'Chowkidar Auditor General report on Rafale eyewash'

In a blistering attack, the Congress Wednesday dubbed the CAG report on the Rafale deal as a "Chowkidar Auditor General" report and said the claim that the Modi government's contract to procure 36 fighter jets got 2.86 per cent cheaper price than the UPA-era offer was "fake".

The opposition party's rebuttal, in which it also termed the report an "eyewash", came hours after the much-awaited Comptroller and Auditor General (CAG) report on the controversial transaction was tabled in Parliament.

The Rafale deal signed by the Modi government to procure 36 fighter jets from France's Dassault Aviation got 2.86 per cent cheaper price than what was negotiated during the UPA regime in 2007, the CAG report said.

The "Chowkidar Auditor General" report is a mere "eyewash" as it even fails to mention the price of the Rafale aircraft, Congress' chief spokesperson Randeep Surjewala said in a statement.

Prime Minister Narendra Modi, then Finance Minister Arun Jaitley, and Defence Minister Nirmala Sitharaman have in Parliament reiterated the NDA purchase of the aircraft was 9 per cent to 20 per cent cheaper as compared to the UPA-era offer, Surjewala said.

Even the "eyewash" CAG report has demolished the argument of the BJP leaders by stating that the aircraft were cheaper by 2.86 per cent, he said.

"The manufactured figure of 2.86 per cent by the CAG is horribly fake and false," Surjewala said.

He argued that the CAG report records, but does not include payments or charges for a number of things.

The CAG report clearly records that performance guarantee and warranty, as offered by the Dassault Aviation in the 2007 contract, was equivalent to 10 per cent of the total value of the contract, he said.

The dissent note dated June 1, 2016, by three members of the Indian Negotiation Team quoted by 'The Hindu' puts the value of bank guarantee at 574 million euros, Surjewala said.

"The CAG report clearly records that this was a saving for Dassault Aviation. However, this value is not included to determine the total cost of the aircraft," he claimed.

Surjewala said the design and development cost or the cost of the India specific enhancements for 126 aircraft with transfer of technology was 1,400 million euros i.e. 11.11 million euro per aircraft, while the cost of India specific enhancements for 36 Rafale in flyaway condition without technology transfer was 1,300 million euros or 36.11 million euros per aircraft.

The CAG does not factor in the "300 per cent" increase in the cost, despite there being no transfer of technology, the Congress spokesperson said.

He claimed that the CAG report admits to the "failure in delivery schedule" of the 36 Rafale aircraft.

"The CAG categorically notes the apprehension expressed by the Indian Negotiation Team about non-delivery of Rafale aircraft as per the schedule. The CAG notes that Dassault Aviation has an order backlog of 83 aircraft and can only manufacture 11 aircraft in a year," he said.

The Modi government "utterly failed" to respond to this finding and the entire purpose of emergency purchase of Rafale aircraft by sacrificing the UPA deal, thus, stands demolished comprising India's national security, he said.

Surjewala also argued that the CAG "admits" the Modi government's "failure" on bank guarantee, sovereign guarantee, escrow account, and 'arbitration' clause, thereby "seriously jeopardising" India's national interest.

The CAG also "admits" to cost escalation under the Modi government purchase of 36 Rafale, he alleged.

The 126 aircraft MMRCA (Medium Multi-Role Combat Aircraft) deal in its Request for Proposal (RPF) of 2007 asked for "firm and fixed price" and the Dassault Aviation submitted the price of aircraft on that basis, Surjewala said.

In the 36 Rafale aircraft deal of the Modi government, the Dassault Aviation turned around and sought price escalation to get a beneficial term, he alleged.

"The justification of conversion from firm and fixed price to escalation cost by the Modi government only helps Dassault Aviation get millions of euros, thereby causing a loss to public exchequer," Surjewala said.

Without disclosing the pricing details in absolute terms, the Comptroller and Auditor General (CAG) report also said the NDA deal was 6.54 per cent expensive in terms of engineering support package and performance-based logistics for the Indian Air Force, while the training costs has got 2.68 per cent expensive than the 2007 offer.

With regard to India specific enhancements, the deal was 17.08 per cent cheaper, said the CAG report.

Earlier, the Congress, in a series of tweets, said, "The report has hidden behind the Aligned Price. The lack of numbers makes comparison of costs meaningless. This report remains a Chowkidar Auditor General Report."

The Congress said that the report was "redacted" which raised a big question mark on it.

"This is the first time in history that a CAG report to Parliament has redacted numbers. This in itself raises a big question mark on the report. The comparison of the prices is based on the Aligned Price, the calculation of which is opaque," it said.