CAG says NDA's Rafale deal 2.86% cheaper; Cong says report not worth its paper

The Modi government secured a 2.86 per cent cheaper price for Rafale fighter jets than what was negotiated by the UPA regime, the CAG said on Wednesday, but flagged that removal of 'sovereign guarantees' only benefitted the French manufacturer, and not India.

The much-awaited audit report on the controversy-hit deal also pointed out that certain India-specific enhancements in the new deal were "not required" and the Ministry of Defence overruled the Indian Air Force's proposal to reduce the number of these enhancements.

Soon after it was tabled in Parliament, the report was lapped up by BJP to hit out at Congress with senior leaders and ministers from the ruling party asserting that the CAG has exposed "lies" of the opposition party chief, Rahul Gandhi, on the Rafale issue and it vindicates their position that Prime Minister Narendra Modi got the country a better deal in purchase of 36 fighter jets.

The Congress, however, rejected the CAG audit, saying it was an "eyewash" and "not even worth the paper it was written on" as it did not take into account the "dissent note" of deal negotiators. The party dubbed the CAG as 'Chowkidar Auditor General' and was joined by several other opposition parties in questioning the audit report.

At a press conference, Gandhi alleged that even the "manufactured figure" of 2.86 per cent decline in price shows that Prime Minister Modi, Finance Minister Arun Jaitley and Defence Minister Nirmala Sitharaman, had lied to Parliament by stating that the price of the "new deal" was 9-20 per cent cheaper than the UPA-era offer.

While CAG was silent on offset partners, a key point on which Congress has been attacking Modi alleging corruption in Anil Ambani's Reliance Group getting a key contract, the government auditor also redacted the absolute price details and only referred to percentage change from what were negotiated by the Congress-led UPA in 2007 for 126 jets to those in the final deal clinched by the BJP-led NDA in 2016 for 36 aircraft.

In its 157-page report, the Comptroller and Auditor General (CAG) observed there was no change in the price of 'flyaway aircraft package'.

Of total 11 counts on which the CAG compared the prices, there was no change in the price under total four heads, while prices actually rose on four other counts -- the training of pilots and technicians (2.68 per cent), engineering support package (6.54 per cent), performance based logistics (6.54 per cent) and tools, testers and ground equipment (0.15 per cent).

On three parameters, the price came down in the NDA deal -- India-specific enhancements (down by 17.08 per cent), weapons package (by 1.05 per cent) and services, products-operational support equipment and technical assistance, documentation, and programme managements (by 4.77 per cent).

The CAG said the IAF wanted to reduce six India-specific enhancements in the Rafale jet under the new deal in view of the "huge cost and reduced number of aircraft", but the Defence Ministry overruled it. It also pointed out that there were four India specific enhancements in the new deal that were "not required".

The audit report also said the delivery time of Rafale jets under the NDA deal was only a month less than what was negotiated by the UPA.

The CAG also flagged drawbacks of settling for a 'Letter of Comfort' rather than a sovereign guarantee by the French government and said Dassault Aviation, the French manufacturer of Rafale jets, benefitted from this.

The CAG said the new deal was 6.54 per cent expensive in terms of engineering support package and performance-based logistics for the IAF, while the training costs got 2.68 per cent expensive than the 2007 offer.

In the 2007 offer of 126 fighter jets, Dassault Aviation was to provide basic training to 26 pilots and 76 technicians at a certain cost. In 2015 deal for 36 Rafale fighter jets, the IAF increased the scope of training to 27 pilots, 146 technicians and two engineers.

For the overall price also, the CAG has said the new deal is 2.86 per cent cheaper.

Defence Minister Nirmala Sitharaman had earlier said the deal struck by the Modi government was 9 per cent cheaper. Congress, on the other hand, has been alleging that the price increased to Rs 1,600 crore per aircraft in the deal signed by the Modi government, as against Rs 520 crore during the UPA time.

Soon after the report was tabled in Parliament, Union Minister Arun Jaitley said the lies of the Congress and opposition parties stand exposed as the CAG report outlines that 2016 deal terms were lower in terms of price, faster in terms of delivery, while ensuring better maintenance and lower escalation.

Another senior BJP leader Ravi Shankar Prasad said Gandhi's "lies" have been exposed by the CAG report and demanded an apology from the Congress leader.

Gandhi, however, said the government's argument on price and faster delivery of Rafale fighter jets has been demolished and alleged that the only reason for the new deal is to give Rs 30,000 crore to industrialist Anil Ambani.

The government and Ambani have rejected the allegations.

BSP supremo Mayawati dismissed the report as "neither complete nor fully correct" and alleged that constitutional bodies were not been able to work with full honesty.

AAP leader and Delhi Chief Minister Arvind Kejriwal said Modi should speak the truth on the agreement between India and France.

The NCP also questioned the CAG report's "authenticity".