Rafale deal cheaper by 2.86%, not 9% as govt claimed: CAG
Pradeep Thakur | TNN | Feb 14, 2019, 01:37 IST
NEW DELHI: The much-awaited report of the Comptroller and Auditor General (CAG) on the Rafale deal has said the contract to acquire 36 fighter jets was 2.86% cheaper than the price being negotiated by the UPA government in 2007 but not 9% as claimed by the NDA government.
The CAG report on 'capital acquisition in IAF', containing a comprehensive evaluation of the 2016 Rafale deal, was tabled in Parliament on Wednesday. Though the auditor said the deal was better on price, it argued the NDA government could have driven a better deal if it had not offered certain concessions. The auditor also rejected the defence ministry's argument that the 2016 contracted price for 36 basic flyaway aircraft was 9% lower than the price offered in 2007 by Dassault Aviation. It said the contract for Rafale consisted of six different packages with a total of 14 items. The contracted price of seven items was higher than the aligned price, the price at which the contract should have been signed.
"Three items, including the basic aircraft, were procured at the same price. Four items were purchased at lower than the aligned price," the auditor said. The six different packages included flyaway aircraft package, maintenance package, India-specific enhancements, weapons package, associated services and simulator package.
The period fixed for delivery of the aircraft was almost similar in both the offers. In the 2007 offer, 18 aircraft were to be delivered by the 50th month of signing the contract and the next 18 were to be licensed produced by HAL and delivered from 49 to 72 months of the contract signing.
However, in the 2016 contract, the first 18 aircraft would be delivered between 36 to 53 months after signing of the IGA and the remaining 18 by 67 months. The India-specific enhancements, which were to be integrated on the delivered aircraft, could have taken 72 months for these jets to be delivered as per the 2007 offer. But in the 2016 contract, this would have come down to 71 months. So, the time saving was just one month. On the offer of a 20% discount on the 2007 price by Rafale's competitor Eurofighter consortium, the CAG said the government rejected the overture as "unsolicited" and pointed to factual inaccuracies.
The CAG report on 'capital acquisition in IAF', containing a comprehensive evaluation of the 2016 Rafale deal, was tabled in Parliament on Wednesday. Though the auditor said the deal was better on price, it argued the NDA government could have driven a better deal if it had not offered certain concessions. The auditor also rejected the defence ministry's argument that the 2016 contracted price for 36 basic flyaway aircraft was 9% lower than the price offered in 2007 by Dassault Aviation. It said the contract for Rafale consisted of six different packages with a total of 14 items. The contracted price of seven items was higher than the aligned price, the price at which the contract should have been signed.
"Three items, including the basic aircraft, were procured at the same price. Four items were purchased at lower than the aligned price," the auditor said. The six different packages included flyaway aircraft package, maintenance package, India-specific enhancements, weapons package, associated services and simulator package.
The period fixed for delivery of the aircraft was almost similar in both the offers. In the 2007 offer, 18 aircraft were to be delivered by the 50th month of signing the contract and the next 18 were to be licensed produced by HAL and delivered from 49 to 72 months of the contract signing.
However, in the 2016 contract, the first 18 aircraft would be delivered between 36 to 53 months after signing of the IGA and the remaining 18 by 67 months. The India-specific enhancements, which were to be integrated on the delivered aircraft, could have taken 72 months for these jets to be delivered as per the 2007 offer. But in the 2016 contract, this would have come down to 71 months. So, the time saving was just one month. On the offer of a 20% discount on the 2007 price by Rafale's competitor Eurofighter consortium, the CAG said the government rejected the overture as "unsolicited" and pointed to factual inaccuracies.
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