Cong, BJP spar after report says govt paid higher price for Rafale

NEW DELHI: Fresh bickering broke out between Congress and BJP over a report claiming that the Rafale deal concluded by the NDA was 41.4% costlier per plane than the one being negotiated by the UPA, with the government saying the claim was grossly inaccurate and the opposition reiterating its demand for a JPC to probe the contract.

A report in Hindu on Friday said if the cost of India-specific enhancements (ISEs) was taken into account, the price per unit shot up as the total expense of 1.3 billion euros for the upgrades was spread over 36 fighters contracted by the NDA instead of the 126 under negotiation when the UPA was in office.

The defence ministry said selectively picking out certain aspects while ignoring others in a comprehensive negotiation was misleading and inaccurate. The government said the report failed to note reduction in escalation factor from 3.9% in 2007 to 1.22% in 2016 which could result in an advantage of up to 1.3 billion euros over the delivery period. The ministry said the report itself noted that the price was 14.2% higher in 2016 after taking escalation into account. This was not highlighted as probably this figure "does not attract as much attention" as the 41.4% higher price, it said.

Congress latched on to the report to attack the Centre and P Chidambaram said the government did not buy the 90 more aircraft (as part of the earlier talks for 126 aircraft) needed by the IAF and paid Rs 186 crore more to French firm Dassault for the ISEs. He said the deal must be examined by a JPC and not be left to the courts.

In retaliation, finance minister Arun Jaitley said the report on Rafale was “based on fudged arithmetic”. “Ignore the escalation of the 2007 non-deal offer and compare it with the 2016 price and invent a scam. The 2007 escalation offer was much larger than 2016 agreed escalation. The price differential would widen with each subsequent supply. Fudged arithmetic does not add to the credibility of its creator,” he said.



Congress, however, claimed that French armament major Dassault had been handed windfall profits. It accused PM Modi of increasing the “benchmark price” of the deal from 5.2 billion euros to 8.2 billion euros and claimed over Rs 1,600 crore was paid per aircraft against UPA’s “price” of Rs 527 crore. It also pointed to objections raised within the Indian negotiating team.

“Secondly, it has purchased two squadrons that will cost about €25 million more per aircraft. At the 2016 exchange rate, 25 million euros is equal to Rs 186 crore. India will pay Rs 186 crore more per aircraft,” Chidambaram said.

CPM leader Sitaram Yechury alleged, “Modi’s sudden announcement in Paris to buy only 36 Rafale jets, not 126 that the IAF wanted, violated all procedure. But it also compromised India’s national security. That is why Modi has been running scared of sharing details.”

The defence ministry pointed out that the Hindu report compared the “un-escalated price of 2007 with the price of 2016 without considering the escalation factors inherent in the price bid”.

BJP responded by saying the Supreme Court had examined the Rafale deal thoroughly, including details on pricing, and accused Congress of running a “malicious campaign” against the government and abandoning national interest for its false propaganda. Congress itself was unable to answer why it failed to conclude the Rafale deal between 2007 and 2011, it added.

BJP leader Smriti Irani said Congress’s “malicious campaign had been exposed” as she noted the SC verdict on the matter and defence minister Nirmala Sitharaman’s over-90-minute reply in Parliament.

Irani said all Congress leaders raising false accusations against the government over the Rafale deal were on bail. “The Congress’s game of running a malicious campaign on this issue and abandoning national interest for their own politics has been exposed,” she said.