The Union government on Saturday told the Supreme Court that concern raised by three senior Defence Ministry officials over Prime Minister Narendra Modi government’s new deal for 36 flyaway Rafale aircraft was dealt with in a “collegiate manner”. The official had stated that the deal was not on “better terms” than the offer made by Dassault Aviation during the procurement process for 126 aircraft under the United Progressive Alliance government.
The three officials — M.P. Singh, Adviser (Cost), a Joint Secretary-level officer from the Indian Cost Accounts Service; A.R. Sule, Financial Manager (Air); and Rajeev Verma, Joint Secretary & Acquisitions Manager (Air) — were the domain experts on the seven-member Indian Negotiating Team (INT).
They had expressed strong reservations in a dissent note on June 1, 2016 submitted to the Deputy Chief of the Air Staff (DCAS) in his capacity as chairman of the negotiating team. The Hindu had published the note.
They had concluded that the delivery schedule of even the first 18 of the 36 flyaway Rafale aircraft in the new deal was slower than the one offered for the 18 flyaway aircraft in the original procurement process. The three officials had also registered serious concern over the Indian government’s acceptance of a ‘Letter of Comfort’ in lieu of a sovereign or government guarantee or bank guarantees; legal issues relating to the inter-governmental agreement; offset issues; and Dassault Aviation’s restrictive trade practices.
‘Selective highlighting’
The government said review petitioners had “selectively” highlighted the “concerns” raised by the three officials and that they had failed to reveal to the court that the issue was addressed by the competent authority.
After the concerns were raised on June 1, 2016, two more INT meetings were held between the members on June 9 and 10, 2016 and July 18, 2016.
Certain concerns raised by the three members were also referred to the Defence Acquisition Council. The INT report also indicated the better terms and conditions arrived at as a result of the negotiations, compared with the 126 multi-role combat aircraft case. The then JS&AM (Air), who was one of the three signatories to the note, subsequently signed the note for Cabinet Committee on Security approval, the government said. It added that the three officials had raised an “unfounded conjecture” that Dassault could not deliver the 36 jets before 10 years.
“The project is currently as per schedule with the first plane to be delivered in September 2019 as per the contracted schedule of delivery,” the government said.
The government further pointed out how the Comptroller and Auditor-General found the benchmark price fixed by the INT as “unrealistic”. The three officials had observed in their note that the final price offered by the French Government (which is escalation based) was 55.6% above the benchmark.