Unfounded Allegations

Source: The Hitavada      Date: 20 Feb 2018 11:31:43

THE National Democratic Alliance’s (NDA) silence on possibly one of the biggest defence deals has somehow led the United Progressive Alliance (UPA) to believe they have something to hide. A massive purchase of 36 Rafale fighter jets, a 7.88 billion Euro deal - one cannot possibly understand the contours of this deal at first glance.

However, as the officials behind this deal refute and rebut each accusation that has come their way, the ambiguity eases and the facts emerge. India, in 2015, announced to buy 36 twin-engine fighter jets for its Air Force from Dassault, the French aircraft builder and integrator. The current rounds of allegations are manifold ranging from the actual pricing of these aircraft to why no prior permission of ‘Cabinet Committee on Security’ was taken by PM Narendra Modi and so on. The Ministry of Defence (MoD) sources explain that the price of a single flyway Rafale aircraft in the 36 Rafale Inter Government Agreement (IGA) signed on September 23, 2016, works out to about 92 million Euros. The total price of the deal--which also includes India Specific Enhancement (ISE) weapons package, simulators, PBL support spares, AMC of simulators for 10 years, GSE/ GHS etc. and maintenance support setups at both bases for both aircraft and weapons and training of IAF pilots and engineers--is around 7.88 billion Euros. When asked why the Government is not disclosing the purchase price details, MoD officials revealed that the IGA signed on September 23, 2016 has a non-disclosure clause, which has been drafted in accordance with the provisions of the ‘Security Agreement’ signed by the UPA Government with France on January 25, 2008.

“Disclosure of the exact item wise price will not only result in revealing the details of the purchased package but would also be in violation of non-disclosure agreement signed by the MoD,” they said. The IGA is valid for 50 years from the date of signing i.e. till September 22, 2066. “The France Minister’s concerns stems from the fact that our adversaries could benefit from the item-wise price disclosure in a sense that it would reveal the exact weapons and quantities being purchased. It would also violate the NDA signed by MoD/IAF with Dassault Aviation,” they added. Allegations levelled by the UPA said that the per aircraft price of Rafale as per international bid opened on December 12, 2012, comes to US $80.95 million (Rs 526.1 crores) as against Modi Government’s price of each aircraft as negotiated by the Modi government--US $ 241.66 million (Rs 1570.8 crores) as per current exchange rates. It was further alleged that another country, Qatar, purchased 12 Rafale fighter jets in November 2017 for US $ 108.33 million per aircraft (Rs 694.80 crores) as per current exchange rates. If this is correct than why has Modi Government paid such a high price for Rafale aircrafts? Rubbishing all such claims and calling them “grossly incorrect” the officials said that firstly, the tender was opened on November 4, 2011, and not on December 12, 2012.

Secondly, the MMRCA Contracts Negotiation Committee (CNC) had determined the per flyway Rafale price at around 102 million Euros. If escalation factor is added between 2012 and 2016 price, the per aircraft price becomes around 107 million Euros. This, they said, is around 16 per cent costlier as compared to the per aircraft price in the 36 Rafale contract, 92 million Euros.

“The price comparison is on apple to apple bases in terms of deliverables,” an official said. They added that the CNC constituted to negotiate 36 Rafale IGA, had clearly brought out in its report that the price finalised for the 36 Rafale procurement is better than the price fixed in both Egypt as well as Qatar deals.

“Egypt bought 24 aircraft at rate of Euros 5.2 billion per aircraft. For same number of aircraft, Qatar Air Force has paid Euros 6.3 billion. Clearly, both the countries have a price which is much higher than India,” he added. Another question being asked is why Rafale? When Rafale and Eurofighter Typhoon, both aircraft were found equal on all technical requirements by Indian Air Force, why is it that the Government went in for Rafale? In fact, On July 4th, 2014, the German make Eurofighter Typhoon even gave a written offer to the then Finance Minister, Arun Jaitley offering to reduce prices by 20 per cent. Why did PM Narendra Modi and Defence Minister then not ask both companies to submit fresh bids through ‘inter-governmental agreement’ route and get the lowest price.

Officials said that EADS which had offered Eurofighter Typhoon, emerged as the L2 vendor on January 31, 2011, in the MMRCA procurement process. “Barely 10 days after that, EADS had submitted an unsolicited letter to the UPA Government claiming to provide 20 % discount on certain lines and not on their entire offer. The MoD at that stage took a decision not to consider the offer as it was seen as incoherent and not adding up,” the officials said adding that even the DPP does not permit submission of any counter offer by the L2 vendor. And it was for these very reasons, the officials said, the then UPA Government’s Raksha Mantri A K Antony had decided to not take into cognisance the offer of EADS. The same offer which was earlier rejected by the UPA Government in 2011, was again made to the MoD in July 2014. (INAV)