was referred to in the report of the website Mediapart last Wednesday, as reported by The Indian Express. “It was urgent (imperative) and vital (obligatory) for Dassault Aviation to secure this partnership (with Reliance) to obtain the export contract for RAFALE India,” the document notes Segalen telling the Dassault union on May 11, 2017.

The second document has a more detailed briefing by Segalen. Sub-titled “A new undertaking Dassault Reliance limited (DRAL)”, it states that “it is an unavoidable consequence of the Rafale India contract which insisted on ‘Make in India’ clauses in order to be signed”.

The note states: “A joint venture has been created with the Indian company Reliance to achieve this objective. Dassault Aviation will hold stakes of 49% and Reliance a majority of 51% The co-drivers are none other than the CEOs of the two companies, Mr Trappier and Mr Anil Dhirubhai Ambani and, in the event of the team being headed by an Indian (Managing) Director, then his counterpart will be the Chief Accountant /Head of Industrial Operations), Mr Jean Robert Luc (formerly head of the company, Biarritz).”

The note also says that “the site, currently undeveloped, is in Nagpur…. An initial building site of 1,800 m, followed by a second of 11,000 meters, is planned. Mr Luc has been delegated to undertake an industrial plan in 5 stages, spread out over 5 years, each stage approved before commencing the next.”

“Everything is moving ahead fast as the start of operations is scheduled for the end of 2017, and it is expected that by 2022, Falcon 2000, notably, will be in production. One way of contributing towards lowering the cost of production, while respecting the agreed terms, would involve industrial compensation at 50% of volume of Rafale orders,” it states.

Last month, the Defense Ministry invoked “issues of conflict of interest involving persons close to the former President (Holland)”. The government, the statement said, had “no role in selection of Reliance Defence as the offset partner”, and “as per Defense Offset Guidelines, the foreign Original Equipment Manu-facturer is free to select any Indian company as its offset partner”.

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