Rafale price is 20% cheaper than UPA deal, says Jaitley

Launching a counter-attack on Congress on the Rafale deal, Union Finance Minister Arun Jaitley on Wednesday said the price of a fully weaponised combat jet as per the contract inked by the BJP-led NDA government was 20% cheaper than the price negotiated by the Congress-led UPA government.

Even the price of the basic aircraft (without weapons and India-specific add-on) was 9% cheaper in the new deal, Jaitley said, hitting out at Congress for launching a false campaign.

In a blog post Jaitley, who served as defence minister for nearly 11 months in two short tenures, wrote at the concluding phase of the deal that the UPA government on June 27, 2012, decided to re-examine the deal, abandoning an 11-year-old exercise and putting national security at risk.

The in-principle approval for Acceptance of Necessity (AON) of procurement of 126 replacement aircraft was given by the Atal Bihari Vajpayee government in June 2001.

The UPA government approved the AON and a Request for Proposal (tender) was issued on August 28, 2007.

The UPA government found two vendors Dassault Aviation and EADS to be compliant to the RFP requirements.

It took UPA five more years to commence the negotiations and in January 2012 the contract negotiation committee determined Dassault Aviation to be L1 (the lowest bidder fulfilling all the criterion).

“For reasons best known to the UPA government, on June 27, 2012, the deal was directed to be re-examined, which effectively meant that the entire eleven-year exercise was abandoned and the process was to be undertaken afresh. India’s squadron strength was depleting because of age. This slow and casual approach of the UPA government seriously compromised national security requirements,” Jaitley wrote.

The Finance Minister claimed the government-to-government contract to buy the combat jets from France has no connection with the Anil Ambani-led Reliance Defence— a charge levelled by Congress and dissidents like Arun Shourie and Yashwant Sinha.

“Any Original Equipment Manufacturer (In this case Dassault Aviation) under the offset policy can select any number of Indian partners, both from the private sector and the public sector, for offset supplies? This has nothing to do with the government and any private industry having benefited from the government is a complete lie,” he said.

Blaming the Congress party and its president Rahul Gandhi for launching a false campaign based on untruth, Jaitley said, the Opposition party's efforts of raising these issues were to further delay a defence procurement so that India’s defence preparedness further suffered.

“How is it that Rahul Gandhi quoted a price of Rs 700 crores per aircraft in Delhi and Karnataka in April and May this year? In Parliament, he reduced it to Rs 520 crore per aircraft, in Raipur he increased it to Rs 540 crores; in Jaipur, he used the two figures – Rs 520 crores and Rs 540 crores in the same speech. In Hyderabad, he invented a new price of Rs 526 crores. Truth has only one version, falsehood has many,” he wrote.

The defence ministry had informed the Parliament that base price of a Rafale aircraft is Rs 670 crore “without the associated equipment, weapons, India specific enhancements, maintenance support and services.”