Indian auditor says Rafale jet deal cheaper than original
Rahul dismisses CAG report on the deal as ‘eyewash’
India’s federal auditor said yesterday that 36 fighter jets bought from France’s Dassault Aviation were cheaper than an earlier local deal, offering respite for Prime Minister Narendra Modi.
Modi’s 2016 decision to abandon talks on buying 126 Rafale planes, including local production, and instead order the 36 French jets in flyaway condition has drawn political fire from Modi’s rivals, alleging wrongdoing in a deal estimated at $8.7 billion.
The Comptroller and Auditor General (CAG) said in a report submitted to parliament yesterday it had done a cost analysis and found the new contract saved 2.86 per cent on the earlier deal.
Meanwhile, Congress President Rahul Gandhi dismissed as “eyewash” the report on the deal and contended that two major claims made by the government of cheaper deal and faster delivery of aircraft stood demolished because of the dissent report of three members of the Indian Negotiating Team (INT).
He referred to the views of the experts in INT on the Rafale deal and said “the two pillars of the Modi government’s defence for the aircraft deal, of cheaper deal and faster delivery, stand demolished”.
“Experts who were part of the negotiating team have said Dassault Aviation (Rafale maker) has an order backlog of 83 aircraft and with a capacity of manufacturing only 11 aircraft per year it will take eight years to clear the backlog. Thus, India will get its first Rafale much later than what was scheduled in the UPA deal.”
However, Modi’s Bharatiya Janata Party said Rahul’s “lies” on the deal have been caught, and demanded an apology from him.
The Rafale fighter jet deal sealed by Prime Minister Narendra Modi’s government in 2016 is 2.8 per cent cheaper than the one negotiated by the previous Congress-led United Progressive Alliance (UPA) government in 2007, a report submitted by the Comptroller and Auditor General (CAG) yesterday says.
The report, which does not include the key point of pricing, was tabled in the Rajya Sabha (Upper House of Parliament).
According to the report, India managed to save 17.08 per cent for the ‘India Specific Enhancements’ in the new contract, compared to the 126-aircraft deal negotiated by Congress.
“India wanted 13 specific changes to the Rafale jet to make it more suited to the country’s defence parameters. The cost of these upgrades is far cheaper in the new deal. The aspects of the deal that are more expensive include engineering support package and performance-based logistics,” the report said.
‘No guarantee’
The report reveals that both the French government and French military aircraft manufacturer Dassault Aviation did not agree to furnish any guarantee — be it bank, sovereign or performance — in the 2016 contract signed with the Indian government.
Instead, the French government provided a letter of comfort signed by its PM.
However, Dassault’s offer to the previous Congress government had included a 15 per cent bank guarantee against advance payments, as well as five per cent each for performance guarantee and warranty.
“In the 2015 offer, the French vendor did not furnish any Financial and Performance
Bank Guarantees. Since about 60 per cent of advance payments were to be made to the French vendor, the Ministry of Law and Justice advised that Government/Sovereign guarantee should be requested in view of the value of the proposed procurement,” the CAG report said.
But the Modi-led Cabinet Committee on Security overruled the concerns put forward by the Law Ministry and accepted the letter of comfort from the French PM.
The report said the 2007 offer included transfer of technology to Indian defence manufacturer Hindustan Aeronautics Limited (HAL) for the production of 108 fighter jets but no such transfer of technology was provided under the 2016 contract.
Defending the deal, the
Modi government has been maintaining that the Indian Air Force (IAF) needed immediate supply of the fighter jets and hence the contract could not have been delayed.
Congress leader Manish Tewari described the report as “strange” as it did not reveal the price of the Rafale jets.
“This report is not worth the paper it is printed on. If CAG has not revealed the price, then what have they audited? 2.86 per cent of what? What was the UPA price? What was the NDA price?” he asked.
Tweeting on the report, former Finance Minister Yashwant Sinha said, “Nobody knows the price of Rafale fighter planes yet we are told to believe that the new deal is cheaper.”
Bahujan Samaj Party chief and former chief minister of Uttar Pradesh Mayawati dismissed the CAG report as fictitious.