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Rafale deal: Centre makes documents public, says defence procurement procedure followed, pricing details negotiated on 'better terms'

The document titled "Details of the steps in the decision making process leading to the award of 36 Rafale fighter aircraft order" stated that the process as laid down in the Defence Procurement Procedure-2013 has been followed in procurement of the Rafale aircraft.

Edited by: India TV News Desk, New Delhi [ Updated: November 17, 2018 7:49 IST ]
Prime Minister Narendra Modi had announced the procurement

Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after talks with the then French President Francois Hollande on April 10, 2015 in Paris.

The Centre on Monday complied with a Supreme Court order and handed over to petitioners, who sought a court-monitored CBI probe into the procurement of 36 Rafale fighter jets from France, the document detailing the decisions taken to procure the aircraft. 
 
The document titled "Details of the steps in the decision making process leading to the award of 36 Rafale fighter aircraft order" stated that the process as laid down in the Defence Procurement Procedure-2013 has been followed in procurement of the Rafale aircraft.
 
The Centre's stand was reflected in a document submitted to the court, which had asked the government to furnish details and the steps taken in the decision making process for the procurement of the jets.
 
The apex court directive on October 31 came after a group of petitioners approached it and sought the court-monitored probe into the procurement of 36 Rafale jets. The document was also handed over to the petitioners, including former BJP leaders and Union ministers Yashwant Sinha and Arun Shourie.
 
The document also said that the Indian negotiating team was constituted which held negotiations with the French side for about an year and approval of the CCS, being the Competent Financial Authority, was taken before signing the Inter-Government Agreement.
 

PRICING DETAILS FOR 36 RAFALE FIGHTER JETS NEGOTIATED ON BETTER TERMS: CENTRE TELLS SC

In its report, the Centre said that the pricing details for the 36 Rafale jets were negotiated on better terms than the pervious deal.
 
"The approval of Defence Acquisition Council(DAC) for procurement of 36 Rafale aircraft was taken, Indian Negotiating Team (INT) was constituted which conducted negotiations with the French side for about a year and approval of CCS being Chief Financial Authority(CFA) was taken before signing the IGA."
 
The inter-government agreement (IGA) was signed by the defence ministers of both countries on Sept 23, 2016.
 
"As mandated by Defence Acquisition Council, Indian negotiating team completed negotiations and arrived at better terms relating to price, delivery and maintenance as compared to the earlier offer of Dassault Aviation," the document said.
 
Congress has alleged that the NDA government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government when it was negotiating a deal for procurement of 126 Rafale jets.
 
The document also dismissed repeated allegations by Congress President Rahul Gandhi that Prime Minister Narendra Modi forced the French company Dassault Aviation to select a Reliance group firm of Anil Ambani as an offset partner to help it "pocket" Rs 30,000 crore.
 

ORIGINAL EQUIPMENT MANUFACTURER FREE TO CHOOSE INDIAN OFFSET PARTNER: CENTRE

The Centre told the Supreme Court Monday that as per the Defence Offset Guidelines, the Original Equipment Manufacturer (OEM) is free to select its Indian Offset Partners (IOPs) for implementing the offset obligation in the deal.
 
Justifying its stand on the Rafale deal, the Centre said that to promote indigenisation, a robust offset clause has been included in the Defence Procurement Procedure (DPP) since 2005.
 
It said the aim was to leverage "our capital acquisitions to develop the Indian defence industry, improve defence research and encourage the development of synergistic sectors such as civil aerospace and internal security". 
 
It further said: "The offsets are to ensure that for every dollar that went to a foreign arms supplier, 30-50 per cent get back into India for an investment or procurement. As per DPP-2013, the offset clause would be applicable for all procurement proposals where indicative cost is Rs 300 crore or more involving outright purchase from foreign/Indian vendors and purchases from foreign vendors followed by licensed production."
 
The Centre said that offset discharge is to be undertaken through various offset avenues like direct purchase of eligible products/services, FDI in Joint Venture and transfer of technology/provision of equipment. 
 
"As per the Defence Offset Guidelines, the vendor/ Original Equipment Manufacturer (OEM) is free to select its...IOPs for implementing the offset obligation," it said.

 

HAL FAILED AS OFFSET PARTNER DUE TO UNRESOLVED ISSUES WITH DASSAULT. 74 INT MEETINGS TOOK PLACE BEFORE INKING RAFALE DEAL: CENTRE TELLS SC

 
The Centre told the Supreme Court on Monday that state-owned Hindustan Aeronautics Ltd (HAL) failed to become an offset partner in the Rafale deal as there were several unresolved issues it had with French company Dassault.
 
In the documents submitted before the top court, the government claimed that the issues pertained to lack of common understanding between HAL and Dassault Aviation.
 
