NDA’S Rafale deal is 2.86% cheaper than old one: CAG

QUESTIONS REMAIN Report says Dassault benefitted due to absence of guarantees; Oppn and govt renew war of words

NEWDELHI: The Rafale deal signed by the Modi government to procure 36 fighter jets from France’s Dassault was 2.86 per cent than what was negotiated during the previous UPA regime in 2007, the much-awaited Comptroller and Auditor General (CAG) report on the controversy-hit transaction showed on Wednesday.

Without disclosing pricing details in absolute terms, the CAG also said the deal was 6.54 per cent expensive in terms of engineering support package and performance-based logistics for the Indian Air Force, while the training costs has got 2.68 per cent expensive than the 2007 offer.

The CAG also flagged the drawbacks of settling for a ‘Letter of Comfort’ rather than a sovereign guarantee by the French government and said Dassault benefitted due to absence of such guarantees.

The report, however, was silent on the issue of offset partners, which has been a key point on which the Congress has been attacking Narendra Modi-led government and has been alleging corruption in Anil Ambani’s Reliance Group getting one of the offset contracts.

Soon after the report was tabled in Parliament, Union minister Arun Jaitley said the lies of the Congress and Opposition parties stand exposed as the CAG The CAG report looks at 11 purchases of the air force, including the Rafale deal. The bottomline of the report (that the deal struck by the NDA was cheaper than the UPA’S) should make the government happy. But there’s enough in it for the Opposition to keep up protests

Is the NDA government’s Rafale deal better than UPA’S in terms of price?

The two deals are largely the same, although the NDA’S is 2.86% cheaper than the UPA’S after taking into account factors such as the price escalation over the years. Some components, for instance the so-called India Specific Enhancements were less expensive in the new deal, but others, such as the Engineering Support cost, were higher. On the basic aircraft itself, CAG found no difference in price between the old deal and the new one

What about govt’s claims that the new deal gets the

report outlines that 2016 deal terms were lower in terms of price, faster in terms of delivery, while ensuring better maintenance and lower escalation.

Congress president Rahul Gandhi, however, said the CAG report does not mention the dissent note by negotiators and said he doesn’t think it’s worth the paper it’s written on.

On India-specific enhance-

basic jet 9% cheaper?

CAG doesn’t see it that way. It believes the government arrived at this price by comparing a fixed price (usually higher) with a non-fixed price

So, the government is vindicated?

Yes and no. There is enough substance in the report for both sides to spin. For instance, the UPA’S 2007 deal had Dassault Aviation providing performance and financial guarantees totalling 25% of the value embedded in it. The 2016 one did not. CAG says this resulted in a saving for Dassault that was not passed on to the government of India

ments, CAG said the NDA deal was 17.08 per cent cheaper than the one negotiated by the then UPA government in 2007, while the weapons package offered in the new deal was 1.05 per cent cheaper, the 157-page report said.

For the overall price, the CAG has said the new deal is 2.86 per cent cheaper.

Defence minister Nirmala