New Delhi: N Ram, in his latest report in Hindu, on Wednesday, has revealed that the cost of including bank guarantees, which the French suppliers in Rafale deal refused to follow, has cost India €574 million. This increased the estimated cost of the deal of 35 Rafale jets to €7.87 billion, expensive by €246.11 million than the deal initiated by the Congress-led United Progressive Alliance government.
The story revealed that the “report of the Indian negotiating team on procurement of 36 Rafale aircraft for Indian Air Force” has stated that negotiators and the ministry of law and justice had repeatedly asked the French side to provide bank guarantees. The ministry of law and justice had also advised that sovereign guarantees should be obtained from France “in view of the contract involving huge payouts value of procurement price before actual delivery of supplies and services, which de facto meant advance payment.” However, the French suppliers flatly refused to provide bank guarantee. Another alternative provided by the INT to resolve the concern, suggesting that the bank guarantee to be provided by the French side and the confirmation charges would be borne by India, has also proved unsuccessful.
The report in its paragraph 69 has stated: “The final offer of 7878.98 M€ (excluding additional mandatory weapons supplies of 10.55 M€) is 327.89 M€ lower than the aligned cost of 8205.87 M€ with respect of MMRCA [medium multi-role combat aircraft] offer without taking into account the impact of BG [Bank Guarantees], which has been brought out at Para-23 above [sic].”
According to an earlier Hindu report, the parallel negotiation carried out by the Prime Minister Office in 2015, had been protested by the defence ministry and the INT, claiming that the move had “weakened the negotiating position of MoD and the Indian negotiating team”. The report submitted by the INT has revealed that the parallel negotiation has benefited the French side, as the defence ministry and INT had to rely on what the PMO and national security advisor had agreed while negotiation.
Earlier, N Ram had reported that the Modi-government had intentionally waived provisions for anti-corruption penalties before signing the intergovernmental agreement and how the PMO conducted parallel negotiations with French government undermining the negotiating position of MoD and INT. He also exposed in his report in February that three senior officials from the defence ministry, who were also the domain experts on the INT of Rafale deal, had said the new Rafale deal of 36 jet aircrafts was not on “better terms” than the offer made by Dassault Aviation during Congress-led UPA government for 126 aircraft.