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CAG Rafale Report: Dassault Saved on Guarantees in New Deal, Didn't Pass it On

According to the CAG report, the 2016 Rafale deal negotiated by the Narendra Modi government was 2.86% cheaper than the one chalked out in 2007.

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Updated:February 13, 2019, 1:13 PM IST
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CAG Rafale Report: Dassault Saved on Guarantees in New Deal, Didn't Pass it On
File photo of a Rafale fighter jet.
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New Delhi: The 2016 Rafale deal negotiated by the Narendra Modi government was 2.86% cheaper than the one chalked out in 2007, the much-awaited CAG report on the controversial defence acquisition has revealed.

The report does not disclose the actual price of the 36 Rafale fighter jets contracted by the NDA government. However, it includes examination of the pricing.

Here’s a look at the key points mentioned in the report, which was tabled in Parliament on Wednesday:

- 2016 deal concluded at 2.86% less than 2007 deal

- 2016 deal included India-specific enhancements which the IAF said were not required; so the price could have been lower.

Master

- The ministry argued that the 2016 contracted price was 9% lower than the 2007 price. According to the audit, the basic flyaway aircraft was bought at the same price as that of 2007.

- In the 2007 offer, Dassault offered performance and financial guarantee which was 25% the value of the contract. The vendor had embedded this in the base price. But in the 2016 contract, no guarantees were embedded. This led to a saving for Dassault which was not passed on to the Govt of India.

- The Medium Multi-Role Combat Aircraft (MMRCA) committee rejected the deal on March 27, 2015. The committee recommended that the ongoing procurement should be cancelled.
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