Rafale deal of NDA 2.86% cheaper than UPA’s: CAG

Rafale deal of NDA 2.86% cheaper than UPA’s: Comptroller and Auditor General

The much-awaited Comptroller and Auditor General (CAG) report on the acquisition process of 36 fighter jets on Wednesday said the NDA Government’s Rafale deal was 2.86 per cent cheaper than the UPA’s offer in 2007, but the Government made major concessions to the French vendor by including unwarranted India-specific enhancements that led to price escalation.

The report said that as per the deal signed by the NDA regime, the delivery of the aircraft would be faster by just one month compared to the UPA schedules.

Image result for rafale deal

While the CAG report contradicted the claims made by several Government Ministers that the current price of Rafale jets in fly-away condition was nine per cent cheaper than the UPA’s deal, it said the price of the 36 fighter jets was 17.08 per cent cheaper after equipping it with India-specific enhancements under the new deal.

The report tabled in Parliament noted that the Government overruled the IAF suggestion to postpone six enhancements till more Rafale aircraft were procured in future. The IAF proposal was not accepted by the Defence Ministry which said this would tantamount to dilution of Air Staff Qualitative Requirements (ASQRs). The Ministry said this was also not in consonance with the basic framework provided by the Joint Statement of April 10, 2015 by the Defence Acquisition Council that aircraft must have same configuration.

Moreover, during negotiation of 36 aircraft in 2015, in view of the huge cost escalation and the reduced number of aircraft to be purchased, the Indian negotiation team headed by the Deputy Chief of Air Staff proposed to reduce the number of India-specific enhancements. But the Dassault Aviation, manufacturer of Rafale jets, stated since its price was a total package the Defence Ministry would have to take up the matter with the French Government.

The Defence Ministry, while rejecting the IAF suggestion, said reduction of India-specific enhancements was not considered after due deliberation as it was a temporary deferment only for cost reduction measure. The CAG noted that four of these enhancements were stated to be not required in the technical and staff evaluations. The cost of these four enhancements constituted about 14 per cent of the India-specific enhancements contracted cost.

The Ministry stated that “scaling down the requirement to limit cash outgo cannot be considered as saving,” the CAG report said.

The Rafale deal was inked in 2016 after Prime Minister Narendra Modi and then French President Minister Francois Hollande in a joint statement on April 10, 2015 announced an inter-governmental agreement (IGA) to procure 36 jets from France in fly-away condition.

The NDA Government went in for the IGA after scrapping the nearly decade long negotiations under the UPA regime for procuring 126 medium multi-role aircraft (MMRCA) often termed as mother of all deals then. Rafale, manufactured by Dassault Aviation of France, emerged as the lowest bidder but differences over various issues delayed the final inking of the deal. The MMRCA envisaged buying 18 jets in fly-away condition and the remaining to be manufactured by the public sector aviation giant Hindustan Aeronautics Limited (HAL) under a transfer of technology pact. The overall deal at that time was pegged about Rs 45,000 crores.

While the Congress has all along alleged wrongdoings in the Rafale deal claiming that the NDA Government bought the each aircraft at a huge cost of Rs 1,600 crore as against the UPA offer of Rs 560 crore.  However, the Government in Parliament two years back said the cost of each aircraft without weapons was Rs 670 crores.

In the backdrop of the NDA Government justifying outright purchase of 36 Rafales urgently to meet the operational requirements of the IAF due to its depleting squadron strength, the CAG noted as per the Dassault offer in UPA regime for supplying 18 jets off the shelf covered delivery schedule between 37 months to 50 months from the signing of the contract.

Audit indicts Govt for useless India-specific enhancements that led to price escalation

The next 18 aircraft, which were to be manufactured by the HAL were to be delivered from 49th to 72 months. However, the CAG noted as against the delivery period of 72 months in the earlier offer, the contracted delivery schedule for the latest deal was 71 months, thus an improvement of one month.

