Anil Ambani’s defamation blitz: 28 cases filed by Reliance Group in Ahmedabad courts this year

[1ndy]

No doubt Rafale is a great fighter plane excluding the stealth ones in the market.



It is relative. One big draw back for India is that PAF knows F-16 like the back of their hand. So it will always be least preferred.



Unfortunately it has only been a desire with little progress on ground.



Unfortunately India needs to keep the big powers happy.



Partially true. Reliance did acquire Pipavav Defence but it was in the ship building domain and not in Aerospace.

The point was never what India Industry was already doing as everyone knew all Indian defense talent was in DPSUs which were rotting with inefficiencies. The plan was always to bring in private industry and help them grow through offset and ToT deals.

So if Reliance manufactured a defense pin or not is irrelevant.

so who is better? who can learn faster or those who don't even have knowledge to menufacture safety pins? don't you think reliance will take another half century to reach where tatas are today?

 

[Shankranthi]

The point being Modi has given 36 additional fighters to be bought in fly away condition with no commitment on ToT.

Those 36 were emergency purchased based on time critical requirement projected by the IAF.

The offset for the same is 50% and as per statement made in parliament by junior defence minister Subhash Bhamre, “The quantum of offsets in the Inter-Governmental Agreement (IGA) for 36 Rafale fighter jets is 50 per cent, which includes investments in terms of Transfer of Technology (ToT) for manufacture and maintenance of eligible products and services. "

In the original deal HAL was mandated to be the partner. I am happy that the original deal was cancelled. This was the only right step taken by Modi.

It makes no difference if the vendor is HAL or Reliance. Both of them are Indian companies.

Again you are confused. The purpose of offsets is not to get ToT. Getting any ToT as part of offset obligations from the vendor is purely coincidental and should be considered as a bonus. The primary purpose is to bring in investments which offsets the money going out as partTof the procurement (meaning saving precious Foreign Exchange) apart from building the Industry and generating jobs. MoD has very little say in case of Offsets other than ensuring that the offsets are in the eligible sectors or not. In most cases India may already have such technologies or the technology may fall into commodity (non critical) category. It is the ToT where MoD can clear specify and mandate what should be part of the deal.

Nope, ToT part of the offset is part of the Contract Negotiations.

For e.g. as per current offset requirement from DA, Safran is required to help GTRE operationalize Kaveri Engine. Similarly Thales is to work with DRDO to transfer SPECTRA EW etc.

That is why DRDO is always part of the Contracts negotiations committee.

That was your claim, was it not ?

 

[SuvarnaTeja]

That was then; this is now.

Nothing has changed. It was only a tactical (not strategic) move to lessen the impact from Radia tapes and later the Cyrus Mistry issue.

Bullshit.

The Swatantra Party was the Parsi party. The Congress grew out of its Parsi legacy with Gokhale. Tatas got no favours; I've worked with Tatas twice and saw the internal workings and the uphill battles compared to the ease with which the Marwaris, particularly the Birlas, moved around, and still worse compared to the subversion and corruption of everything and anything that was Dhirubhai's hallmark.

Nonsense. Congress is an out and out Parsi party. Parsi Industrial houses like Tatas and Godrejs have received largesse through Indian license raj for many decades. Indira married a Parsi.

Feroze Gandhi (born Feroze Jehangir Ghandy;[3] 12 September 1912 – 8 September 1960) was an Indian politician and journalist. He served as the publisher of The National Herald and The Navjivan newspapers from Lucknow. In 1942 he married Indira Nehru and they had two sons, Rajiv and Sanjay. His elder son, Rajiv, later also went on to become the Prime Minister of India.[4]

Feroze Gandhi became a member of the provincial parliament (1950–1952), and later a member of the Lok Sabha, the Lower House of India's parliament.

