MoD Experts Wrote NDA’s Rafale Deal ‘Costlier, Slower on Delivery’

A dissent note by defence ministry experts directly contradicts Centre’s claims about the Rafale deal.

File image of a French Dassault Rafale fighter plane. 

(Photo: Reuters)

The Narendra Modi government’s Rafale deal for 36 fighter aircraft was not on better terms than the offer made by Dassault Aviation to the erstwhile UPA government for the procurement of 126 aircraft, a dissent note by three senior defence ministry officials said.

In an exclusive report, The Hindu reported that the three officials, who were domain experts on the seven-member Indian Negotiating Team (INT) for the Rafale deal, had also concluded 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”.

This directly contradicts claims made by the Modi government as defence for its version of the deal – that it was a cheaper and ensured faster delivery of the fighter aircrafts.

Centre had even affirmed these claims before the Supreme Court in its official submissions.

The three experts – 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) – had recorded their views in a strong note of dissent on 1 June 2016, The Hindu report said.

The note was submitted to the Deputy Chief of Air Staff (DCAS) in his capacity as chairman of the negotiating team at the end of Rafale negotiations.

The officials had also registered serious concern over the government’s acceptance of a ‘Letter of Comfort’ in lieu of a sovereign guarantee, legal issues relating to the IGA, offset issues, and Dassault Aviation’s restrictive trade practices, the report added.

The Quint had reported in December last year that France had not provided a sovereign guarantee to India for the delivery of 36 Rafale aircraft, but had only provided a letter of comfort, which is not legally binding.

The note goes against the arguments presented by the Centre while justifying its deal before the apex court.

It is not known, the report added, whether the dissent note put forth by the three domain experts was a part of the material submitted in a sealed cover to the court.

In a big win for the Centre, SC had on 14 December, dismissed all petitions seeking a court-monitored probe into the Rafale aircraft deal with France.

A three-judge bench, headed by Chief Justice Ranjan Gogoi, had said that it was satisfied with the procurement process of the 36 aircraft and that a country cannot be “underprepared”.

“We don't find substantial matter to interfere with issue of procurement, pricing and offset partner in Rafale jet deal,” the court had said.

New Deal More Expensive, Slower on Delivery

The Hindu report highlighted key salient features of NDA’s Rafale deal and compared it to the offer put before the UPA:

• The benchmark price determined for the aircraft and weapons packages in the new deal was €5.06 billion. However, the dissent note revealed that the final price for the whole Rafale package shot up to €7.87 billion.The final price offered by the French government was 55.6 percent above the benchmark, the experts noted.
• “To establish ‘better terms for price’,” the note goes on to narrate, “the French side was repeatedly asked to align the commercial offers submitted by Industrial Suppliers in MMRCA process to the scope of supplies as per 36 Rafale procurement.” However, “the French side refused to take cognisance of this aspect.”
• On delivery of aircrafts, the note said: “In the MMRCA process, the first 18 flyaway aircraft were being delivered between T0+36 months to T0+48 months whereas in the delivery schedule offered by the French side, first 18 aircraft will be delivered between T0+36 months and T0+53 months.”

INT Chairman Rejects Claims of Dissent Note

Breaking his silence, the chairman of the Indian Negotiating Team (INT) in the 36 Rafale deal, Air Marshal RKS Bhadauria, on Wednesday said that the three members of his team, who had written the note, had raised certain objection points which were “not dissent" as these were “suitably included and addressed” in his final report, ANI reported.

“The INT report was without any dissent note. These observations must be seen as part of deliberations of the INT before finalisation and forwarding of report,” Bhadauria said.

Modi Govt Waived Anti-Corruption Clauses in Rafale Deal

This comes after another revelation in the Rafale deal had come to the fore on Monday. A report in The Hindu had said that the Centre had waived crucial provisions for anti-corruption penalties just days ahead of signing the inter-governmental agreement (IGA) with France.

The report had said that as a result of the high-level political intervention, the standard Defence Procurement Procedure (DPP) clauses on “Penalty for use of Undue Influence, Agents/Agency Commission, and Access to Company accounts” of Dassault Aviation and MBDA France were dropped by the Indian government.

This is significant given the Modi government’s anti-corruption poll plank, which is often invoked by the prime minister to attack the erstwhile UPA regime ahead of Lok Sabha elections.

A report by the Comptroller and Auditor General of India on the Rafale deal is expected to be tabled in Parliament on Wednesday, 13 February, the last day of the Budget Session.

(With inputs from The Hindu)