Our Rafale deal 9% cheaper than UPA’s, claims Jaitley

Cong accuses Govt of hiding details, seeks probe against Reliance bias

Finance Minister Arun Jaitley on Wednesday reignited the Rafale sale debate by saying that the deal negotiated by the Modi Government is 9 per cent cheaper than what the UPA had worked out.

The Congress hit back at the Modi Government accusing it of not revealing the details and demanded a probe alleging that Anil Ambani’s Reliance Group had prior information that PSU Hindustan Aeronautics Limited would not get the offset contract.

In a Facebook blog and in an interview with an agency, Jaitley refuted Congress’ allegation that the Government had benefited Anil Ambani’s Reliance group, saying, “The Government of India has no contract whatsoever with any private industry in relation with the Rafale aircraft supplies”.

The Finance Minister made several posers for Congress president Rahul Gandhi and asserted that the NDA struck a deal which was nine per cent cheaper than that of the then UPA Government.

“Is he (Rahul) aware of the fact that if the basic aircraft price on which the UPA was to purchase the aircraft along with the escalation clause is compared at the price with the better terms on which the NDA Government signed the deal. The basic aircraft price itself is 9% cheaper under the NDA than it was under the UPA?” Jaitely asked.

Jaitley accused the Congress and Rahul of “peddling untruth” and carrying out a “false campaign” on the Rafale deal as he sought to counter the Opposition’s charge of it being the “biggest scam” in the Defence sector.

Responding to the Congress’ posers with his own set of 15 questions for Rahul, Jaitley said the deal NDA Government had entered into with France on April 10, 2015 for purchase of 36 Rafale fighter jets was on better terms than the one agreed to in 2007 under the UPA regime. He wondered as why the UPA dithered on taking a decision on the deal way back in 2017.

French manufacturer Dassault had offered to supply 126 medium multi-role combat aircraft in 2007.

Jaitley sought to know if delays in decision making during its regime were based on collateral considerations like the ones witnessed in the controversial purchase of Bofors guns.

He said adding the UPA on June 27, 2012 decided to re-examine the deal, which effectively meant that the entire 11-year exercise was abandoned and the process was to be undertaken afresh.

“India’s squadron strength was depleting because of age. This slow and casual approach of the UPA Government seriously compromised national security requirements,” he said.

 Refusing to disclose details of the deal such as the price of the aircraft, due to constraints placed by “secrecy clause” in the contract, he said Congress’s allegations that the NDA Government agreed to pay a higher price and is favouring a private industrialist are “complete falsehood”.

“Can Rahul Gandhi and the Congress deny that the Indian Government has no contract whatsoever with any private industry in relation with the Rafale aircraft supplies? In fact, 36 of the Rafale aircraft with their Indian adaptations are going to be sent to India and there is no manufacturing of these aircraft in India,” he said.

Stating that the Rafale controversy was based on “complete falsehood”, Jaitley said it was expected from national political parties and their responsible leaders to keep themselves informed of the basic facts before they enter a public discourse on defence transactions.”

Jaitley said the Congress and Rahul were guilty on three counts - delaying the deal by over a decade compromising national security, speaking of falsehood on pricing and procedure, and further delaying the defence procurement by raising these issues.

“Needless to say that I am constrained by the secrecy clause which exists in the contract and whatever I ask or respond to would be constrained by that limitation,” he said.

The Finance Minister said Rahul had in Jaipur used two figures - Rs 520 crore and Rs 540 crore as the cost of each fighter jet under the UPA deal.

“Rahul Gandhi quoted a price of Rs 700 crore per aircraft in Delhi and Karnataka in April and May this year. In Parliament, he reduced it to Rs 520 crore per aircraft, in Raipur he increased it to Rs 540 crore,” he said.

“In Hyderabad, he invented a new price of Rs 526 crore. Truth has only one version, falsehood has many. Are these allegations being made without any familiarity with the facts of the Rafale purchase?” he asked.

In a sharp riposte, senior Congress leader Anand Sharma said vendors have to disclose how the offset contracts would be discharged under the defence procurement policy. “For him (Jaitley) to say that offset is not part of the contract is wrong,” he said and demanded a probe alleging that Anil Ambani’s Reliance Group had prior information that PSU Hindustan Aeronautics Limited would not get the offset contract.

Sharma rejected Jaitley’s assertions saying that under the defence procurement policy it is very clear that the vendor has to notify how the offset liability will be discharged.

“You left out HAL, violated the Official Secrets Act, did not seek the mandate of CCS and conducted no price determination for reducing the aircraft purchase from 126 to 36 aircraft. So there should be a probe into this. They may deny whatever, but the truth will come out,” the Congress leader told reporters.

He also said the defence procurement policy makes it clear that the offset contract has to go to a defence PSU with experience in the sector.

“Only the Prime Minister knew that the offset contracts would not be given to HAL and he violated the oath of secrecy taken on the position he holds,” he said, adding “the Official Secrets Act says such things are not to be disclosed. How did Anil Ambani know that HAL will not get the contract and he set up his company 10 days before?”

He said under the UPA, offset was 50 per cent of the contract and HAL did not get the contract or transfer of technology. “The Finance Minister has not talked about it,” he said.

“When the Prime Minister went abroad, did he take the mandate of the Cabinet Committee on Security (CCS) regarding cancellation of the earlier contract,” he asked.

Countering Jaitley’s charge that national security was compromised by the Congress, Sharma said, “Does national security say that there should be corruption and a wrong decision.”

On Jaitley’s allegation that the UPA delayed the procurement procedure for over one decade “on account of the incompetence and indecisiveness of the UPA Government”, Sharma said negotiations were being held in a transparent manner through a global tender and it takes times as trials are held.

But the price is three times more under the new deal than the earlier price, he claimed and asked, “What is the Government hiding here?”

He said as per the defence procurement policy, it is written in the contract what percentage is offset contracts and Dassault will have to disclose as to how it intends to discharge the offset liability.

“Probably the Finance Minister does not know of this,” Sharma said.

Sharma said on October 27, 2017, French Minister for armed forces had come to India and met Indian Defence Minister in the morning in Delhi and then went on in a chartered plane to Mehan in Nagpur in the afternoon, to attend the foundation laying function of Reliance Infrastructure where Union minister Nitin Gadkari was also present.

“Questions are raised as it involves contracts worth Rs 30,000 crore and to say the Government has no information, is wrong. How did a private company knew before the decision that the offset contracts would be taken away from public-sector Hindustan Aeronautics Limited (HAL),” he asked.