The report also mentioned that the Indian negotiating team had asked the French side for a delivery schedule of first batch of 18 jets in 24 months and the next batch of 18 in 36 months.  However, the French offered 18 jets by 36 to 53 months and remaining 18 aircraft to be delivered in 67 months. This was better than the delivery schedule of 2007 by five months.

The Indian negotiation team had apprehensions about this delivery schedule of 71 months because at the time of signing the contract the Dassault had an order backlog of 83 aircraft. Considering its production rate of 11 aircraft a year, clearing this backlog itself would take more than seven years. The Defence Ministry in its response to the CAG said the project was currently on schedule and the progress was being closely monitored by the resident project management team and also through the inter Governmental bilateral high level group. As per the IGA, the first aircraft will be delivered to India in October this year while the last one will be handed over in October 2022.

Meanwhile, the CAG in its report said in terms of engineering support package and performance-based logistics, the deal was 6.54 per cent expensive. The report did not include controversial issue of pricing as the Defence Ministry maintained that price could not be revealed due to security concerns and therefore the pricing part was redacted from the CAG report.

The report said it examined 11 contracts pertaining to the IAF signed between 2012-13 and 2017-2018 with a total value of Rs 95,000 crores. These included Rafale, Apache attack helicopters, Chinook heavy lift helicopters, PC-7 basic trainer aircraft, pods, missiles, additional C-130 J aircraft, ammunition and associated equipment, reconnaissance systems, full mission simulator for SU-30 and Doppler weather radar.

-Microstat | 14 February 2019 | New Delhi

Rafale – Lies, Shortlived lies and now further lies- Arun Jaitley

Rafale – Lies, Shortlived lies and now further lies

By- Arun Jaitley

          All the lies spoken on the Rafale deal has been exposed. The Supreme Court judgement is clear. Every word said against the Government has proved to be false. Every “fact” stated by the vested interests against the deal has proved to be manufactured. Truth has once again established its primacy. The creators of falsehood will still persist with falsehood even at the cost of their own credibility. Only their captive constituencies will clap.

The credentials of the disruptors

          Rafale is a combat aircraft with its weaponry required to improve the strike ability of the Indian Airforce. India is geographically located in a sensitive region. It needs to protect itself. The need for such a weapon cannot be overstated. When such defence equipments are purchased obviously some suppliers loose out. The suppliers are clever people. They understand who the “vulnerables” in India are.

Image result for rafale          As a political opponent Rahul Gandhi’s opposition to the deal was a desperate attempt. It was the UPA Government which had shortlisted the Rafale as it was technically the best and the cheapest. PM Modi in an Inter- Governmental agreement struck a deal with the French Government to further improve the terms and conditions including the prices on which the UPA had agreed.

          Rahul’s opposition was obviously for three reasons :-

          Firstly, he could not tolerate the fact that PM Modi has run the cleanest ever Government in recent Indian history. It is a scam-free Government where middlemen and scamsters had to take refuge outside the country.

          Secondly, Rahul Gandhi has the burden of a stigmatised legacy which was tainted by Bofors. He was desperate trying to bring an ‘immoral equivalence’ between Rafale and Bofors. But Rafale did not have middlemen, no kickbacks and obviously no Ottavio Quattrocchi.

          Thirdly, with international cooperation and Governmental cooperation, scamsters of the UPA Government are now being extradited into India. There is obviously a scare of who will talk how much.

Rahul Gandhi got instant support from the “career nationalists” of Lutyens Delhi. The permanent PIL petitioners have always preferred disruptions over concerns of national security. They are willing to cooperate with any one who hurts India. A new job creation has taken place in Delhi with the “loud mouths on hire” and “subject experts” notwithstanding their conflict of interest. The disruptionists alliance was, therefore, quite wide.

The lies that were spoken

          The fundamental truth that Bofors was a choice both for quality and price by the UPA was forgotten.

