News reports have revealed that the price per Rafale aircraft that the UPA government agreed to was 40 per cent cheaper than what the NDA government agreed to in 2016.
French firm Dassault Aviation had offered Euro 19.5 billion for 126 Rafale fighters which was its winning bid. The quoted price averaged to Euro 155 million per aircraft.
On January 30, 2012, Dassault was announced the lowest bidder with the price of the deal amounting to Rs. 127,000 crore. By this, the cost of each Rafale fighter averaged to almost Rs. 1,000 crore.
According to Business Standard, the Euro 19.5 billion included the cost of 126 fighters, technology transfer, indigenization, India-specific enhancements, weaponry, spares and maintenance guarantees.
In comparison to this, if one looks at the deal sealed by the NDA government, it shows that it is exactly 40 per cent higher than Dassault’s 2012 quote. Where the average cost of one Rafale was Euro 155 million in the earlier deal, in the present deal the average cost per Rafale goes up by 40 per cent to Euro 217 million.
In September 2016, the NDA government agreed to buy 36 Rafale jets for Euro 7.8 billion, which averages Euro 217 million per Rafale.
It becomes unclear how the NDA government, including senior officials such as Defence Minister Nirmala Sitharaman and Finance Minister Arun Jaitley, claimed that it got Rafale jets at nine per cent cheaper rate than the UPA deal.
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There is another point which makes the difference between the two bids even more. The UPA government had negotiated with Dassault to buy 126 Medium Multi-Role Combat Aircraft (MMRCA), which involved supply of 18 Rafale jets in fly-away condition whereas the remaining 108 aircraft were to be manufactured in India by Hindustan Aeronautics Limited (HAL). This adds to the cost. Whereas, under the deal sealed by the NDA government, all the 18 Rafales bought were to be supplied in fly-away condition, which would cost much lesser.
Another thing which has come to fore is that even though the terms and conditions mentioned in the 2016 deal of 36 Rafale jets were quite similar to the ones in the 2007 tender, known as Request for Proposals (RFP), the NDA government paid Dassault 40 per cent higher per aircraft.
The reason given by the NDA government is that the 2016 contract includes elements that were not present in the 2007 tender. It said the deal included Euro 1.7 billion in avionics upgrades, called “India specific enhancements”; weapons worth Euro 700 million, essential spares worth Euro 1.8 billion and a Euro 350 million performance guarantee.
Business Standard reviewed the 2007 RPF and found out that it also included the same “India specific enhancements”, essential spares package as well as a 75 per cent performance guarantee.
With so many exposes, the Rafale deal is only getting more and more controversial and is compelling people to raise questions on the role of the government in the deal.