French manufacturers Dassault Aviation and MBDA have not fulfilled their commitment of transferring high-end technology to DRDO for the development of the indigenous Kaveri jet engine as part of the Rafale deal, the CAG said in its report on defence offsets.
IAF pilots boarding a Rafale fighter aircraft during its induction into IAF fleet at Ambala air base on September 10 (Photo Credits: PTI)
In less than two weeks after the Rafale Fighter jets were inducted into the Indian Air Force (IAF), the Comptroller and Auditor General (CAG) has pulled up its French manufacturers Dassault Aviation and MBDA.
The CAG has stated that Dassault Aviation and MBDA did not fulfill their offset obligations in the Rs 60,000 crore deal. This is because they failed to transfer high-end technology to the Defence Research and Development Organisation (DRDO) for building the indigenous Kaveri jet engine as committed by them in 2015.
In a press release issued for its report on defence offsets tabled in Parliament on Wednesday, CAG cited the example of Dassault and MBDA as foreign vendors who make various offset commitments to qualify for supply contracts but are not earnest in fulfilling their obligations.
“In many cases, it was found that the foreign vendors made various offset commitments to qualify for the main supply contract but later, were not earnest about fulfilling these commitments,” the statement said.
The CAG went on to add, “For instance, in the offset contract relating to 36 Medium Multi-Role Combat Aircraft (MMRCA), the vendors Dassault Aviation and MBDA initially proposed (September 2015) to discharge 30 per cent of their offset obligation by offering high technology to DRDO. DRDO wanted to obtain technical assistance for the indigenous development of engine (Kaveri) for the light-combat aircraft. To date, the vendor has not confirmed the transfer of this technology.”
The Rafale deal is India’s biggest-ever defence purchase and involves a clause stating that 50 per cent of the total amount of the deal is to be invested back in India in the form of offset obligations.
As part of this deal, the French firms Dassault Aviation and MBDA were supposed to guarantee offsets amounting to Rs 30,000 crore for which a large number of Indian companies were chosen.