The Indian government paid 40 per cent more per Rafale jet for its agreement to procure 36 Rafale aircrafts as compared to the cost agreed upon per aircraft in the 2012 agreement to purchase 126 aircrafts.
Former colonel in the Indian Army and Business Standard columnist Ajai Shukla reported in his blog that in 2016, the Bharatiya Janata Party (BJP) government had signed an agreement to purchase 36 Rafale jets at the cost of €7.5 billion, which came to around €217 million per jet. In comparison, in 2012, the then United Progressive Alliance (UPA) government had placed the order for the 126 Rafale jets for €19.5 billion, which came to around €155 million per aircraft.
Moreover, the 2012 agreement with Dassault included 18 jets being manufactured in France with the balance 108 jets to be built at the Hindustan Aeronautics Limited (HAL) in India. The report also mentioned that while it is being pointed out by senior officers of the Indian Air Force (IAF) that the 2016 agreement also includes “add-ons like weaponry, spare parts and logistic guarantees”, the 2012 agreement included these additional services which were a part of the Request for Proposals (RFP) sent as a part of the tender for the 126 jets in 2007.
The report noted, “The 2007 RFP stipulates that vendors must price in the ‘total cost of acquisition’. This includes the purchase cost of the “bare bones” aircraft, specified enhancements, weaponry, spares, maintenance and the cost of operating the aircraft for 40 years, including the cost of fuel, oil and lubricants.”
The report also observed that since the 108 aircrafts were to be built in India with kits being provided by Thales and Dassault and Snecma (which, in 2016, was renamed to Safran Air Engines), it would have added to the total cost.
Lastly, the report mentioned that the original price with which the agreement — entered upon in 2012 — remained valid in April 2015 when the Prime Minister Narendra Modi announced that a new agreed upon for the procurement of 36 jets. Yet, the PM cancelled the original agreement — and thereby the tender — and signed the new deal in September 2016.
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