Rafale haunts NDA again, CAG claims offset obligations violated

Last Modified Thursday, 24 September 2020 (13:24 IST)
New Delhi:Pointing finger at Aviation, makers of fighter jets 36 of which India has contracted to purchase, the (CAG) has come down heavily on foreign vendors who fail to fulfill commitments in defence sector.
In its report titled "CAG's Performance Audit Report on Management of Defence Offset", the pointed out that the French fighter jet manufacturer and MBDA which supplied armaments for Rafale jets have not yet discharged 30 per cent of their offset obligation.
India has already received five Rafale fighter jets from the French manufacturer in the first batch of the delivery on July 29. They were formally inducted to (IAF) on September 10.  
 
The Rafale deal is worth Rs 59,000 crore and the opposition Congress party has criticised the BJP government for what it alleged were irregularities in the fighter jet deal."In many cases, it was found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments," the financial watchdog said in its report.
 
For instance "in the offset 4 contract relating to 36 Medium Multi Role Combat Aircraft (MMRCA), the vendors Dassault Aviation and MBDA initially proposed (September 2015) to discharge 30 per cent of their offset obligation by offering high technology to DRDO. But they have not confirmed the technology transfer till date," it observed.
 
DRDO wanted to obtain Technical Assistance for the indigenous development of engine (Kaveri) for the Light Combat Aircraft Tejas. Till date the Vendor has not confirmed the transfer of this technology, it said.
 
As per the deal, the company has to invest 50 per cent of the worth of the deal back in India as offset obligations. The French manufacturers have to invest around Rs 30,000 crore for which a numbers of Indian firms, including Anil Ambani's Reliance Defence Limited were chosen.Selection of Reliance Defence evoked controversies since the company had no experience in the defence sector.
 
The auditor added that in view of the fact that the offset policy has not yielded the desired results, the ministry needs to review the policy and its implementation. It needs to identify the constraints faced and find solutions to overcome these constraints, the CAG added.

CAG report  opening of can of worms: Chidambaram
 
New Delhi:Attacking the BJP-led NDA government on the latest CAG report that said that Dassault Aviation has failed to meet the offset clause under the deal for Rafale fighter aircraft,  the Congress wondered whether the CAG report marks the opening of a can of worms. 
 
In a series of tweets,  senior Congress leader and former Finance Minister P Chidambaram said, ''The offset obligations should have started on 23-9-2019 and the first annual commitment should have been completed by 23-9?2020, that is yesterday. Will the government say if that obligation was fulfilled? Is the CAG report the opening of a can of worms?''
 
He said that in its report, the CAG has found that  the vendors of the Rafale aircraft have not confirmed the transfer of technology under the offset contract.
 
Reacting to the observation of the CAG report,  AICC media in-charge Randeep Surjewala said, ''Chronology of biggest Defense deal continues to unfold. The new CAG report admits that 'technology transfer' shelved in #Rafale offsets. 1st, 'Make in India' became 'Make in France'. Now, DRDO dumped for tech transfer. Modi ji will say-?? ???? ?? !''.
 
In its report titled "CAG's Performance Audit Report on Management of Defence Offset", the CAG has said that foreign vendors in Rafale deal failed to fulfill offset commitments in defence sector.
 
The CAG pointed out that the French fighter jet manufacturer and MBDA which supplied armaments for Rafale jets have not yet discharged 30 per cent of their offset obligation.
 
India has already received five Rafale fighter jets from the French manufacturer in the first batch of the delivery on July 29. They were formally inducted to Indian Air Force (IAF) on September 10.  
 
"In many cases, it was found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments," the financial watchdog said in its report.
 
The Rafale deal is worth Rs 59,000 crore and the opposition Congress party has criticised the BJP government for what it alleged were irregularities in the fighter jet deal.(UNI)