Highlights The SC narrated how the UPA’s deal for 126 Rafale jets got replaced in 2016 by an inter-government agreement to procure 36 fully-loaded jets
Centre told SC that HAL would require 2.7 times higher man-hours compared to French side to manufacture the jet
The stalemate resulted in the process of RFP to procure 36 jets The Supreme Court on Friday narrated how the UPA’s deal for 126 Rafale jets, of which 18 were to come in flyaway condition and Hindustan Aeronautics Ltd (HAL) was to manufacture the rest under licence, got replaced in 2016 by the NDA government — which went for 36 fully-loaded jets with Reliance Aerostructure Ltd as Indian offset partner.
The Defence Acquisition Council (DAC) on June 29, 2007, granted acceptance of necessity for procurement of 126 medium multirole combat aircraft (MMRCA), including 18 flyaway aircraft (equivalent to single squadron) to be procured from original equipment manufacturer with remaining 108 jets to be manufactured by HAL under licence, to be delivered over a period of 11 years from the date of signing the contract. Six vendors submitted proposals in April 2008 and and these were subjected to technical and field evaluation.
Commercial bids were opened in November 2011 and Dassault Aviation was declared the lowest bidder in January 2012. “Negotiations commenced thereafter and continued but without any final result. In the meantime, there was a change of political dispensation at the Centre sometime in the middle of 2014,” the SC said.
The Centre told the SC that HAL would require 2.7 times higher man-hours compared to the French side for the manufacture of Rafale aircraft and that issues over Dassault undertaking contractual obligations for 108 aircraft to be manufactured by HAL remained unresolved for three years.
“Such delay is said to have impacted the cost of acquisition, as the offer was with ‘in-built escalation’ and was influenced by euro-rupee exchange rate variations. The stalemate resulted in the process of RFP (request for procurement) withdrawal being initiated in March 2015,” the SC said.
On April 10, 2015, an Indo-French joint statement for acquisition of 36 Rafale jets in flyaway condition through an inter-governmental agreement was issued and the same was approved by the DAC. The RFP for 126 Rafale jets was finally withdrawn in June 2015. Negotiations were carried out and the process was completed after inter-ministerial consultations with the approval of the Cabinet Committee on Security.
The contract, along with aircraft package supply protocol, weapons package supply protocol, technical agreements and offset contracts was signed with respect to 36 Rafale jets on September 23, 2016.
These aircraft were scheduled to be delivered in a phased manner from Oct 2019.