          The first lie was that only one man – the Prime Minister decided the transaction and that no discussion with the Air Force, Defence Ministry or the Defence Acquisition Council was held. It     was alleged that there was no Price Negotiation Committee, no Contract Negotiation Committee and no approval of the Cabinet Committee on Security. Every fact was false. There were dozens of meetings of Contract Negotiation Committee and Price Negotiation Committee. The bulk of the negotiations were done by the experts of the Air Force and the transaction was cleared by both the Defence Acquisition Council and the Cabinet Committee on Security.

          The judgement of the Supreme Court notes with satisfaction that procedural compliances have been done and the charges on the same are misconceived.

          The second major lie was that as against 500 Million Euros negotiated by the UPA, the NDA paid 1600 Million Euros per aircraft. This accusation was ‘fiction writing’ and a poor one at that. The Government submitted a sealed cover before the Supreme Court giving details in a comparative chart of the UPA era pricing and the present pricing. It showed that for the first aircraft, Government negotiated a 9% cheaper deal for a bare aircraft and 20% cheaper for a weaponised aircraft compared to the UPA. Since the UPA had negotiated the supply of 18 aircrafts, this gain of 9% and 20% would have further expanded with the supply of aircrafts after the first one since a more favourable escalation clause negotiated by the NDA Government would have further widened the price gap. The Court looked into the prices and never commented adversely on the same.

          The third major lie that the judgement of the Court expressed was that the Government of India favoured a particular business house. The Court noticed that the Government has nothing to do with the choice of the offset suppliers which was entirely done by Dassault. After the Court judgement, this debate should have come to an end. But neither lobbyists nor political opponents will ever give up their brief.

The misconceived demand for a Joint Parliamentary Committee (JPC)

         The opponents of Rafale had a choice of their forum to put their facts, they chose Supreme Court as their forum.

          The Court conducts a judicial review, it is a non-partisan, independent and a fair Constitutional authority. The Court’s verdict is final. It can’t be reviewed by anyone except by the Court itself. How can a Parliamentary Committee go into the correctness or otherwise to what the Court has said. Is a Committee of Politicians both legally and in terms of human resources capable of reviewing issues already decided by the Supreme Court? On areas such as procedure, offset suppliers and pricing, can a Parliamentary Committee take a different view of what the Court has said? Can the contract be breached, nation’s security be compromised and the pricing data be made available to Parliament / its Committee so that national interest is severely compromised with?  This would be putting the price details of the weaponry in public domain. What was the experience of Joint Parliamentary Committee (JPC) on the only occasion when they investigated a defence transaction?

          The B. Shankaranand Committee in 1987-88 went into the Bofors transaction. Since Parliamentarians are always split on party lines, it came out with a finding that no kickbacks were paid and the monies paid to the middlemen were ‘winding up’ charges. At that time only Win Chaddha appeared to be a middlemen. But then others including OttavioQuattrocchi, whose bank accounts got detected subsequently, were not entitled to any winding up charges. The reports / documents published by Chitra Subramanium and N. Ram in ‘The Hindu’ and all subsequent facts which came to light conclusively established each fact mentioned in the JPC to be factually false. It became a cover up exercise. After the Supreme Court has spoken the last word, it gets legitimacy. A political body can never come to a finding contrary to what the Court has said.

The CAG ambiguity

          Defence transactions go to the CAG for an audit review. CAG recommendations go to Parliament and are referred to the Public Accounts Committee (PAC) whose reports are then placed before the Parliament. This was factually and accurately stated by the Government before the Court. The audit review of Rafale is pending before the CAG. All facts are shared with it. When its report is out, it will go to the PAC. Notwithstanding this factually correct statement made, if an ambiguity has emerged in the Court Order, the correct course is for anyone to apply / mention before the Court and have it corrected. The past practice is that if in a factual narration anything needs to be corrected, any litigant can move to the Court for the same. This has been done.  It must now be left to the wisdom of the Court to state at which stage the CAG review is pending.      The CAG review is not relevant to the final findings on procedure, pricing and offset suppliers. But bad losers never accept the truth. Having failed in multiple lies they have now started an innuendo about the Judgement. Having failed in their initial falsehood, the Congress is now manufacturing further lies about the Judgement.

