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NEW DELHI: The government has for the past several weeks maintained it cannot disclose the financial break-up of the Rs 59,000 crore (7.87 billion Euro) contract for 36 Rafale fighters due to a secrecy pact with France, but it had disclosed the cost per aircraft not long after the deal was signed in September 2016.
To a specific question on the cost per aircraft in the deal in Rajya Sabha on Monday, defence minister Nirmala Sitharaman in a written reply said, “As per ‘Article-10’ of the Inter-Governmental Agreement (IGA) between Government of India and Government of France on the purchase of Rafale aircraft, the protection of the classified information and material exchanged under IGA is governed by the provisions of the Security Agreement signed between the two nations in 2008.”
But junior minister for defence Subhash Bhamre, in a written reply to a question in Lok Sabha on November 18, 2016, had stated, “IGA with the Government of France has been signed on September 23, 2016, for purchase of 36 Rafale aircraft along with requisite equipment, services and weapons. The cost of each Rafale aircraft is approximately Rs 670 crore and all the aircraft will be delivered by April 2022.”
Though each jet may come for Rs 670 crore, the per unit cost zooms to almost Rs 1,640 crore if the overall deal is taken into account, which includes a deadly weapons package, all spares and costs for 75% fleet availability and performance-based logistics support for five years, among other things, as reported by TOI earlier.
The Congress has alleged since late last year that the “non-transparent” deal was vastly overpriced and violated defence procurement procedures, while also favouring the Anil Ambani-promoted Reliance Defence.
Reliance Defence has tied up with Rafale-manufacturer Dassault Aviation for a joint venture in India to execute the 50% offsets mandated under the mega fighter contract. Both the government and Reliance have strongly denied the allegations.
Sitharaman in Parliament has stated that her government ensured “a better price” for the jets as compared to the 126-fighter project that was being negotiated by the previous UPA regime. But she also admitted the two deals “cannot be directly compared” because the “deliverables” are significantly different in them.
Under the MMRCA (medium multi-role combat aircraft) project which was being negotiated by the UPA, 18 Rafales were to come in flyaway condition, with the rest 108 being licensed produced in India with transfer of technology (ToT).
But the negotiations remained hopelessly deadlocked, leading the NDA government to finally scrap the entire process in June 2015. The government subsequently went in for direct acquisition of 36 Rafales, without any transfer of technology, to meet the “critical operational necessity” of the IAF, which was down to just 33 fighter squadrons when at least 42 are required to take on the “collusive threat” from China and Pakistan.