1. Home
2. Editorial

Questions over Rafale deal

Kashmir Times. Dated: 2/15/2019 1:27:38 PM

The CAG report debunks the claims of the BJP-government on negotiating a cheaper deal for Rafale jet fighters

The Comptroller and Auditor General (CAG) report on Rafale jet fighter acquisition deal is finally out and tabled in the Parliament on Wednesday has raised more questions about the claims made by the BJP-government on this issue. The National Auditor has debunked the claims of the Defense Minister Nirmala Sithraman of having secured the Rafale jet procurement 9 percent cheaper than the one negotiated by the previous UPA government in 2007, the year the first negotiations began with the French company. The year was marked by political upheaval in diplomatic circles when the US ambassador resigned owing responsibility for not securing the contract from India on purchase of fighter jets. It was forgotten soon because the US envoys started working on other projects which could fetch more money from India through contracts. Now that the National Auditor has come close to making a differentiation of only 2.86 percent cheaper deal compared to the 2007 prices on Rafale jet fighters acquisition. In fact, overall, the points raised by the CAG point to a greater malaise involved in signing the deal with the French company Dassault Aviation and figures doled out provide enough ammunition to both the central government and the opposition to claim victory and score brownie points in the process. But still, there are a number of other issues that will provide enough material to the opposition parties to continue asking questions from the government, which does not have answers. The overall report of the CAG consists of two volumes - the first one comprises seven chapters that examine the systematic issues of India's acquisitions process and includes information on a number of different contracts. The second volume pertains to the Rafale deal and comprises audit findings specifically on the acquisition of Multi-Role Combat Aircraft through the inter-governmental agreement with France. This includes examination of pricing although specific details are not outlined but nothing on the offsets package or the role of Anil Ambani's Reliance Defense entity. The latter will form a separate report that will be presented later this year, but the National Auditor has indicated that it may not be compiled before the General Elections in May this year. A quick review of the reports suggests that the Rafale contract consisted of six different packages with a total of 14 items. The contracted prices of seven items were higher than the 'aligned price' or the price at which the agreement should have been signed after adjusting price variation between 2007 and 2015. The central government has neither the answer nor the justification why such a thing has happened in the process of acquisition.
Moreover, the report says that three items in the Rafale deal including the basic aircraft have been procured at the same price. Four other items were purchased at a lower than the aligned price, making the NDA-II's deal 2.86 percent cheaper than the cost negotiated by the UPA government. The CAG report points to the fact that NDA's deal was ultimately cheaper, no matter how small, is a claimed victory for the BJP. But there are other caveats as many ministers are on record for having told the Parliament with figures that were greater than the CAG acknowledged 2.86 percent. For instance, in this case, the Defense Minister asserted in the Lok Sabha that her government has got the price 9 percent cheaper than what was negotiated by the previous UPA regime. The CAG also disagrees with the Defense Minister's claim and has found that the basic flyaway aircraft were ultimately bought at the same price as that of 2007, which goes in favour of the Congress party. Another important point that has been underlined by the CAG is that when it comes to delivery schedule, the NDA's deal hurried up things by five months, which the auditor has doubts in view of the fact that whether this was achievable or not. The previous deal under the UPA provided for 36 aircrafts to be delivered within 72 months of the contract, whereas the current contract says it will happen within 67 months and there was urgency in buying the aircraft as they were needed. In the same breath, the CAG notes that Indian Negotiating Team had apprehensions of even this delivery schedule because at the time of signing the contract, the Dassault Aviation had an order backlog of 83 aircrafts. Considering the production rate of 11 aircrafts per annum, clearing this backlog will take more than seven years from now on. On the sovereign guarantee, the reports notes that the NDA has saved the money for the French company for no reason compared to what was negotiated by the UPA in the form of bank guarantee. On these issues, the government owes an explanation to the lawmakers and the common masses alike. The issue of corruption will continue to haunt the BJP even after the General Elections are over.