The findings of the three domain experts in the Indian Negotiating Team are directly contrary to the two central claims made by the Indian government of a cheaper deal and faster delivery of fighter aircraft, claims that have been affirmed before the Supreme Court of India in official submissions.
The INT was for a firm and fixed benchmark price, but the French side converted the initial commercial offer of a fixed price into one based on an escalation formula.
The final price of €7.87 billion offered by the French side, which is escalation-based, is 55.6% higher than the firm and fixed benchmark price of €5.06 billion fixed by the INT.
M/s EADS, which had technically qualified, had given an offer of 20% discount on a fixed basis before negotiation. After adjustment for 36 aircraft, the price offered by the French side was much higher.
Dassault Aviation did not align the procurement cost of 36 Rafale aircraft with the corresponding offer in the MMRCA procurement process, which is of paramount importance in terms of the Indo-French Joint Statement. When the counter offer of 30% discount was made, the French side refused to take cognizance of this aspect.
Taking into account the financial impact of the bank guarantees (without even factoring in the effect of escalation), the final price offered by the French side was still 5.3% higher than the aligned cost of the commercial quotes submitted by M/s Dassault Aviation and M/s MBDA in the MMRCA procurement process.
During the MMRCA procurement process, Dassault Aviation did not meet certain ASQRs (Aerospace Supplier Quality Requirement) stipulated and the private French company offered to meet these deficiencies at an additional cost, terming them 'India Specific Enhancements'.
Accepting a Letter of Comfort from the French Prime Minister instead of Sovereign guarantee/Government guarantee or Bank guarantees would go against basic requirements of financial prudence.
The delivery schedules offered by the French side were longer than what was asked. Dassault Aviation had a backlog in deliveries for the Financial Year 2015 of 83 aircraft to various countries. The final delivery of the first 18 aircraft was slower than in t he MMRCA proposal.