I am certain that the Congress Party will prefer disruptions over discussion on Rafale during the current session of Parliament. On facts it lied. The judgement of the Supreme Court conclusively establishes the Congress Party’s vulnerabilities in a discussion on defence transactions. It will be a great opportunity to remind the nation of the legacy of the Congress Party and its defence acquisitions – a great opportunity indeed for some of us to speak.

Writer is Union Minster of Finance, Government of India  

Shunglu panel report finds ‘gross misuse of power’ by Arvind Kejriwal

Shunglu panel report: Committee finds ‘gross misuse of power’ by Arvind Kejriwal government

Delhi’s former lieutenant-governor Najeeb Jung had set up a three-member committee led by Shunglu panel to examine the decisions taken by the Aam Admi Party Party (AAP) government and the committee has alleged “gross misuse of power” by the state government. The committee headed by former Comptroller and Auditor General (CAG) V K Shunglu reviewed 404 files of the Arvind Kejriwal-led government and alleged that there were irregularities with various appointments.

Shunglu panel, microstat

The report questioned Soumya Jain’s appointment as an adviser to Mission Director of the key health initiative that has won global praise for bringing free healthcare to the doorsteps of the city residents. “Soumya, who is an architect, was made advisor of the Delhi State Health Mission. However, she asserted her expertise with regard to mohalla clinics even though her CV does not support her claim. Second, the memorandum of the Association of State Health Society (Delhi) and rules and bylaws do not support such appointment,” the panel said in its 101-page report. “The file contained no evidence of who approved her appointment.

“These events can only be explained by the fact that Soumya is the daughter of Delhi Health Minister Satyendar Jain.”

The Shunglu Committee was set up by Jung in August last year after the Delhi High Court gave primacy to the Lt Governor in Delhi administrative affairs. The report was submitted to the LG’s office in November last year, weeks before Jung resigned on 22 December. Jung had called over 400 files on decisions taken by the AAP government in Delhi for a review.

The report observes that the genesis of the conflict lay in an April 2015 order issued by Kejriwal to all the departments. It directed officers to take decisions without consulting the Lt Governor on all subjects that have been transferred to the Delhi Assembly under Article 239AA(3)a of the Indian Constitution. The panel said the decision to allot land to the AAP to build a party office should be considered “null and void” and also questioned the allotment of residence to DCW chairperson Swati Maliwal.

The report which runs into over 100 pages deals with decisions, including the appointment of certain individuals as advisors to the government, taken by Kejriwal and his Cabinet where it had no authority do so and without the LG’s concurrence. “In pursuance of the directions of the chief minister in April 2015, it became the practice among ministers not to obtain the approval of the L-G and to provide approval at their level,” it said.

Among other issues, the report raised questions on the government posting officers to the Anti-Corruption Branch, its decisions on transfer and appointments of officers, foreign travel undertaken by ministers without the L-G’s sanction and appointment of lawyers.  According to NDTV, Jung, who was engaged in a power battle by Kejriwal and his ministers for months, had said the Delhi chief minister could face “criminal charges” over irregularities found by the panel.

The committee also raised questions on the appointment of Nikunj Agarwal, a relative of Kejriwal’s wife, as Officer on Special Duty (OSD) to the health minister.

“The appointment of Nikunj Agarwal as OSD to the health minister on co-terminus basis is a case of violation of recruitment procedure and lack of authority. Co-terminus appointment can be only made with the approval of the lieutenant-governor but the matter is not placed before the lieutenant-governor. The case does not seem fit for ex-post facto approval,” the report said.

The committee also questioned a cabinet decision of allotting government-owned 206, Rouse Avenue bungalow to the AAP as its office.

“Since land is a ‘reserved’ subject, this decision should be deemed null and void,” the report said, referring to land in Delhi not falling in the purview of the city government. “The elected government doesn’t have any power to deal with the subject of land, let alone allot it.”

The report also questioned Kejriwal’s decision to give additional charges of Secretary (Services) and Secretary (General Administration Department) to Rajendra Kumar who was then posted as secretary to chief minister.