"The contract negotiations could not conclude mainly due to unresolved issues related to 108 aircraft to be manufactured in India. These issues pertained to lack of common understanding between HAL and Dassault Aviation on following," the documents said.
 
It said HAL required "2.7 times higher man-hours compared to the French side for the manufacture of Rafale aircraft in India".
 
The Centre also said that s many as 74 meetings of the Indian Negotiating Team (INT) took place, including 26 with the French side, from May 2015 to April 2016 on the Rafale deal.
 
INT was constituted to negotiate the terms and conditions of the procurement of 36 Rafale aircraft.
 
The INT was headed by the Deputy Chief of Air Staff (DCAS) of IAF and comprised of the Joint Secretary & Acquisition Manager (Air); Joint Secretary (Defence Offset Management Wing); Joint Secretary & Additional Financial Advisor; Finance Manager (Air); Advisor (Cost) and Assistant Chief of Air Staff (Plans) as members from Indian Government side.
 
The French side was headed by the Director General of Armament (DGA), Ministry of Defence, Government of France, it said.
 

DELAY IN UPA GOVT IN FINALISING MMRCA PROCESS NECESSITATED RAFALE DEAL: CENTRE

 
Delay by the UPA government in finalising the Medium Multi-Role Combat Aircraft (MMRCA) process led to adversaries inducting 4th and 5th generation jets and there was an urgent need to "arrest the decline" in the number of IAF fighter squadrons, the Centre told the Supreme Court on Monday.
 
Giving the sequence of events on the Rafale deal, the document said a proposal to buy MMRCA was sent from the Indian Air Force to the government and tenders for 126 fighter jets were issued by India 2007.
 
"During this long period of inconclusive 126 Medium Multi-Role Combat Aircraft (MMRCA) process, our adversaries inducted modern aircraft and upgraded their older versions. They acquired better capability air-to-air missiles and inducted their indigenous fighters in large numbers.
 
"Further, they modernized and inducted aircraft with advanced weapon and radar capabilities," said the document submitted to the apex court.
 
It said that as per available information, "adversaries inducted more than 400 fighters (equivalent to more than 20 Squadrons) during the period from 2010 to 2015".
 

GOVT'S RESPONSE PROVES CCS NOT CONSULTED BEFORE FINALISING RAFALE DEAL: CONGRESS

 
The Congress Monday said the Centre's response to the Supreme Court on the Rafale issue was a "virtual admission" that the Cabinet Committee on Security was not consulted before finalising the deal with France. 
 
Congress spokesperson Abhishek Singhvi also criticised the government for not disclosing the price of the Rafale fighter jets, alleging that the saffron party was being "elusive" and was beating around the bush over the pricing issue.
 
"There is a virtual admission that the Cabinet Committee on Security (CCS) was not consulted before. Will you consult after giving the contract or before the contract?" he said. 
 
"It is common ground that the CCS was consulted for the first time after you gave your solemn, sovereign word in France," he alleged. 
 
"The government is trying to mislead and beat around the bush as is being witnessed for the past one year, as it does not have an answer on this," Singhvi said.
 
The Congress leader said he was relying on the documents in public domain furnished to the party, and would come out with a detailed response to the Centre's submission before the top court on the matter later. 
 
"We are the Congress Party, we have no direct access, we are not a party to the court proceedings but all over your domain - you have these copies and we have all got it from you. Now this needs to be studied and I can assure you that we will be troubling you with a separate Press Conference.
 
"This is like 20 pages and these 20 pages is like 'Hamlet' without 'Prince of Denmark'. 'The Prince of Denmark' is the price. Price we still do not have. Prince of Denmark remains elusive," Singhvi added.
 
Prime Minister Narendra Modi had announced the procurement of a batch of 36 Rafale jets after talks with the then French President Francois Hollande on April 10, 2015 in Paris. The final deal was sealed on September 23, 2016.
 
The estimated cost of the deal is Rs 58,000 crore.
 
The Rafale fighter is a twin-engine Medium Multi Role Combat Aircraft (MMRCA) manufactured by French aerospace company Dassault Aviation.
 
The apex court had said details, including the steps in the decision making process for the procurement of jets, which could "legitimately" be brought into public domain, be made available to the parties who have filed petitions before it in the matter.
 
It had also asked the Centre to place before it in a sealed cover within 10 days the pricing details of 36 Rafale fighter jets India is buying from France. Later, the Centre also submitted the price details of the fighter jets in a sealed cover to the court.
 
The apex court, which will hear the matter on November 14, had categorically told the Centre that if the pricing detail was "exclusive" and could not be shared with the court then the Centre should file an affidavit in this regard and say so.
 
(With PTI inputs)

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