File photo of finance minister Arun Jaitley.(PTI photo)
File photo of finance minister Arun Jaitley.(PTI photo)

NDA government’s Rafale deal better, says Arun Jaitley; Rahul Gandhi hits back

Finance minister Arun Jaitley said in an interview to news agency ANI that Rafale jets were coming to India “fully loaded” and the deal was between the two governments, without anyone in between.
By HT Correspondent | New Delhi, Hindustan Times
UPDATED ON AUG 29, 2018 09:58 PM IST

Finance minister Arun Jaitley on Wednesday claimed the National Democratic Alliance (NDA) government negotiated hard to keep the price of Rafale jets down by at least 20% per aircraft in its 2016 deal, as compared with the United Progressive Alliance’s (UPA) deal of 2007.

Jaitley said in an interview to news agency ANI that these aircraft were coming to India “fully loaded” and the deal was between the two governments, without anyone in between.

“Can you compare a basic aircraft’s pricing with a loaded aircraft? Can you compare a simple aircraft with a weaponised aircraft,” Jaitley asked.

“If, in 2012, they had come to an agreement, the first (aircraft) would have been delivered in 2017. From 2007 to 2017, the escalations would have gone up, along with a foreign exchange variation... Is the Congress party aware that if you take the 2007 L1 offer and the escalation clause without the add-ons, the price negotiated in 2015-16 is cheaper?” L1 is an abbreviation for the lowest bidder.

Shortly after Jaitley’s interview was published, Rahul Gandhi hit back on social media.

“Mr Jaitley, thanks for bringing the nation’s attention back to the GREAT #RAFALE ROBBERY! How about a Joint Parliamentary Committee to sort it out? Problem is, your Supreme Leader is protecting his friend, so this may be inconvenient. Do check & revert in 24 hrs. We’re waiting!” he tweeted.

The NDA’s decision to enter an $8.7 billion deal with France to buy 36 Rafale warplanes made by Dassault was announced in April 2015, with an agreement signed a little over a year later. This replaced the previous UPA government’s decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd.

The deal has become controversial with the Opposition, led by the Congress, saying that the price at which India is buying Rafale aircraft now is R1,670 crore for each, three times the R526 crore initial bid by the company when the UPA administration was trying to buy the aircraft. It has also said that the previous deal included a technology transfer agreement with HAL.

“Let us first come to the pricing. My question, therefore, is if you are fully aware -- Mr (AK) Antony fully read the file and abandoned the contract -- he would tell his party that the L1 offer of 2007 had a basic 2007 price, plus escalation, plus currency variation. In 2015 or ’16, this would have been 9% costlier than what the basic aircraft price negotiated was… Loaded to unloaded, you compare the price again. The 2016 price is 20% cheaper than the 2007 offer. So we got it cheaper,” Jaitley said.

Dismissing Congress president Rahul Gandhi’s charge that the Rafale jet being purchased by the present government is more expensive, Jaitely said that every point made by the opposition party is “factually false”. He asserted that no rules were bypassed and the Cabinet Committee on Security approval was taken during the deal, and negotiations took about 14 months to complete.

The deal has also become controversial because one of the offset deals signed by Dassault is with the Reliance Group of Anil Ambani. The Congress alleges the earlier deal was scrapped and a new one signed just to provide Ambani this opportunity for an offset deal. Both the government and Reliance have repeatedly denied this.

Jaitley, in turn, attacked the Congress for compromising the nation’s security through policy paralysis and not going ahead with a deal after the tendering process was completed.

“India’s security was compromised. Was it policy paralysis or decision paralysis that you allow India’s security to be compromised by indefinitely not taking a decision or was there any collateral consideration which compelled you to just abandon it and put India’s security at risk,” he asked

Jaitley challenged the Congress to produce evidence that the deal was not good for the country and attacked Gandhi for “twisting the facts” of the deal. Earlier in the day, Jaitley had also written a blog posing 15 questions to the Congress on the Rafale deal under three headers -- “on delay”, “unsure of facts” and “on procedure”.

“Any responsible politician will know that government-to-government transactions are always clean. Governments don’t pay kickbacks. It’s a transaction between the Government of India and the Government of France -- publically made and publically declared terms that we will give you an offer better than 2007 and then enter into,” Jaitley said in the interview.

Reacting to Jaitley’s remarks, the Congress reiterated its demand for a joint parliamentary committee (JPC) probe. “If Modi government has nothing to hide, why can’t they agree to the JPC probe?” said Congress spokesperson Manish Tewari. “Demonetisation is this government’s biggest failure, but the finance minister is talking about Rafale today. Why didn’t he speak about Rafale in Parliament during the no-confidence motion,” he added.

The NDA government has maintained that it cannot disclose the details of the price on two counts: a confidentiality agreement with France, and the strategic reason of not showing its hand to India’s enemies.

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