Modi’s ‘Out of Blue’ Decision to Buy 36 Rafale Pushed up Price by 41%, Says Report

NEW DELHI: Prime Minister Narendra Modi’s decision to accept the cost of €1.3 billion for the ‘design and development’ of 13 India-specific enhancements over 36 Rafale aircraft was the key reason that pushed the price of each aircraft by 41%, The Hindu reported on Friday, flaring up the ongoing political storm over the controversial deal, with the Opposition stepping up its demand for a JPC to probe the deal.

According to The Hindu:

“Prime Minister Narendra Modi’s decision, announced out of the blue in Paris on April 10, 2015, to buy 36 Rafale fighter jets from France instead of the 126 asked for by the Indian Air Force for six squadrons pushed the price of each fully fitted, combat-ready aircraft up by 41.42%. It was the National Democratic Alliance government’s acceptance of the cost of €1.3 billion claimed for the ‘design and development’ of 13 India Specific Enhancements (ISE), and the distribution of this ‘non-recurring cost’ over 36 instead of 126 bare-bones aircraft, that was the major reason for the big increase in price.”

Looking into how procedures and objections of key officials were bypassed , the report delves deeper into ‘ how and why’ the price of the Rafale fighter jet of F3-R standard  “with practically the same configuration and capabilities, changed substantially over three points, in 2007, 2011 and 2016”. The report finds that in the 2007 bid by Dassault, the ‘design and development’ cost of €1.4 billion was to be spread over 126 aircraft that were negotiated by the United Progressive Alliance (UPA) government in 2007.

Also Read : Sitharaman on HAL & Rafale: Misdirection and Alternative Facts

“Although this fixed cost was negotiated down to €1.3 billion in the 2016 inter-governmental deal, it was distributed over 36 fighter jets. This straightaway meant and increase of €25 million in the price of each aircraft, as compared with the UPA era bid by Dassault.”

It adds that, “The increase of €25 million was far greater than the 9% reduction in the price of a bare-bones aircraft offered by France in 2016. That this discount was applied to the price of a bare-bones, and not a fully fitted, combat-ready, Rafale was confirmed by Dassault Aviation Chairman and CEO, Eric Trappier, in a November 2018 interview to ANI.”

The report also suggests how the Modi government did not negotiate with another bidder, Eurofighter, despite it offering 20% discount.

On several ruling BJP leaders’ attempt to blunt the Opposition’s questions over the pricing of the Rafale aircraft and drawing parallels with the Bofors scam during the Rajiv Gandhi government, the report by veteran journalist N .Ram, whose investigative reports formed the nucleus of the Bofors expose that brought down the Rajiv Gandhi government, says:

“The process of decision-making on a vital defence acquisition in 2015-2016 does bear an eerie resemblance to how decisions were made in 1985-1986; but unlike Bofors, where journalistic investigation was able to uncover corruption disguised as ‘commissions’ paid secretly into Swiss bank accounts, no money trail has been discovered so far in the current case. What seems guaranteed is that we have not heard the last of l’affaire Rafale.”

Also Read : Rafale Deal: Many Questions Remain Unanswered

Reacting to report, Congress and the Communist Party of India (Marxist) on Friday demanded and urgent Joint Parliamentary Committee (JPC) to probe the deal in the light of “new revelations.”

"In the light of new facts and revelations in The Hindu, the question gains greater urgency: why did the government buy only 36 Rafale aircraft instead of 126 aircraft required by the Air Force?" former Finance Minister P Chidambaram wrote on Twitter.

Accusing the Modi government of helping their “crony businessmen” friends at the cost of national security, CPI (M) general secretary Sitaram Yechury tweeted:  "No doubt that the deal for 36 Rafale fighter jets with France was done in a great hurry by Modi for the benefit of his crony businessman, at the cost of India's national security and at a heavy cost to the Indian exchequer. It is crystal clear now, and no amount of spin will help."

Yechury said only a JPC can examine the whole Rafale scam by going through all the official documents and calling requisite officials and ministers for examination. “Modi govt wants to block it because of these facts which have emerged now," Yechury added.

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