Basic Rafale 2016 costs less than 2007, weapons extra: Officials

Sources said that the figure of Rs 525 crore or approximately Euro 79 million per Rafale aircraft which Opposition parties have been citing is based on the manufacturer’s 2007 bid at the then exchange rate (I Euro = Rs 66.60).

Written by Sushant Singh | New Delhi | Updated: March 1, 2018 6:55 am
rafale deal, Rafale fighter, Rafale fighter deal, Modi government, Rafale fighter jets price, rahul gandhi rafale deal, congress, rafale jets, nirmala sitharaman Government does not intend to buy more Rafale fighters anytime soon, say sources.

THE NDA government negotiated procurement of 36 Rafale fighter jets from France, under a government-to-government deal in 2016, for a price lower than the one negotiated by the previous UPA government under a commercial bid by Dassault Aviation, top government sources have told The Indian Express.

Sources said that the figure of Rs 525 crore or approximately Euro 79 million per Rafale aircraft which Opposition parties have been citing — they have claimed that the NDA government paid more than what Dassault Aviation had quoted earlier — is based on the manufacturer’s 2007 bid at the then exchange rate (I Euro = Rs 66.60).

This, sources said, was the cost of a “bare” Rafale, without weapons, avionics, radars, missiles and other specific customisations for the IAF.

“The IAF told us that because we were buying only 36 Rafale and not 126, they needed them to be more potent. Meteor missiles, 75 per cent serviceability and some special requirements were insisted upon by the IAF. It even asked for two separate maintenance support flights for redundancy. These imposed additional costs which were not even thought of in 2011. They are two separate packages,” government sources said.

Meanwhile, a senior IAF officer told The Indian Express that a Rafale meets 100 per cent of IAF expectations of a modern fighter aircraft and another 36 Rafale jets would have been ideal for the IAF fleet, in terms of operational capability and reduced logistics support footprint.

But official sources said the NDA government had no intention, as of now, to buy more Rafale fighters anytime soon, and had not initiated any discussion with France on the subject. The decision on buying more fighter aircraft, sources said, had not been taken yet.

The IAF is authorised 42 squadrons of fighter aircraft but is down to 31 squadrons. If no new acquisitions are made, the number will be down to 27 by 2032 and 19 by 2042.

After extensive trials lasting years, the IAF in 2011 found that only the Eurofighter, offered by a consortium of UK, Germany, Italy and Spain, and the Rafale qualified its stringent norms. The deal was to be for 126 aircraft, out of which 18 were to be procured in fly-away condition while the rest were to be assembled in India by public sector HAL.

The 2007 bid from Dassault Aviation remained in a sealed cover when it was opened in 2011, along with that of the Eurofighter. The Rafale was found to have made the lower bid and was chosen for price negotiation by the Ministry of Defence.

As per the in-built escalation formula, the 2007 bid for each of the 18 Rafale would have amounted in 2015 to Euro 100.85 million (Rs 765.4 crore at 2015 exchange rate of 1 Euro = Rs 75.90), sources said. Similarly, the 2007 bid price for every Eurofighter would in 2015 have worked out to be Euro 102.85 million, higher than that of the Rafale.

In comparison, the price of each of the “bare” 36 Rafale bought in 2016 was Euro 91.7 million (Rs 696 crore at the 2015 exchange rate), lower than both the earlier Rafale and Eurofighter bids.

The additional costs were for the weaponry (Euro 710 million), spare parts (Euro 1,800 million), weather and terrain compatibility fits (Euro 1,700 million), and performance-based logistics support (Euro 353 million), sources said.

Under the 2007 bid, sources said, a fixed escalation of 3.9 per cent per year was envisaged for the entire delivery period of five to six years, while the negotiation in 2015-16 lowered it to an index-based escalation factor of 3.5 per cent. Sources claimed that this resulted in an assured saving of at least Euro 200 million to the exchequer.

“We didn’t negotiate with Eurofighter as it would be against the CVC guidelines to deal with the second-lowest bidder. The full price discovery of Rafale had already been done and audit of every sub-component concluded. Going with Rafale was the easiest and the fastest option,” the government source said.—(With ENS, New Delhi)

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  1. D
    Mar 4, 2018 at 8:03 am
    All comments are wrong! The Rafale is more capable than the Eurofighter, which seems to be having one problem after the other in British service. The Rafale was a clear winner in terms of cost, capability, and the French being more supportive of India during the period of economic sanctions. The plane has been selected by several airforces. This is a G to G deal, so no kickbacks now, as opposed to the earlier 126 plane deal by the previous govt, which is under a cloud of suspicion for kickbacks on this deal. This is certainly a more capable plane. The Indian navy is also looking at this plane to equip its aircraft carriers in the future.
    1. Mayur Panghaal
      Mar 3, 2018 at 10:12 pm
      Just tell the cost and configuration as you promised in parliament.Dont make it prolong agony like Modi degree.Why Reliance got contract just 3 days after formation of company ?
      1. Falcon Dave
        Mar 9, 2018 at 8:21 am
        What contract? There is no contract given yet to Reliance, don't talk nonsense.
      2. N
        Mar 2, 2018 at 11:05 am
        I’m not a specialist on government purchase protocols but I don’t understand when the deal is a government to govt deal at the highest level where does the question of bribes or kickbacks arise.. until of course there is gratification by the government of the vendor country, which is a very demeaning accusation to make.. It is like accusing the French establishment of indulging in wrong practices Don’t think it’s a very healthy signal going to the international community
        1. Zohaib Khan
          Mar 1, 2018 at 10:24 pm
          I personally urged the NDA goverment to go inn for another lot, to purchase of rafael fighter jet deal in the very same configuration and package deal... which is in light a breakthrough in terms of IAF technical operational approach, indian people now became too smart to not involve in any lac aar batein which are being aimed to weaken hindér indian armed forces modernisation and fighting capabilities... so plz forget the congress or anyother party for tht reason and make the nation what it deserves...
          1. Falcon Dave
            Mar 9, 2018 at 8:23 am
            Absolutely right!!!
          2. S
            Mar 1, 2018 at 9:36 pm
            Why do they consider only the 'bare' aircraft price for the selection of the bidder? as opposed to the combined aircraft weapons other systems together? If the ToT is not on the agenda, Eurofighter is known to be better than Rafael. The difference of just $2m can be considered as the same for re-negotiation process.
            1. Falcon Dave
              Mar 9, 2018 at 8:26 am
              Sam, the Euro fighter does not have Omni role capabilities, like Rafale. All the weapons are still not integrated on Typhoon, it is primarily an Air Superiority fighter with limited ground attack capabilities.
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