Early life
Born as Feroze Jehangir Ghandy[3] to a Parsi family at the Tehmulji Nariman Hospital situated in Fort, Bombay, his parents, Faredoon Jehangir Ghandy and Ratimai (formerly Ratimai Commissariat), lived in Nauroji Natakwala Bhawan in Khetwadi Mohalla in Bombay.[5] His father Jehangir was a marine engineer in Killick Nixon and was later promoted as a warrant engineer.[6] Feroze was the youngest of the five children with two brothers Dorab and Faridun Jehangir,[7][8] and two sisters, Tehmina Kershashp and Aloo Dastur. The family had migrated to Bombay from Bharuch in South Gujarat where their ancestral home, which belonged to his grandfather, still exists in Kotpariwad.[9]

In the early 1920s, after the death of his father, Feroze and his mother moved to Allahabad to live with his unmarried maternal aunt, Shirin Commissariat, a surgeon at the city's Lady Dufferin Hospital (biographer Katherine Frank has speculated that Feroze was in fact the biological son of Shirin Commissariat.[10]) He attended the Vidya Mandir High School and then graduated from the British-staffed Ewing Christian College.[1

https://en.wikipedia.org/wiki/Feroze_Gandhi

So admiring a woman's dress sense clearly indicates my prurient desires? I mentioned Tata's extensive experience in defence, and you made a full suite of sail out of that hankie. No, I don't want Tata to become a monopoly in Indian defence. At the same time that I was watching Tatas smoothly move into various areas of 'our' interest, another very low-profile organisation had employed India's 'other' astronaut, the man who never flew out, to make very specialised aerial devices. In these twenty years since then (I said fifteen years somewhere else, but realised time had slipped by faster than I thought), they have widened and deepened their capabilities. Now I read about the startling new acquisitions by our neighbours with considerable amusement, knowing what is going on quietly, without fuss or bother.

I am not questioning Tatas capabilities but they have it because the had the political support and head start. Now it is time to bring in other private players to bring in competition.

You talk so knowledgeably about these 'plans' and about what is being decided at a policy level. Very, very impressive.

As it happens, Mahindras was already available, and although the direction they took was very close to their knitting, and far less diversified than Tatas, there was never any question of a private-sector monopoly for one house. Besides the Tatas and the Mahindras, there were that 'M' organisation I mentioned a little earlier, and people from Pune were already talking to us about their metallurgical capabilities. I was only peripherally interested or involved in that last, as artillery was never a part of our remit, but by public reports, they have done extremely well and come to a respectable position.

Yes. I talk about this confidently as I have more than 50 years experience in this field.

Bullshit.

I've dealt with offsets; I've been involved in negotiations for critical items. You don't know what you are talking about.

Yeah? Explain why both LM and Boeing are working with same Tatas in India.

so who is better? who can learn faster or those who don't even have knowledge to menufacture safety pins? don't you think reliance will take another half century to reach where tatas are today?

If you look at who is better we would be stuck with HAL only. HAL is much bigger than Tatas too.

The point is to bring in private players and help them grow so that in the next 2-3 decades India would have large Aerospace companies competing with each other. Let's not be penny wise pound foolish here.

Those 36 were emergency purchased based on time critical requirement projected by the IAF.

The offset for the same is 50% and as per statement made in parliament by junior defence minister Subhash Bhamre, “The quantum of offsets in the Inter-Governmental Agreement (IGA) for 36 Rafale fighter jets is 50 per cent, which includes investments in terms of Transfer of Technology (ToT) for manufacture and maintenance of eligible products and services. "

The highlighted text is standard verbiage of the offset clause. It need not be high tech ToT.

Nope, ToT part of the offset is part of the Contract Negotiations.

For e.g. as per current offset requirement from DA, Safran is required to help GTRE operationalize Kaveri Engine. Similarly Thales is to work with DRDO to transfer SPECTRA EW etc.

That is why DRDO is always part of the Contracts negotiations committee.

Jury is still out on this. Let's see if Safran will deliver on the promises made on Kaveri. If they do then everything else could be overlooked.

 

[Shankranthi]

The highlighted text is standard verbiage of the offset clause. It need not be high tech ToT.

That would depend on the Supplier.

High tech ToT gets him a higher weighted rank, low tech ToT gets him a lower rank which is multiplied to the value of the offset to reach a higher figure.

We negotiate critical ToT as part of the contract, rest is left to the discretion of the Vendor.

Jury is still out on this. Let's see if Safran will deliver on the promises made on Kaveri. If they do then everything else could be overlooked.

That doesn't seems to be the case since you have already passed judgement and declared Modi guilty without befit of any doubt.

