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Rafale Jets: NDA's Deal 2.86% Cheaper Than UPA's, Says The CAG Report

PRERNA YADAV | 0
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| February 13 , 2019 , 14:17 IST

The Rafale fighter jet deal signed in 2016 was 2.86 percent cheaper than the UPA's deal in 2007, revealed Comptroller and Auditor General (CAG) in its report tabled in Rajya Sabha today.

The much-awaited CAG report on the Rafale defense deal was tabled in the Upper House, even as Congress president Rahul Gandhi and other leaders protest outside Parliament. The protesters could be seen throwing paper planes with pictures of PM Modi. Former PM Manmohan Singh and UPA chairperson Sonia Gandhi were also present.

The CAG report, however, adds that the ministry had argued in 2016 that the contracted price was nine percent lower than the 2007 price. 

The 141-page CAG report has mentioned that the flyaway price of the jet is the same as agreed in 2007 by the UPA government.

A Defence Ministry team in March 2015 recommended the scrapping of the 126 Rafale deal, saying that Dassault Aviation was not the lowest bidder and EADS (European Aeronautic Defence & Space Company) was not fully compliant with the tender requirements.

Finding issues in the UPA era 126 aircraft deal, CAG says Defence Ministry team had said in 2015 that the proposal of Dassault Aviation Rafale should have been rejected in technical evaluation stage itself as it was non-compliant with RFP requirements, reports ANI after breaking down the details of the CAG report.

A report in The Hindu states that the three officials, who were domain experts on the seven-member Indian Negotiating Team (INT) for the Rafale deal, had concluded that the delivery schedule of the first 18 of the 36 flyaway Rafale aircraft “was slower than the one offered for the 18 flyaway aircraft in the original procurement process”.

The officials had also pointed out in their eight-page note that the cost of the deal was 55.6 percent higher than the benchmark price finalized by the INT. The benchmark price, which is discovered in advance by financial experts to act as a ceiling for the whole package, was set at €5.06 billion. However, the dissent note revealed that the final price for the whole Rafale package shot up to €7.87 billion.

The three experts – MP Singh, Adviser (Cost), a joint secretary-level officer from the Indian Cost Accounts Service; AR Sule, financial manager (Air); and Rajeev Verma, joint secretary & acquisitions manager (Air) –recorded their views in a strong note of dissent on June 1, 2016, The Hindu reported.

The note was submitted to the Deputy Chief of Air Staff (DCAS), who was the chairman of the negotiating team, at the end of Rafale negotiations. They also voiced serious concern over the government agreeing to a letter of comfort from the French government instead of a sovereign or bank guarantee, offset issues, legal issues relating to the Inter-Governmental Agreement and Dassault Aviation’s restrictive trade practices. The dissent note further gave details of how the final price for the whole Rafale package shot up to €7.87 billion, or Rs 58,000 crore.

The CAG report on the Rafale deal is learned to have offered a comparison of the cost of the French fighter with offers made by a competitor, the Eurofighter Typhoon jet, manufactured by a consortium of European firms. Both Rafale and the Eurofighter Typhoon fighter jets met the requirement of the Indian Air Force and were shortlisted from among six contenders.

The other contenders were the single-engine US-made F-16 and F-18 Super Hornets, the Swedish Gripen, and the Russian Su-35. After the bids were opened, EADS offered a 20% discount on the deal for 126 Medium Multi-Role Combat Aircraft (MMRCA) to the National Democratic Alliance (NDA) government. The discount was offered in comparison to the price it originally quoted in 2008 and re-quoted in 2010. But the Modi government scrapped an old deal and, in 2015, announced a government-to-government deal with France to buy 36 Rafale aircraft in a flyaway condition, reportED Hindustan Times.