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The deal is not even an IGA, far from it being a G-to-G contract, because Dassault, a private company, and not the French government, is the supplier of the 36 aircraft. Consequently, the French government has refused to guarantee the supply of the aircraft in terms of the contract. Since Dassault was responsible for the supply, the contract should have retained the integrity clause along with clauses pertaining to commissions. The clauses relating to penalties and anti-corruption should not have been excluded. The PMO, presumably, intervened to have these clauses removed. No reason has been given as to why this was done and at whose instance.
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Withdrawal from the deal by the DAC would have embarrassed the Prime Minister. Therefore, the French government found it easy to reject stipulations that would later embarrass them. The guarantee for supplies was replaced by a Letter of Comfort, which in legal terms, is not enforceable. Even payments by the French government to Dassault through an escrow account was rejected, perhaps because the French did not wish to be saddled with that responsibility.
The CAG has let us down in more than one way. First, its report limits itself to the pricing issue of the 36 aircraft and concludes that the deal was 2.86% cheaper than the one which was to have been finally negotiated by the UPA. The CAG report does not disclose all the facts and on non-transparent assumptions arrived at this conclusion. It is difficult to scrutinise the rationale behind this conduct. Second, the CAG has chosen not to deal with the cavalier manner in which the Prime Minister picked 36 aircraft off the shelf. Third, the report ignores the procedures required to be followed under the DPP of 2013.
It also chooses not to refer to the dissent notes of the Indian Negotiating Team and thus fails to provide justification for overruling them. Further, it fails to explain the reasons why the anti-corruption and other clauses were not included in the final terms of the contract. Though the CAG comments on the issue of financial impact of not providing for guarantees, it chooses not to deal with reasons why guarantees were not provided for.
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What is most surprising is that the CAG seeks to criticise the UPA for choosing the Rafael but is silent on the Prime Minister’s decision to endorse the purchase of the aircraft. The objective for reducing the number of aircraft from 126 to only 36, to augment the depleting strength of the Indian Air Force, does not seem to have been achieved as the report itself concludes that the delivery schedule under the new deal is shorter only by one month when compared to the timelines under the UPA’s deal.
By not rising to the occasion, the Office of the CAG has let itself down. The CAG has gone out of its way to protect this government. It is the integrity of the office of the CAG that needs protection. Image Credit - YouTube / CAG Office website / Bharat Samachar TV
(Kapil Sibal is a Rajya Sabha MP, former Union Minister, and a senior Congress leader.)
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Disclaimer: The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of Indian Observer Post and Indian Observer Post does not assume any responsibility or liability for the same. We are just reproducing this article with credit to The Hindu (March 7, 2019) for our readers, where it was published originally.