In any case even if Safran does not deliver on their promise, they will not get any offset points and will have to deliver elsewhere.

 

[Joe Shearer]

Nothing has changed. It was only a tactical (not strategic) move to lessen the impact from Radia tapes and later the Cyrus Mistry issue.




Nonsense. Congress is an out and out Parsi party. Parsi Industrial houses like Tatas and Godrejs have received largesse through Indian license raj for many decades. Indira married a Parsi.

Feroze Gandhi (born Feroze Jehangir Ghandy;[3] 12 September 1912 – 8 September 1960) was an Indian politician and journalist. He served as the publisher of The National Herald and The Navjivan newspapers from Lucknow. In 1942 he married Indira Nehru and they had two sons, Rajiv and Sanjay. His elder son, Rajiv, later also went on to become the Prime Minister of India.[4]

Feroze Gandhi became a member of the provincial parliament (1950–1952), and later a member of the Lok Sabha, the Lower House of India's parliament.

Early life
Born as Feroze Jehangir Ghandy[3] to a Parsi family at the Tehmulji Nariman Hospital situated in Fort, Bombay, his parents, Faredoon Jehangir Ghandy and Ratimai (formerly Ratimai Commissariat), lived in Nauroji Natakwala Bhawan in Khetwadi Mohalla in Bombay.[5] His father Jehangir was a marine engineer in Killick Nixon and was later promoted as a warrant engineer.[6] Feroze was the youngest of the five children with two brothers Dorab and Faridun Jehangir,[7][8] and two sisters, Tehmina Kershashp and Aloo Dastur. The family had migrated to Bombay from Bharuch in South Gujarat where their ancestral home, which belonged to his grandfather, still exists in Kotpariwad.[9]

In the early 1920s, after the death of his father, Feroze and his mother moved to Allahabad to live with his unmarried maternal aunt, Shirin Commissariat, a surgeon at the city's Lady Dufferin Hospital (biographer Katherine Frank has speculated that Feroze was in fact the biological son of Shirin Commissariat.[10]) He attended the Vidya Mandir High School and then graduated from the British-staffed Ewing Christian College.[1

https://en.wikipedia.org/wiki/Feroze_Gandhi

And THAT is the extent of the Tatas control by the Parsis?

I am not questioning Tatas capabilities but they have it because the had the political support and head start. Now it is time to bring in other private players to bring in competition.

What political support? They hired people, ran projects with NO return, hunted for technology that they could use in India, and moved along inch by inch. Only a handful of others did that, and they all got established.

Yes. I talk about this confidently as I have more than 50 years experience in this field.

Not much to show for it.

Yeah? Explain why both LM and Boeing are working with same Tatas in India.

What is your point?

When the Hungarians bought the Gripen, there was almost nothing to absorb the 35% offset clause. The sorts of contortions the Swedes had to go through to get their offsets executed was a sight to behold. The same thing happened here, in India. There was nobody in the 90s and the early years of the 21st century in India either; Boeing had a lot to execute, couldn't get it done by the GoI designated organisation, and finally reached out to Tatas in desperation.

If you have 50 years' experience in the field, you can name the organisations and the components involved.

Boeing worked with others as well, and continue to do so. So what? Lockheed Martin are recent entrants. They were not even there twenty years ago.

If you look at who is better we would be stuck with HAL only. HAL is much bigger than Tatas too.

And did HAL execute anything under offset? Yes or no? For all their size, what was their capability, in real-world terms?

The point is to bring in private players and help them grow so that in the next 2-3 decades India would have large Aerospace companies competing with each other. Let's not be penny wise pound foolish here.

Are you aware of the practical monopoly that a private sector organisation built up in a sophisticated area of aviation technology, at the cost of HAL and its subsidiary? Do you know who were building unmanned aerial vehicles twenty years ago? Do you know the kind of naval propulsion technology that was being developed in Bangalore by the private sector and who the private sector organisation was?

Private players were in, twenty years ago.

I don't know what you are seeing, when you say that private players had to be brought in, and helped to grow. People have been involved in defence for decades, and they have good reputations by now. Bringing in the Ambanis was so contrived, so phony that even an amateur can spot a blatant crony capitalist being fostered.

