COURSE TITLE

PROJECT PROCUREMENT AND CONTRACT

MANAGEMENT

MUHAMMAD BILAL KHALID

 CASE
RAFALE JET
SCANDAL
 GROUP MEMBERS

1. SHAMS UL ZAMAN -014

2. SHARJEEL HUMAYUM HASSAN -015
3. TALHA SHAMIM -025
4. M. TAHIR KHAN -035
 INTRODUCTION

• In backdrop to enhance air fighting capability, India aims to acquire French

origin Rafale Jet Fighter Aircrafts
• In 2012, Dessault Aviation company of France was selected as Low Bidder to
deliver 126 multi role combat aircrafts to Indian Airforce (IAF)
• 63 x additional aircrafts were also made part of the agreement
• First fully built 18 aircrafts were to be delivered to IAF
• The later, 108 will be manufactured at iIdia in collaboration with France
 SIGNIFICANT POINTS OF AGREEMENT
• Indian Government (IG) highlighted that life cycle cost of the aircrafts are the significant points for
selection of lowest bid, which majorly includes following:

• Cost Of Acquisition
• Operating Cost Over 40 Yrs
• Cost Incurred In Transfer Of Technology
• During negotiations with dessault, conflict raised with IG on following two points:

• Warranty Requirement of the IAF

• Manufacturing of Jet Aircrafts Based on the IAF Design Technical Specifications

• Dessualt refused to do continue with the agreement

 AFTER EFFECTS OF DISAGREEMENT

• Due to this dis agreement, French proposed alternate solution for SUKHOI SU-30MKI
• However, IG refused to accept the proposal.
• During this controversy, the escalation cost was also increased from 15 Billion $ to 30 Billion $
• THEREFORE, the agreement was held up
 RENEWAL OF AGREEMENT

• In July 2015, Moodi was again became PM of India. the government renewed the
agreement.
• As per new agreement, 36 Jet Fighter Aircrafts were contracted with Dessault under
joint venture with Reliance Defence of India
• In this joint venture, 49% will be reliance Defence profit and 51 % will be Dessualt profit
• Cost of 36 Aircrafts was finalized nearly to 8.1 Billion $
 ALLEGATIONS ABOUT CONTRACT

• IN NOVEMBER 2017, THE CONGRESS ALLEGED THE GOVERNMENT WAS NOT BEING
TRANSPARENT ABOUT THE PRICE OF THE DEAL.
• THE PARTY ALLEGED THAT THE BJP GOVERNMENT WAS PAYING THRICE THE AMOUNT
FOR EACH AIRCRAFT THAN WHAT THE CONGRESS GOV’T HAD AGREED UPON
• THE CONGRESS HAS ALSO ALLEGED THAT THE ANIL AMBANI-LED RELIANCE DEFENCE
LIMITED HAD BEEN UNFAIRLY CHOSEN AS THE INDIAN PARTNER UNDER THE OFFSET
CLAUSE, CLAIMING THAT THIS WAS DONE TO ‘FAVOUR’ ANIL AMBANI’S COMPANY
SINCE THE PRIVATE FIRM HAS NO PRIOR EXPERIENCE IN AEROSPACE MANUFACTURING.
• CONGRESS PRESIDENT RAHUL GANDHI DEMANDED THAT THE GOVERNMENT PUT ON
PUBLIC RECORD THE DETAILS OF THE DEAL
 CONTRACTUAL SHORTFALLS

• PETITIONS HAVE BEEN FILED IN THE SUPREME COURT DEMANDING A CBI INQUIRY INTO
THE DEAL.
• THE DEFENCE MINISTRY PUT OUT A STATEMENT THAT DASSAULT HAD THE FREEDOM TO
CHOOSE THE INDIAN COMPANY AND NEITHER THE INDIAN GOVERNMENT NOR THE
FRENCH GOVERNMENT INFLUENCED THAT DECISION.
• THE GOVERNMENT HAS MAINTAINED THAT THE DEAL MADE IS COMPLETELY
TRANSPARENT BUT IT WAS NOT POSSIBLE TO PUT ON RECORD THE DETAILS OF THE DEAL
SINCE THIS INFORMATION WAS TERMED AS CLASSIFIED UNDER THE INTER-
GOVERNMENTAL AGREEMENT BETWEEN FRANCE AND INDIA.
• ACCORDING TO OFFICIALS, THE AGREEMENT HAS A CONFIDENTIALITY CLAUSE IN THE
DEAL WHICH WAS ADDED DUE TO NATIONAL SECURITY CONCERN
 END TO CONTROVERSY

• THE SUPREME COURT ASKED THE GOVERNMENT TO DISCLOSE BEFORE IT THE PRICING OF THE RAFALE
DEAL.
• A BENCH OF CHIEF JUSTICE, WHILE HEARING A PETITION SEEKING A CBI INQUIRY INTO THE DEAL, STATED
THAT IT WOULD LIKE TO BE APPRISED OF THE DETAILS WITH REGARD TO THE PRICING OR COST,
PARTICULARLY, THE ADVANTAGE THEREOF.
• WHEN ATTORNEY GENERAL TOLD THE COURT THAT IT MIGHT NOT BE POSSIBLE TO DISCLOSE THE COST,
THE COURT ASKED THE CENTRE TO SUBMIT AN AFFIDAVIT EXPLAINING THE "DIFFICULTY" IN SHARING THE
INFORMATION ON PRICING.
• DECEMBER 14, 2018: SUPREME COURT DISMISSED PETITIONS SEEKING COURT-MONITORED PROBE INTO
RAFALE FIGHTER JET DEAL, SAYING THAT THERE WAS NO OCCASION TO DOUBT THE DECISION-MAKING
PROCESS IN THE DEAL.
• THE TOP COURT HAD ALSO SAID THAT IT WAS NOT ITS JOB TO GO INTO THE ISSUE OF PRICING OF FIGHTER
PLANES.
 CURRENT STATUS

• AFTER A PROLONGED DELAY, 01 X JET FIGHTER AIRCRAFT HAS BEEN DELIVERED

TO IAF BY DESSAULT AVIATION
THANKYOU