“Rajendra Kumar was directed to hold additional charge of both the portfolios. This decision facilitated many subsequent actions which may not have been otherwise possible. “It is a different matter that this order was ab-initio null and void but remained in force till Kumar was suspended in June 2016. The subject of services does not belong to the Delhi government,” the report said.

The committee questioned the allotment of bungalows to Delhi Commission for Women (DCW) chief Swati Maliwal and MLA Akhilesh Pati Tripathi.

“Maliwal was provided accommodation though in the ordinary course she was not entitled to it as per provisions of the DCW… a residuary provision, can be invoked in a case as an exception to the general rule but, only the Lt Governor can approve such an exception. However, in this case the lieutenant-governor’s approval was not taken.”

The Shunglu panel said in the case of Tripathi, it was decided to allot a Type-V furnished accommodation to him.

Meanwhile, Delhi Congress president Ajay Maken on Thursday demanded the resignation of Delhi Chief Minister Arvind Kejriwal over the Shunglu Committee report that has accused the Delhi government of nepotism in making appointments and abuse of power.

Maken demanded that an inquiry should be launched to probe the matter on the basis of the findings of the Shunglu Committee report.

“If Arvind Kejriwal has any conscience left then he should immediately resign from the chief minister’s post,” Maken said.

“An inquiry should be launched in this connection. Kejriwal has no right to be on the post during the investigation,” he said.

Categorising the Shunglu panel report into three categories, Maken — who claimed that he got the report through an RTI — accused the Kejriwal-led Aam Aadmi Party (AAP) government of corruption, nepotism and misuse of public money for “unsanctioned” foreign tours of AAP leaders.

Maken also said that the Congress supporters and workers on Friday would stage a protest against AAP in all 272 wards of Delhi and make people aware about the AAP government’s “wrongdoing” as highlighted in the Shunglu Committee report.

-Apr 06, 2017

Mid day meals of poor quality: CAG

Mid day meals of poor quality: CAG

The quality of food served in schools under the Mid Day Meal Scheme continues to remain poor across the country, the Comptroller and Auditor General of India (CAG) said in a report tabled in parliament on Friday.

The report raised many red flags such as over-reporting of enrolment figures, financial indiscipline, poor quality of means and inadequate meals.

“Cases of cooking of poor quality meals in unhygienic conditions, inadequate and poor quality of infrastructure in terms of kitchen sheds and utensils were rampant across all states exposing children to health hazards,” it said.

Launched in August 1995 to boost education by increasing enrolment, retention and attendance simultaneously impacting on the nutrition levels of children, the Mid Day Meal Scheme was extended in 2008-09 to students of upper primary classes. The scheme is currently operational in 27 states and seven union territories.

According to the report, the Food Corporation of India did not serve the best quality of rice in Uttar Pradesh schools.

It said there were several complaints of poor quality meal cooked by Chandigarh Industrial and Tourism Development Corporation Limited which is engaged in cooking for schools in Chandigarh.

According to the report, the prescribed nutrition to children was not provided in schools of at least nine states, including the national capital.

In Delhi, samples of cooked food of the 37 service providers during the period 2010-14 were tested by the Sri Ram Institute of Industrial Research.

“Out of the 2,102 samples, 1,876 (89 percent) failed to meet the prescribed nutrition standard,” the report said.

The report showed a consistent decline of enrolment of children in the Mid Day Meal Scheme from 14.69 crore in 2009-10 to 13.87 crore in 2013-14.

Declining trends in enrolments during 2009-10 to 2103-14 were observed across the country in states such as Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Maharashtra, Uttarakhand, Lakshadweep and Puducherry.

The report also observed that the checks to ensure quality of meals and adequacy of nutritional value of food served to children remained only on paper.

The inadequate monitoring of the scheme by the human resource ministry and the states was a major bottleneck in implementation. The funds earmarked for monitoring and evaluation had been grossly underutilized, the report cited.

-18 December 2015 | IANS | New Delhi