 

[SuvarnaTeja]

SUDHANSU MOHANTY | 2 DECEMBER, 2018

Rafale Deal: More Questions that Beg for Answers

IAF issued a request for information for 110 more fighters in April 2018

The welter of information on the Rafale deal already available in the public domain – including very pertinent points by several defence and political commentators – still leaves relevant and important aspects unanswered or unexplained. We need to analyse these issues in an objective and dispassionate manner.

Categorisation

There is the issue of categorisation. Day One of the present procurement is April 10, 2015 when PM Modi announced in Paris, in a joint statement with French President Hollande, that 36 aircraft would be purchased. How was this magic number of 36 arrived at?

Since the defence minister was not in the know, it can safely be inferred that the Ministry of Defence (MoD) was not consulted either. And the Indian Air Force obviously couldn’t have agreed to this number, down from 126 aircraft.

This is obvious because the Request for Proposal or RFP of 2007 was still alive. It hadn’t been withdrawn or cancelled yet. Agreeing to another proposal from the same company, for the same item, would subvert the spirit of the MoD’s very own Defence Procurement Policy in effect since 2013.

Aside from the moral issue raised by two concurrent procurement proposals, the processes laid down in DPP 2013 for obtaining the Acceptance of Necessity for an RFP were not followed.

The new RFP – in sharp contrast to the RFP 2007 for Global “Buy and Make” – was merely a Global “Buy”. It is hard to understand how the SCAPCHC (Services Capital Acquisition Plan Categorisation Higher Committee) could have approved the new RFP, and importantly, recommended only the Global “Buy” – and not Global “Buy and Make” – as in the RFP 2007.

Further, how could the SCAPHC accept the reduced number of aircraft, 36 vis-à-vis the earlier RFP for 126 aircraft which it had accepted?

There is also the question of why the government junked the earlier proposal when it had reached a near finality.

Another Contract in the Works?

Another niggling question remains: how does the IAF’s recent Request for Information (of April 6, 2018) for 110 fighter aircraft jell with this decision?

Let me explain the disquiet.

Para 48 of DPP 2013 says that:

“It would be desirable to negotiate the licence production contract along with the contract for the finished product. In cases where this is not feasible, the purchase contract should include a clause wherein the vendor agrees to negotiate the licence contract at a subsequent date, thus obtaining a commitment from the vendor to part with the ToT [transfer of technology]. In cases where ToT for Maintenance Infrastructure is being sought, the maintenance contract involving the OEM [original equipment manufacturer] and the industry receiving the technology would also be negotiated along with the main contract.”

So, was a transfer of technology included in RFP 2015, as it was in RFP 2007? If it wasn’t, what were the reasons?

If ToT was not recommended by the SCAPCHC, and was not negotiated in RFP 2015 because it wasn’t feasible to negotiate the ToT at the time, did the new RFP, as per Para 48 and Para 30 of DPP 2013 which cater for such contingencies, “clearly indicate that Government reserves the right to negotiate ToT terms subsequently and that the availability of ToT would be a pre-condition for any further procurements”, and that the “terms and conditions of obtaining ToT would be included in subsequent RFP”?

If it did not, how will this impact the fresh RFP that will likely come up for 110 fighter aircraft, as can be inferred from the RFI issued in April 2018?

Benchmarking

Another troubling issue is of benchmarking, where Para 52 of DPP 2013 is relevant. It says:

“Cases for which contracts have earlier been signed and benchmark prices are available, the CNC [contract negotiation committee] would arrive at the reasonable price, taking into consideration the escalation/ foreign exchange variation factor.” (emphasis supplied)

Since there were no contracts on the item signed earlier and hence no benchmark price was available, going by media information one wonders how the benchmark price was revised upwardly, by use of an “aligned cost table”.

Para 47 of DPP 2013 stipulates that “the CNC would carry out all processes from opening of commercial bids till conclusion of contract”.

Many people have asked me if in such a logjam of disparate views the majority views should hold. I have demurred at the suggestion and responded in a copybook way, that anyone familiar with the DPP would profess that the CNC decisions are carried out in a collegiate manner/ vetting/ discussions and on logic/ merit of issues to protect government interest, and nothing else matters.

