The Ministry of Defence (MoD) on Friday termed The Hindus detailed story on steep price escalation in the deal for 36 Rafale fighter jets as factually inaccurate. It did not adduce any new arguments as all issues have been answered in detail by the government at various fora and by Defence Minister Nirmala Sitharaman in Parliament, it said.

In a statement, the MoD spokesperson said, The cost of the India Specific Enhancements (ISE) was on a fixed basis in the 2007 bid, which was negotiated down in the 2016 deal. However, to compare the cost of the Medium Multi-Role Combat Aircraft [MMRCA] contract which never materialized with the cost of the 36 aircraft procured in 2016 is fallacious. The author, while indicating the price of ISE as €1.4bn in 2007, has failed to include the in-built escalation factor that would have worked between 2007 and 2015.

Escalation factors

In an exhaustive story in The Hindu, N. Ram, Chairman of The HinduPublishing Group, detailed how there was a huge price escalation as a result of bypassing procedures, official objections and the non-recurring cost of the ISE spread on just 36 aircraft compared to the earlier 126 jets.