INDIA
As the French foreign minister Laurent Fabius met Indian political leadership, including prime minister Narendra Modi, pressing for sealing the multi-billion Rafale combat aircraft deal, New Delhi has raised serious concerns over the cost escalation of the fighter jet deal. Struggling to pay the heavy cost of the deal, the ministry of defence (MoD) is considering an option of down-sizing the deal from 126 to 80 fighter jets.
According to officials, who are privy to the development, defence ministry has asked the French government to revise the price structure because the deal has gone much beyond the expected lines. And during course of negotiations with the Dassault, which manufactures Rafale jets, the defence ministry has been asking for price revision. Due to difference of opinion, the cost negotiation committee, which was set up in February 2012 to work out the modalities for the deal, has not been able reach conclusion and the committee is yet to submit its report to the ministry.
Officials claim that in 2007, when the tender was floated, the cost of the programme was $12 billion. When the lowest bidder was declared in January 2012, the cost of the deal shot up to $18 billion (Rs1.08 lakh crore). And now with inclusion of transfer of technology, life cycle cost and creating assembly line, the deal has virtually cross whopping $20 billion.
A top official told dna that if the government signs the deal in the next couple of months, it has to pay advance payment of at least $1.5-2 billion (Rs.9- 12,000 crore) to Dassault. And for the newly-elected BJP-led NDA government will have to compromise on other defence equipment, as major chunk of defence budget will go in for the advance payment. And it is also believed to understand that new government is also not comfortable with the life cycle cost method adopted by the previous UPA-II government and even a senior BJP leader and former finance minister Yashwant Sinha had objected to the life cycle criteria.
"Cost escalations and disagreements over production sharing with Hindustan Aeronautics Limited(HAL) has led to the delay in freezing the contract. French have been asked to re-look at the price factor,"said an officer.
IAF officials maintain even if the deal is signed by the end this year, first lot of Rafale aircraft will arrive India by 2017. And by the time, IAF has to phase out its MiG 21 squadrons.
The air force is seeking to replace its ageing MiG-21s with a modern fighter and MMRCA fits between India's hig-end Sukhoi-30MKIs and its low-end Tejas LCA lightweight fighter. The IAF has a sanctioned strength of 45 fighter jet squadrons. However, it only has 30 squadrons operational as old aircraft have been retired.
Eighteen of the 126 planes will be purchased directly from Dassault, while Hindustan Aeronautics Limited will manufacture the other 108 under a licence, at an upcoming facility in Bangalore.
'Dusre ki biwi ko cheen ke...': Arya Babbar roasts Arjun Kapoor for Singham Again villain role
'Abki baar...': AI imagines Donald Trump, Kamala Harris as Indian politicians, netizens react, WATCH
Amid bomb threats, ammunition cartridges found in Dubai-Delhi Air India flight
This Indian king, was first man to make history by marrying foreign woman during his trip to...
Mukesh Ambani's Jio once again TOPPED in global telecom industry, sets record in...
Bhai Dooj 2024: Date, shubh muhurat, significance, rituals and more
New ‘Satoshi Nakamoto’ emerges: Meet man who declares himself to be Bitcoin founder but fails to...
Watch: Former CSK star gets hit for 6 sixes in an over against England during Hong Kong Sixes
'Makes no sense': Ex-India star slams Rohit Sharma, Gautam Gambhir for absurd Sarfaraz Khan decision
World's richest man Elon Musk faces lawsuit from Ex-Twitter CEO Parag Agrawal for...
Security forces kill 2 terrorists, including a foreign national in Jammu and Kashmir
WWE Crown Jewel 2024: Full match card, timing, live streaming details - All you need to know
'Absurd and baseless': India dismisses Canadian minister's allegations against Amit Shah
IND vs NZ: Virat Kohli scripts history in Mumbai Test, becomes first player in world to...
This 51-year-old woman leaves husband to marry 30-year-old Indian security guard
Mukesh Ambani's best plan for Jio users, 200GB data, 90 days of unlimited calls at just Rs...
'Thanks for...': Abhishek Bachchan's viral statement amid divorce rumours with Aishwarya Rai
Jammu and Kashmir: 2 terrorists killed in encounter with security forces in Anantnag
21-Day Mars, Moon simulation in Ladakh
Prashant Kishor's fee for advising in one election will leave you shocked, it is Rs...
Dua Padukone Singh: Here's how Deepika Padukone, Ranveer Singh named their baby girl
Another BIG move by Mukesh Ambani, set to provide some help for debt-ridden Ghana as Reliance Jio...
J-K: Gun battle breaks out between security forces and terrorists in Srinagar's Khanyar
Noel Tata takes BIG decision at TCS after Ratan Tata's death, plans to hire...
'Will chop them up...': Mithun Chakraborty hits out at TMC’s Humayun Kabir at Kolkata rally
Delhi Air Pollution: Delhi-NCR AQI turns ‘very poor’ as city wakes up to toxic smog post-Diwali
Gautam Adani's next BIG step: Adani Power stops Bangladesh’s power supply due to...
Indian troops start patrolling Demchok sector in eastern Ladakh following India-China disengagement
Amy Jackson announces first pregnancy with husband Ed Westwick, flaunts baby bump in adorable pics
In THIS Indian village, families live with cobras, the reason is...
Hardik Pandya flaunts his special 'World Champion' ring after being retained by MI, video goes viral
Happy Govardhan Puja 2024: Top 50 WhatsApp wishes, messages, quotes for loved ones
Despite massive Diwali opening, is Singham Again paying the price for banking on huge star cast?
Shah Rukh Khan's heartfelt gesture towards jewellery store staff wins internet, watch
DNA TV Show: Public calls out celebrities’ hypocrisy on Diwali pollution
Fashion designer Rohit Bal dies at 63: Last year, he was on ventilator for heart ailments
BCCI scraps India's intra squad warm-up game ahead of Border-Gavaskar Trophy, reason revealed
Legendary fashion designer Rohit Bal dies at 63 after prolonged illness
Another terrorist attack in J-K, militants shoot two non-locals in Budgam
Meet Anish Sarkar, world's youngest FIDE-rated chess player at 3 years
Bigg Boss 18: These two wild cards to enter Salman Khan's show, get into heated argument on stage
Fact check: Did Abhishek Bahchan tie knot with Nimrat Kaur amid divorce rumours with Aishwarya Rai?
Govardhan Puja 2024: History, significance, Puja timings; why it is celebrated after Diwali?
Aishwarya Rai Bachchan Birthday: Kajol pens heartfelt wishes for actress, calls her…
Dhirubhai Ambani played matchmaker for Mukesh Ambani and Nita Ambani, he did...
Amid Diwali festivities, UPI sets new record in October with transactions over…
PM Modi's BIG attack on Congress: 'Making unreal promises is easy but...'
Singham Again box office collection day 1: Ajay Devgn film beats Kartik Aaryan-starrer, earns Rs...
'Always fun to...': Google CEO Sundar Pichai shares why Diwali is his 'favourite time of the year'
Why Rishabh Pant and Delhi Capitals parted ways ahead of IPL 2025 auction? Report makes huge claim
'Bhool Bhulaiyaa 3', 'Singham Again' banned in Saudi Arabia; know why