If there were differences of opinion on benchmarking among members of the CNC, with three crucial members – Joint Secretary & Acquisition Manager, Finance Manager, and Advisor (Cost) – who had the relevant domain expertise on benchmarking, plumping for €5.2 billion while others sought enhancement to €8.2 billion based on an “aligned cost table”, the details doubtless merit scrutiny.

Several defence commentators have opined that if the case of the 36 Rafale jet purchase had followed the original benchmarking cost of €5.2 billion based on the price benchmarked for 18 fly-away aircraft in RFP 2007, there wouldn’t have been much brouhaha.

It appears that it was this conundrum of upward revision, by taking the price of 126 Rafale aircraft (18 flyaways and 108 manufactured in India) that makes it far from credible.

The manufacturing of 108 aircraft which were proposed to be made in India included the ToT and licence production cost, plus the cost of setting up the facility in India. This expenditure was to be amortised over the entire spectrum of 108 aircraft to be produced. Thereafter even the depreciated value of the facility upon closure of this production line would have a residual value.

Amortisation in its classical sense is applied to intangible assets. When funds need to be invested for setting up a particular facility that is quantity-neutral, it is natural that the greater the number the better it is for the investor.

With the cost of such investment deemed as inexorable because it is the irreducible minima, the higher the number, the lesser is the cost per unit, since the investment spreads across a wider spectrum, thereby whittling down the individual price.

So, apportioning this expenditure over 36 units isn’t the best way to arrive at the reasonable price to benchmark. It’s much too simplistic a calculation – and it doesn’t work that way!

Passing the Parcel

Going by media reports, the Defence Acquisition Council/ MoD did not recommend the case as authorised by the Allocation and Business Rules of the Government of India, and instead referred it to the Cabinet Committee on Security (CCS) for taking a decision that falls within its power (which it has exercised in other cases).

But for the Ministry of Finance to have agreed to refer it to the CCS for decision-making is truly a puzzle. This is because the CAG in its audit report on the AgustaWestland case – the Report of the Comptroller and Auditor General of India on Acquisition of Helicopters for VVIPs; Union Government Defence Services (Air Force) No. 10 of 2013, tabled before Parliament on August 13, 2013 – had observed that:

“the MoF should have either recommended, not recommended or recommended with conditions the proposal as MoF provides financial advice to CCS and Government” (emphasis supplied). Para 10 of the audit report states, “On 20 July 2009, MoF stated that they were unable to support the proposal in light of certain concerns raised by MoF, which were to be addressed in the final Note to CCS.”

The Cost of Comfort

Further, how could the finance ministry have agreed to a proposal involving advance and stage payments of huge sums without a Bank Guarantee or Sovereign Guarantee, which would have meant a lower quoted amount, since BG comes with a cost that banks charge, and long-term BG coverage can tot up to a tidy sum? This violates the defence ministry’s DPP and the finance ministry’s General Financial Rules’ prescriptions to protect public funds.

Or was it done on the presumption that the Inter-Governmental Agreement would be twined with a Sovereign Guarantee? Was the Letter of Comfort also made part of such conditional concurrence of the proposal?

What then was the difference in price between the IGA-Sovereign Guarantee backed RFP and the one backed by BG?

Sadly, no details are forthcoming.

Maybe we will have to wait for the CAG’s audit report to learn the truth.

(Sudhanshu Mohanty is a former Controller General of Defence Accounts and also a former Financial Adviser (Defence Services) in the Ministry of Defence who retired on May 31, 2016. He is the author of several books including Babudom: Catacombs of Indian Bureaucracy and Anatomy of a Tumour: A Patient's Intimate Dialogue with the Scourge (Hay House).


https://www.thecitizen.in/index.php...fale-Deal-More-Questions-that-Beg-for-Answers

 

[JohnWick]

SUDHANSU MOHANTY | 2 DECEMBER, 2018

Rafale Deal: More Questions that Beg for Answers

IAF issued a request for information for 110 more fighters in April 2018

The welter of information on the Rafale deal already available in the public domain – including very pertinent points by several defence and political commentators – still leaves relevant and important aspects unanswered or unexplained. We need to analyse these issues in an objective and dispassionate manner.

Categorisation

There is the issue of categorisation. Day One of the present procurement is April 10, 2015 when PM Modi announced in Paris, in a joint statement with French President Hollande, that 36 aircraft would be purchased. How was this magic number of 36 arrived at?

