Rafale deal: Defence Ministry says all issues already answered in detail

The Ministry of Defence (MoD) on Friday termed The Hindu’s detailed story on steep price escalation in the deal for 36 Rafale fighter jets as “factually inaccurate”. It did not adduce any new arguments as all issues have been answered in detail by the government at various fora and by Defence Minister Nirmala Sitharaman in Parliament, it said.

In a statement, the MoD spokesperson said, “The cost of the India Specific Enhancements (ISE) was on a fixed basis in the 2007 bid, which was negotiated down in the 2016 deal. However, to compare the cost of the Medium Multi-Role Combat Aircraft [MMRCA] contract which never materialized with the cost of the 36 aircraft procured in 2016 is fallacious. The author, while indicating the price of ISE as €1.4bn in 2007, has failed to include the in-built escalation factor that would have worked between 2007 and 2015.”


Escalation factors ::

In an exhaustive story in The Hindu, N. Ram, Chairman of The Hindu Publishing Group, detailed how there was a huge price escalation as a result of bypassing procedures, official objections and the non-recurring cost of the ISE spread on just 36 aircraft compared to the earlier 126 jets.


‘Not comparable’ ::

The spokesperson said that “the author has rightly pointed out” that the cost of the basic aircraft in the 2016 deal was better than the offer of 2007 after considering escalation but however, observed, “Surprisingly, in the headline of the article, the author has compared the un-escalated price of 2007 with the price of 2016 without considering the escalation factors inherent in the price bid.”


‘No adverse finding by Supreme Court’ ::

The MoD said that “hidden deep in the article itself” it is stated that the price is 14.2% higher compared to the escalated price “as probably this figure does not attract as much attention as a 41.4% higher price.”

Observing that even the UPA Government had “rightly” rejected the European consortium EADS offer of 20% discount in 2012 after opening of bids as violative of procedure, the MoD statement said that consideration of this offer by the government would have again made it subject “to charge of violating basic procedure.”

“It is best to avoid the pitfalls of a corporate battle which has been going on since 2012 which has adversely affected the capabilities of the Indian Air Force. The controversy should be put to rest in the interest of national security,” the statement said.

In September 2016, India and France signed a €7.87 billion Inter-Governmental Agreement (IGA) for 36 Rafale multi-role fighter jets in fly-away condition following the surprise announcement by Prime Minister Narendra Modi in April 2015 citing “critical operational necessity” of the IAF.

Referring to the Supreme Court verdict over the issue, the MoD statement said the apex court has not found “anything adverse in the deal” and has refused to order an investigation.

“The Comptroller and Auditor General (CAG) has been given access to all the files related to the Rafale deal. It is best to await the report of an authoritative agency like the CAG,” the statement added.

According to the statement, a negotiation, especially, between two countries is a comprehensive deal and “selectively picking certain aspects while ignoring others, creates doubts by vested interests on a matter of vital national security.”

Reacting to The Hindu report, the BJP said there had been enough clarity shed on the issue by various institutions to elicit further comment.

Union Minister for Textiles Smriti Irani, while answering a question at a presser at the BJP headquarters in New Delhi said: “In cohesion with Mr. Chidambaram whatever statements have been made, and supplanted by the supposedly national daily, the Supreme Court has issued unequivocally its statement, the defence minister has eloquently spoken on it in Parliament and the CAG has access to all files. For those who use this for their own political ends, yeh public hai sab janti hai (this is the public, it knows everything).”

Ms. Irani added that after this clarification, if the Congress is still maliciously raising the issue, it is only for a political purpose, for which they are also sidelining national security.

 thehindu