A senior official of the Ministry of Defence (MoD) raised several objections on the Rafale deal, nearly a month before the deal was signed between then defence minister Manohar Parrikar and the French Defence Ministry.
According to The Indian Express report, the senior official, who was a part of the Contract Negotiations Committee (CNC), put on record his objections concerning the benchmark price. However, all the objections raised were ‘overruled’ by another senior official of MoD, Director General (Acquisition).
The officer who raised concerns was then Joint Secretary & Acquisition Manager (Air) in the MoD. His objections reportedly led to delay in the Cabinet note of approval and its signing.
The Rafale deal file, currently being assessed by the Comptroller and Auditor General (CAG), consists of the note by the JS & AM (Air). The Indian Express sources state that the CAG is likely to mention the note containing objections in its report which is due for submission in the winter session of Parliament in December.
Objections raised in the note
The JS & AM (Air) questioned the benchmark price for the French aircraft in the new 36-Rafale deal signed by the Narendra Modi government. The aircrafts bought under this Rafale deal are reportedly much more expensive than the benchmark price for the shelved 126-Rafale proposal. The Opposition has also accused the Modi government of corruption in the Rafale deal.
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JS & AM (Air) also reveals in his note that EADS, Germany, the maker of Eurofighter — the second aircraft which had qualified in the IAF trials after Dassault— had offered a 20 per cent discount on its bid price to the Indian government in July 2014. JS & AM (Air) argued that since Dassault’s competitor was offering such a discount, a similar 20 per cent cut should be applied for rates being offered by the French company.
Another crucial observation in the note stated the fact that the fleet of IAF consisted of the Russian Sukhoi Su-30 MKI, which were already being manufactured by Hindustan Aeronautics Limited (HAL) in India. The note asserted that for the same amount, the IAF could get more Sukhoi aircraft from state-owned HAL.
After the objections raised by JS & AM (Air) were over-ruled by the Defence Acquisition Council (DAC) chaired by Manohar Parrikar, the senior MoD official went on a month’s leave. The 36-Rafale deal was approved by DAC in the first week of September 2016.
According to French news website Mediapart.fr, then French President Francois Hollande had said that the original deal was to be 126 aircraft, “but with the change of government (in India in 2014), the Indians reformulated their proposal, which was less attractive for us, since it was 36 aircraft only. But the manufacture was planned in France, contrary to the previous proposal. So we lost on one side, but we won the other.”