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Chief of Rafale Negotiating Team Sticks to 9% Cheaper Claim, Says CAG May Have Used Different Calculation Method

On the controversy over the CAG’s findings that the aircraft were cheaper by 2.86% against government’s claim that they were cheaper by 9%, Sinha said there might be a difference in the “methods of calculation” by CAG and by government.

Shreya Dhoundial | CNN-News18

Updated:February 14, 2019, 2:24 PM IST
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Chief of Rafale Negotiating Team Sticks to 9% Cheaper Claim, Says CAG May Have Used Different Calculation Method
File photo of SBP Sinha.
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New Delhi: Air Marshal SBP Sinha, who led negotiations on Rafale fighter jet deal from the Indian side, has been a fierce supporter of the 2015 contract the government signed with Dassault Aviation for 36 Rafale jets.

In a conversation with News18, Sinha reacted to the CAG report, claiming that it reiterated the government’s claims that the aircraft were bought for cheaper price. On the controversy over the CAG’s findings that the aircraft were cheaper by 2.86% against government’s claim that they were cheaper by 9%, Sinha said there might be a difference in the “methods of calculation” by CAG and by government.

Edited excerpts:

How do you view the findings of the CAG report on Rafale?

The CAG report very clearly validates what the government of India has been saying all along. It dispels the malicious allegation campaign initiated against the 36 Rafael aircraft deal.

But the government claimed that they bought the bare aircraft at a discount of 9% compared to the offer under consideration during the previous government. The CAG finds that they were cheaper by only 2.86%.

Look at para 9 with the heading ‘Basic Aircraft Cost’ in the CAG report. The last line of the paragraph says ‘against this each aircraft was contracted in 2016 (under 36 Rafael contract) for DL2 MC, which was a saving of nine per cent’.

So even the CAG has validated that the basic aircraft cost was 9% cheaper. They have arrived at 2.68% as overall cost reduction and they have given a table where they have highlighted section-wise cost reduction, where the costs are same and where there is marginal increase.

The costs have come down by close to 17 percent in India-Specific Enhancements. And since the figures used by CAG and us are the same, it is for the ministry to sit across the table with the CAG and arrive at the correct figures because may be the methods of calculation are different.

The figures used by both CAG and us are the same. So this is something that needs to be discussed across the table and resolved.

The CAG also noted that some of these enhancements, which were part of the 2015 deal, were not wanted by the air force. But the government overruled the recommendations by the air force and went on to include four such India-Specific Enhancements.

It is unlikely that the government will go ahead and buy something that the Indian Air Force does not require. This entire fact is being misrepresented. What happened was that there are certain things that are mandatory to operate in Indian conditions, especially high-altitude airfield operations. Nobody has airfields at altitudes that we have in India.

So, what the Indian Air Force had proposed to the government was that if there is a need to reduce the price, we could postpone some of the India-specific enhancements, and not include it in the immediate procurement process.

It was an option discussed between the MoD and air headquarters. And MoD would only buy things that Indian Air Force wants. There is no way the Indian Air Force will be given things that it doesn’t want.

Another red flag raised by the CAG was on the delivery schedule promised by Dassault. The government claimed to have gone for an ‘emergency purchase’ of 36 jets in order to get them sooner than the delivery scheduled worked upon under the previous government.

But CAG finds that the delivery schedule has basically been advanced in the 2015 deal by only one month.

First and foremost, the Indian negotiating team never met and discussed this aspect with CAG because after the Inter-Governmental Agreement (IGA) was signed, the Indian negotiating team ceased to exist. The CAG looks into contracts after they have been signed. And secondly, the delivery schedule of the 36th aircraft is seven months earlier than it was in MMRCA procurement under previous government.

This one-month difference which the CAG has brought out in its report is based on the installation of software upgrades for the India-specific enhancement that will be done when the aircraft are in India after the certification of this India-specific enhancement has been done in France.

So the aircraft will be delivered seven months earlier and the process of software upgrade will start two months later. By the time it gets installed in the last aircraft, the difference will be of one month.

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