An IGA with France makes their govt responsible: Centre to auditor

NEW DELHI: The inter-governmental agreement signed between two long standing strategic partners made the responsibility of the French government and Dassault Aviation in the Rafale deal "joint and several", ensuring a high level of commitment, the government has told the CAG.

This reading of the defence deal would make the French government equally responsible to fulfil its obligations as a major advantage of an IGA is the purchasing government receives the same benefits and protection that the vendor gives to its own government.

The Indian government's assurances noted in the report were in the context of the French government and the makers of Rafale declining to furnish a bank guarantee or a sovereign guarantee. Instead, France gave a letter of comfort signed by then-Prime Minister Francois Hollande.

The suggestion to seek a sovereign guarantee had come from the law ministry, which noted the value of the procurement and that 60% of advance payments were to go to French vendors.

The CAG has assessed the terms and condition in acquisition achieved through the IGA process in about a page and a half of comments where it has dealt with the absence of certain guarantees.

The Cabinet Committee on Security decided to accept the letter of comfort but said an escrow account be set up for payments. The French government, however, did not agree and said that "guarantees already provided by the government of France were far reaching and unprecedented".

Finally, it was agreed that payments would be made directly to the bank accounts of French vendors that were opened in government-controlled banks in France. The French party was to exercise control and monitoring for effective implementation of the IGA and supply protocols.