Citing The Hindu report, Chidambaram, Yechury slam govt on Rafale deal

The Hindu on Friday reported that the PM ’s decision to buy 36 Rafale fighter jets from France instead of the 126 pushed the price of each fully loaded aircraft up by 41.42%.

January 18, 2019 11:32 am | Updated February 09, 2019 10:25 am IST - New Delhi

Former Union Finance Minister and Congress leader P. Chidambaram.

Former Union Finance Minister and Congress leader P. Chidambaram.

Opposition parties on Friday reiterated their demand for a joint parliamentary committee (JPC) to probe the Rafale deal and accused the Narendra Modi-led government of ‘compromising on national security’ by reducing the number of Rafale fighter planes ordered, from 126 to 36.

Addressing a press conference on The Hindu investigation, former Finance Minister P. Chidambaram said the Modi government had ‘wronged’ the country and ensured a windfall for Dassault Aviation, manufacturers of the Rafale fighters.

‘No explanation’

Mr. Chidambaram said ever since the renegotiated deal was signed by the Modi government on April 10, 2015, none from the government could explain why it scaled down the order.


“The answer to the question is now available through the splendid investigative report published by The Hindu today. We congratulate the newspaper for the report that has been published in public interest,” he said.

“The Air Force had asked for 13 India Specific Enhancements (ISE). The negotiated price was €1300 million that would have to be paid under both the UPA-negotiated deal and the NDA-negotiated deal. The twist in the story is over the amortisation or recovery by Dassault of the cost of ISE,” said Mr. Chidambaram and added, “Under the UPA-negotiated deal, it would have been spread over 126 aircraft. Under the NDA-negotiated deal it will be spread over 36 aircraft.”

“It seems to me that Dassault is laughing all the way to the bank. The government has wronged the country in two ways. Firstly, it has compromised national security by denying to the Air Force 90 fighter aircraft that they desperately need. Secondly, it has purchased two squadrons that will cost about €25 million more per aircraft and at 2016 exchange rate,(€25 million is equal to ₹186 crore) India will pay ₹186 crore more per aircraft,” he said.

“The windfall to Dassault is highly questionable. It is undeserved. It was certainly not through as per negotiation, it was a deliberate decision,” Mr. Chidambaram said. He claimed the revised terms not only ensured that Dassault could recover its cost/amortise the ‘design and development’ cost of ISE in a shorter period of time but also get a higher ‘value of money.’

“Should the government place an order for another 90 aircraft on Dassault, they [Dassault] will certainly charge the ISE-loaded price at which it sold 36 aircraft, although the ISE cost would have been recovered…Perhaps for this reason the government deleted the ‘follow on’ clause to buy more aircraft (up to 50% of the original order on the same terms and conditions),” Mr. Chidambaram said.

Demand for JPC again

The Congress leader also questioned the manner in which decisions were taken by the Indian Negotiating Team (INT), by a 4:3 majority.

“The vote of 4-3 itself tells a story. Has it ever happened before in a defence purchase? Why was it so important in this deal to take every decision by a 4-3 vote brushing aside every objection? I mean as a lawyer, I have heard about it in judgments in Courts but never in a Government decision,” he said. “I think a JPC should be constituted and it should be requested as far as possible to submit its report by the end of March. I think it can be done,” he said, in reply to a question.

‘Done in great hurry’

CPI (M) general secretary Sitaram Yechury said Prime Minister Modi has been blocking a JPC because of the facts that have been emerging now. “No doubt that the deal for 36 Rafale fighter jets with France was done in a great hurry by Modi for the benefit of his crony businessman, at the cost of India’s national security and at a heavy cost to the Indian exchequer. It is crystal clear now, and no amount of spin will help,” tweeted Mr. Yechury, tagging the news report.

“These are real issues. We must ask who is responsible for this mess. The Prime Minister did everything. Neither the External Affairs nor Defence Minister was involved. So far he [PM] has not spoken directly on it. He was not even present in the Lok Sabha when the issue was debated,” CPI national secretary D. Raja told The Hindu .

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