Since the defence minister was not in the know, it can safely be inferred that the Ministry of Defence (MoD) was not consulted either. And the Indian Air Force obviously couldn’t have agreed to this number, down from 126 aircraft.

This is obvious because the Request for Proposal or RFP of 2007 was still alive. It hadn’t been withdrawn or cancelled yet. Agreeing to another proposal from the same company, for the same item, would subvert the spirit of the MoD’s very own Defence Procurement Policy in effect since 2013.

Aside from the moral issue raised by two concurrent procurement proposals, the processes laid down in DPP 2013 for obtaining the Acceptance of Necessity for an RFP were not followed.

The new RFP – in sharp contrast to the RFP 2007 for Global “Buy and Make” – was merely a Global “Buy”. It is hard to understand how the SCAPCHC (Services Capital Acquisition Plan Categorisation Higher Committee) could have approved the new RFP, and importantly, recommended only the Global “Buy” – and not Global “Buy and Make” – as in the RFP 2007.

Further, how could the SCAPHC accept the reduced number of aircraft, 36 vis-à-vis the earlier RFP for 126 aircraft which it had accepted?

There is also the question of why the government junked the earlier proposal when it had reached a near finality.

Another Contract in the Works?

Another niggling question remains: how does the IAF’s recent Request for Information (of April 6, 2018) for 110 fighter aircraft jell with this decision?

Let me explain the disquiet.

Para 48 of DPP 2013 says that:

“It would be desirable to negotiate the licence production contract along with the contract for the finished product. In cases where this is not feasible, the purchase contract should include a clause wherein the vendor agrees to negotiate the licence contract at a subsequent date, thus obtaining a commitment from the vendor to part with the ToT [transfer of technology]. In cases where ToT for Maintenance Infrastructure is being sought, the maintenance contract involving the OEM [original equipment manufacturer] and the industry receiving the technology would also be negotiated along with the main contract.”

So, was a transfer of technology included in RFP 2015, as it was in RFP 2007? If it wasn’t, what were the reasons?

If ToT was not recommended by the SCAPCHC, and was not negotiated in RFP 2015 because it wasn’t feasible to negotiate the ToT at the time, did the new RFP, as per Para 48 and Para 30 of DPP 2013 which cater for such contingencies, “clearly indicate that Government reserves the right to negotiate ToT terms subsequently and that the availability of ToT would be a pre-condition for any further procurements”, and that the “terms and conditions of obtaining ToT would be included in subsequent RFP”?

If it did not, how will this impact the fresh RFP that will likely come up for 110 fighter aircraft, as can be inferred from the RFI issued in April 2018?

Benchmarking

Another troubling issue is of benchmarking, where Para 52 of DPP 2013 is relevant. It says:

“Cases for which contracts have earlier been signed and benchmark prices are available, the CNC [contract negotiation committee] would arrive at the reasonable price, taking into consideration the escalation/ foreign exchange variation factor.” (emphasis supplied)

Since there were no contracts on the item signed earlier and hence no benchmark price was available, going by media information one wonders how the benchmark price was revised upwardly, by use of an “aligned cost table”.

Para 47 of DPP 2013 stipulates that “the CNC would carry out all processes from opening of commercial bids till conclusion of contract”.

Many people have asked me if in such a logjam of disparate views the majority views should hold. I have demurred at the suggestion and responded in a copybook way, that anyone familiar with the DPP would profess that the CNC decisions are carried out in a collegiate manner/ vetting/ discussions and on logic/ merit of issues to protect government interest, and nothing else matters.

If there were differences of opinion on benchmarking among members of the CNC, with three crucial members – Joint Secretary & Acquisition Manager, Finance Manager, and Advisor (Cost) – who had the relevant domain expertise on benchmarking, plumping for €5.2 billion while others sought enhancement to €8.2 billion based on an “aligned cost table”, the details doubtless merit scrutiny.

Several defence commentators have opined that if the case of the 36 Rafale jet purchase had followed the original benchmarking cost of €5.2 billion based on the price benchmarked for 18 fly-away aircraft in RFP 2007, there wouldn’t have been much brouhaha.

