Rafale price details given to Supreme Court, govt says rules followed

Updated on Nov 13, 2018 12:04 PM IST

The government on Monday revealed in a sealed cover to the Supreme Court the pricing details of the Rafale deal and also shared with petitioners questioning the deal a redacted version of a report submitted to the top court last month detailing the decision-making process.

It isn’t clear whether the price revealed is that of the basic cost of the aircraft without weapons and India-specific enhancements, or the cost of the fully loaded, made-for-India one.(Reuters File Photo)
It isn’t clear whether the price revealed is that of the basic cost of the aircraft without weapons and India-specific enhancements, or the cost of the fully loaded, made-for-India one.(Reuters File Photo)
Hindustan Times, New Delhi | ByAshok Bagriya

The government of India revealed in a sealed cover to the Supreme Court on Monday the pricing details of the controversial deal to buy 36 Rafale jets from France and also shared with petitioners questioning the deal a redacted version of a report submitted to the top court last month detailing the decision-making process that led to the purchase.

A government official familiar with the matter confirmed that the government has “given all details pertaining to the pricing of Rafale jets to court as it was felt that the prices could be revealed to Supreme Court judges.”

It isn’t clear whether the price revealed is that of the basic cost of the aircraft without weapons and India-specific enhancements, or the cost of the fully loaded, made-for-India one.

A team of Indian negotiators set up to buy 36 Rafale fighter jets got a better deal on price and maintenance of the planes as compared to the earlier offer from French firm Dassault Aviation, according to the decision-making report, which also added that there was no mention of a private business house when it came to the offset part of the deal.

The reference to offsets, experts said, just indicates that Dassault hasn’t perhaps given all details of the offset partnerships it has entered into, something it has to do only by October 2019.

Indian offset partners and products will be confirmed by Dassault at the time of seeking offset credits.

The filing of the price details is in compliance of an October 31 order of the Supreme Court which said: “The court would also like to be apprised of the details with regard to the pricing/cost, particularly, the advantage thereof, if any, in a sealed envelop.”

This order was passed by the court in response to a batch of public interest petitions seeking a court-monitored probe into the purchase of the jets.

The government has until now resisted attempts by the court asking for price details of the jets. Attorney general of India KK Venugopal even went to the extent of telling the court that the pricing details are protected under the Official Secrets Act, 1923. So far, the government has only shared price details of the basic model of Rs 670 crore with the Rajya Sabha.

The case will be heard on Wednesday, November 14.

In the redacted copy of the decision-making process shared with the petitioner and also available with Hindustan Times, the government has defended the purchase and said all processes were followed.

Defending the procurement on the grounds of national security, the government said in the report that between 2010 and 2015, India’s adversaries inducted more than 400 modern aircraft and upgraded their older models. “They not only inducted 4th generation aircraft but also inducted 5th generation stealth fighter aircraft. An urgent need was felt to arrest the decline in the number of fighter squadrons in IAF and enhance their combat facilities.”

The report added: “An Indian Negotiating Team (INT) was constituted to negotiate the terms and conditions of the procurement of the 36 Rafale Aircraft. The INT was headed by a Deputy Chief of Air Staff and comprised of Joint Secretary & Acquisition Manager (Air), Joint Secretary (Defense offset Management Wing) Joint Secretary & Additional Finance Advisor (Air), Advisor (Air) and Assistant chief of air staff (plans).”

It added, “A total of 74 meetings, which included 48 internal INT meetings and 26 external INT meetings with French side were held during the negotiations.”

The purchases were made under an instrument called the Inter Government Agreement and “of the total procurement of about 7.45 lakh crore since 2002 IGAs account for 40% of the procurement”, said the government document.

Deflecting criticism on the offset partner, the document said: “insofar as discharging offset obligations by Original Equipment Manufacturer (OEM) and its Tier-1 vendors through Indian offset partners is concerned there is no mention of private Indian Business House”.

The National Democratic Alliance (NDA) government’s decision to enter a $8.7-billion government-to-government 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 United Progressive Alliance (UPA) regime decision to buy 126 Rafale aircraft, 108 of which were to be made in India by the state-owned Hindustan Aeronautics Ltd (HAL).

The deal has become controversial with the Opposition, led by the Congress, claiming that the price at which India is buying Rafale aircraft now is Rs 1,670 crore each, three times the Rs 526 crore, the initial bid by the company when the UPA was trying to buy the aircraft. It has also claimed the previous deal included a technology transfer agreement with HAL.

Senior Congress spokesperson Abhishek Manu Singhvi said, “We are the Congress — we have no direct access, we are not a party to the court proceedings, but all over your (media) domain, you have these copies and we have all got it from you. Now this needs to be studied... two or three things are obvious.

“This is like 20 pages. One — these 20 pages are like ‘Hamlet’ without ‘Prince of Denmark’. ‘The Prince of Denmark’ is the price. Price we still do not have. Prince of Denmark remains elusive.

“There is a virtual admission that the Cabinet Committee on Security was not consulted before. You will consult after giving the contract or you will consult before the contract? Contract meaning before giving a word to the President and country of France. It is common ground that the CCS is consulted for the first time after you have given your solemn, sovereign word in France.”

The UPA deal, struck in 2012, was not a viable one, former defence minister Manohar Parrikar had previously said. The NDA has said the current deal also includes customised weaponry.

The deal has also become controversial on account of a partnership between Anil Ambani’s Reliance Defence and Dassault for a joint venture that will tap some of the offset opportunity related to the deal.

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