< ePaper Just In 13 1hr House passes resolution to end U.S. support for Yemen war 14 1hr Netanyahu tones down Iran talk — in English 15 1hr Rahul takes on Modi in home turf with Valsad rally 1 42mins Mamata for national pre-poll tie-up 2 1hr Resurgent Jaish poses new challenge to security apparatus 3 1hr Pulwama attack: Suicide car bombing returns to the Valley after 18 years 4 1hr India signs defence pacts with Germany and Sweden 5 1hr Government’s failure to introduce Citizenship Bill in Rajya Sabha roils BJP 6 1hr Gujjar stalemate continues in Rajasthan 7 1hr Hero’s welcome for Conrad Sangma in Meghalaya after his stand against Citizenship Bill 8 1hr Rafale deal: Erasures in CAG report significant, says Chidambaram 9 1hr French govt. responsible for price, delivery in IGA: envoy 10 1hr CAG pulls up IAF for helicopter deal 11 1hr Congress Working Committee meet in Gujarat to firm up alliances 12 1hr Ex-diplomats call for Brexit delay 13 1hr House passes resolution to end U.S. support for Yemen war 14 1hr Netanyahu tones down Iran talk — in English 15 1hr Rahul takes on Modi in home turf with Valsad rally 1 42mins Mamata for national pre-poll tie-up 2 1hr Resurgent Jaish poses new challenge to security apparatus 3 1hr Pulwama attack: Suicide car bombing returns to the Valley after 18 years 4 1hr India signs defence pacts with Germany and Sweden 5 1hr Government’s failure to introduce Citizenship Bill in Rajya Sabha roils BJP 6 1hr Gujjar stalemate continues in Rajasthan 7 1hr Hero’s welcome for Conrad Sangma in Meghalaya after his stand against Citizenship Bill 8 1hr Rafale deal: Erasures in CAG report significant, says Chidambaram 9 1hr French govt. responsible for price, delivery in IGA: envoy 10 1hr CAG pulls up IAF for helicopter deal 11 1hr Congress Working Committee meet in Gujarat to firm up alliances 12 1hr Ex-diplomats call for Brexit delay 13 1hr House passes resolution to end U.S. support for Yemen war 14 1hr Netanyahu tones down Iran talk — in English 15 1hr Rahul takes on Modi in home turf with Valsad rally Subscribe now Sign in / Sign up Auditor’s account: on Rafale deal Share On 0 Opinion Editorial Editorial Auditor’s account: on Rafale deal February 15, 2019 00:15 IST Updated: February 15, 2019 00:12 IST Share Article 2 0 PRINT A A A The CAG report does not allay all doubts about the Rafale deal The price-redacted audit report on the process to acquire 36 Rafale fighter jets is unlikely to bring closure to the controversy over the deal. The report of the Comptroller and Auditor-General of India tabled in Parliament comes in the midst of a vigorous campaign by the Opposition that is questioning the process, based on media revelations about possible lapses and deviations and significant points raised by dissenting members of the Indian Negotiating Team (INT). The Modi government can draw comfort from the fact that the CAG report concludes that the 2016 agreement is slightly better in terms of both pricing and delivery than what was under negotiation in 2007 during the UPA regime. However, the report does not allay all doubts. Pegged at 2.86%, the price advantage in the contract over the 2007 offer is marginal. It is a far cry from the 9% saving claimed by the government. The delivery schedule is only one month sooner than the estimated outer limit in the earlier process. The CAG has found fault with Dassault Aviation being allowed to retain the gains made by the absence of a bank guarantee, which, if executed, would have come with significant charges. Disappointingly, the CAG has not quantified this amount, though it declares that it should have been passed on to the Defence Ministry. The 2007 price offered by Dassault included bank charges, and its absence in the 2016 contract is a clear benefit to the company. In other words, the ‘advantage’ is lower than the 2.86%. While the key question of pricing is sought to be resolved by the CAG by comparing the auditors’ aligned price with the INT’s computation, some issues remain unaddressed. The original issue of bringing down the total acquisition from 126 to 36 aircraft does not draw much comment. Also, the huge outgo on the India-Specific Enhancements (ISEs), despite the final figure being projected as a 17% saving on the aligned offer, is something that requires deeper examination. While auditing the earlier process, the CAG found that ISEs were upgrades allowed to be made so that Dassault’s bid would be compliant with qualitative requirements. Even a team of Ministry officials that examined in March 2015 the integrity of the earlier process concluded that “the acceptance of [Dassault’s] additional commercial proposal after bid submission date... was unprecedented and against the canons of financial propriety.” Dassault was not the lowest bidder in the earlier process, and its technical bid had been rejected. Perhaps, this presented an opportunity to the present regime to reopen the entire process to buy Medium Multi-Role Combat Aircraft (MMRCA) and invite fresh bids. However, it chose the IGA route with France, possibly for diplomatic reasons. The CAG identifies as a major problem the fact that the technical requirements are too narrowly defined for most vendors to comply with. The message from the report is that defence acquisition processes require reforms and streamlining.