It appears that it was this conundrum of upward revision, by taking the price of 126 Rafale aircraft (18 flyaways and 108 manufactured in India) that makes it far from credible.

The manufacturing of 108 aircraft which were proposed to be made in India included the ToT and licence production cost, plus the cost of setting up the facility in India. This expenditure was to be amortised over the entire spectrum of 108 aircraft to be produced. Thereafter even the depreciated value of the facility upon closure of this production line would have a residual value.

Amortisation in its classical sense is applied to intangible assets. When funds need to be invested for setting up a particular facility that is quantity-neutral, it is natural that the greater the number the better it is for the investor.

With the cost of such investment deemed as inexorable because it is the irreducible minima, the higher the number, the lesser is the cost per unit, since the investment spreads across a wider spectrum, thereby whittling down the individual price.

So, apportioning this expenditure over 36 units isn’t the best way to arrive at the reasonable price to benchmark. It’s much too simplistic a calculation – and it doesn’t work that way!

Passing the Parcel

Going by media reports, the Defence Acquisition Council/ MoD did not recommend the case as authorised by the Allocation and Business Rules of the Government of India, and instead referred it to the Cabinet Committee on Security (CCS) for taking a decision that falls within its power (which it has exercised in other cases).

But for the Ministry of Finance to have agreed to refer it to the CCS for decision-making is truly a puzzle. This is because the CAG in its audit report on the AgustaWestland case – the Report of the Comptroller and Auditor General of India on Acquisition of Helicopters for VVIPs; Union Government Defence Services (Air Force) No. 10 of 2013, tabled before Parliament on August 13, 2013 – had observed that:

“the MoF should have either recommended, not recommended or recommended with conditions the proposal as MoF provides financial advice to CCS and Government” (emphasis supplied). Para 10 of the audit report states, “On 20 July 2009, MoF stated that they were unable to support the proposal in light of certain concerns raised by MoF, which were to be addressed in the final Note to CCS.”

The Cost of Comfort

Further, how could the finance ministry have agreed to a proposal involving advance and stage payments of huge sums without a Bank Guarantee or Sovereign Guarantee, which would have meant a lower quoted amount, since BG comes with a cost that banks charge, and long-term BG coverage can tot up to a tidy sum? This violates the defence ministry’s DPP and the finance ministry’s General Financial Rules’ prescriptions to protect public funds.

Or was it done on the presumption that the Inter-Governmental Agreement would be twined with a Sovereign Guarantee? Was the Letter of Comfort also made part of such conditional concurrence of the proposal?

What then was the difference in price between the IGA-Sovereign Guarantee backed RFP and the one backed by BG?

Sadly, no details are forthcoming.

Maybe we will have to wait for the CAG’s audit report to learn the truth.

(Sudhanshu Mohanty is a former Controller General of Defence Accounts and also a former Financial Adviser (Defence Services) in the Ministry of Defence who retired on May 31, 2016. He is the author of several books including Babudom: Catacombs of Indian Bureaucracy and Anatomy of a Tumour: A Patient's Intimate Dialogue with the Scourge (Hay House).


https://www.thecitizen.in/index.php...fale-Deal-More-Questions-that-Beg-for-Answers

Therefore there will be
110+36=146~150 rafales?????
These 110 are also including navy version???
you have not abandoned your tejas programme yet
So why need of 100+
Rafales...

 

[SuvarnaTeja]

Therefore there will be
110+36=146~150 rafales?????
These 110 are also including navy version???
you have not abandoned your tejas programme yet
So why need of 100+
Rafales...

The 57 jet deal for Navy is a separate one.

 

[JohnWick]

The 57 jet deal for Navy is a separate one.

Yes 210 wow.
Ap ko ghr ma koi Looori nahi deta ya raat ko story nahi sunata k ap soo jaein


???????

And also good night have sweet dreams....

 

[SuvarnaTeja]

Yes 210 wow.
Ap ko ghr ma koi Looori nahi deta ya raat ko story nahi sunata k ap soo jaein


???????

Its just midnight now. Won't get sleep for another couple of hours.

 

[JohnWick]

Its just midnight now. Won't get sleep for another couple of hours.

Sorry I was slept....but When did you caught this Insomnia???.....