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Narendra Modi’s Rafale deal not better than Manmohan Singh’s, claims newspaper report citing expert finding

The Rafale deal struck by the Narendra Modi government was not “was not on better terms than the offer made by Dassault Aviation to the UPA government for 126 Rafale jets”, The Hindu reported. The Hindu has released another report, third one in less than a week, over the controversial Rafale deal. According to key findings of the three domain experts on the Indian Negotiating Team, the new Rafale deal for 36 ready-to-fly aircraft signed by the BJP-led NDA government is not better than the previous UPA government.

The report further mentioned that the delivery schedule of the first 18 of the 36 flyaway Rafale aircraft in the new deal was slower than the one offered for the 18 flyaway aircraft in the original procurement process.

The findings of the team, The Hindu reported, are contradicting to the claims made by the Central government saying that the deal struck by the BJP-led NDA government was cheaper, and delivery of the aircraft was faster (compared to UPA deal) and these assertions were even submitted to the Supreme Court of India.

File image of Prime Minister Narendra Modi. Reuters

File image of Prime Minister Narendra Modi. Reuters

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) are the three domain experts who noted their assertions in a “strong dissent note” dated 1 June, 2016.

A series of investigative articles have rocked the political circle in India as the Opposition parties, mainly Congress, has upped the attack against the ruling BJP over irregularities in the Rafale deal.  Ahead of the Lok Sabha elections 2019, where the ruling NDA alliance led by the Bharatiya Janata Party will be fighting to win another mandate at the Centre, the controversy around the Rafale deal has exploded to huge proportions.

The findings of the team acquire significance because these were the arguments presented to the Supreme Court by the NDA government citing why the Rafale deal signed under the current political dispensation is better off than the earlier agreement.

The benchmark price — a number discovered in advance by financial experts which acts as a ceiling on the finally negotiated price of the whole package — for the aircraft and its weapons combined was originally fixed at €5.06 billion, but it ultimately shot up to €7.87 billion — an escalation by 55.6 percent above the benchmark. The Hindu reported: “It is highlighted that the initial commercial offer from the French side was for firm and fixed price which was converted to price based on escalation formula during the price negotiations. The benchmark price prepared by INT was for firm and fixed price and not adjusted to price based on escalation formula. The final price offered by the French Government (which is escalation based) is 55.6% above the benchmark (which is for firm and fixed price). Considering the future escalations till the time of delivery, the gap in the benchmark and the final price would further increase. Minor adjustments towards costs of Technical Publications, Advance Training of IAF Pilots and Technicians and Role Equipment would not make much dent to this huge gap.”

Earlier reports in The Hindu sparked a fresh debate over the Rafale deal as the report quoted a 2014 note written by the Ministry of Defence which raised strong objections to ‘parallel negotiations’ conducted by the Prime Minister’s Office (PMO) with the French side. Stating that it was clear that such parallel discussions by the PMO had “weakened the negotiating position of MoD and Indian Negotiating Team,” the note, dated 24 November, 2015 brought this to the attention of the then defence minister Manohar Parrikar.

The second report in The Hindu claimed that the deal involved “major and unprecedented concessions from the Indian government, with critical provisions for anti-corruption penalties and making payments through an escrow account dropped days before the signing of the inter-governmental agreement (IGA).” The Modi government, which rode to power in 2014 on the promise of culling corruption out of the country, came under intense criticism after the report was released on 11 February.

The Indian Expressin its report, said that in March 2015 before Modi announced officially procuring the 36 Rafale jets from France, industrialist Anil Ambani reportedly visited the then French defence minister’s office in Paris and had a meeting with his top advisors. Special advisor to the then defence minister Jean-Yves Le Drian met Ambani with industry advisor, Christophe Salomon; and his technical advisor for industrial affairs, Geoffrey Bouquot. Ambani’s meeting was described by Salomon to a top official of a European defence company as ‘confidential and planned as you can imagine with very short notice’.

The reports have given new impetus to Opposition parties, especially the Congress, which has been trying to corner the BJP-led Centre ahead of crucial Lok Sabha elections due in a few weeks.

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Updated Date: Feb 13, 2019 10:08:56 IST

Updated: February 13, 2019 — 5:02 pm
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