20% discount on Eurofighter by EADS had 'factual inaccuracies': MoD to CAG

The "unsolicited" proposal of 20 per cent discount by aerospace major EADS on the Eurofighter Typhoon jet, a competitor of Rafale manufacturer Dassault Aviation, had "factual inaccuracies", the Comptroller and Auditor General was informed by the Defence Ministry.

The rebate on the Eurofighter was proposed by its manufacturer in comparison to the 2007 UPA offer on the Rafale jets.

In July 2014, the European Aeronautic Defence and Space Company (EADS) had offered the discount and also proposed enhancing the transfer of technology process.

This was done when Dassault Aviation had reached a deadlock when the Cost Negotiating Committee realised that if Indian man hours are applied to the cost of production by Hindustan Aeronautics Limited quoted by it, the price of the aircraft would be substantially higher, according to the CAG report, which was tabled in Parliament on Wednesday.

EADS was one of the competitors along with Dassault's Rafale, Russia's MiG, Sweden's SAAB, the US' Lockheed Martin and Boeing, in the original Medium Multi Role Combat Aircraft (MMRCA) tender for 126 aircraft.

It said EADS offered to enhance the transfer of technology process through a comprehensive training and support programme to be combined with the creation of an Eurofighter Typhoon Industrial Park in India.

"The ministry did not accept this offer stating that it was an unsolicited offer. Further, with the procurement of only 36 aircraft through an IGA (intergovernmental agreement), audit also could not find any proposal with the ministry for filling of this wide gap in the operational preparedness of the IAF (Indian Air Force).

"The ministry in response stated that M/s EADS unsolicited offer of 20 per cent discount had factual inaccuracies," the report said.

The Defence Ministry also stated that the 36 Rafale IGA procurement had been undertaken with the lowest bidder of the MMRCA case in consonance with the Defence Procurement Procedure (DPP)

However, the CAG observed that there are no provisions of concluding an IGA with a L-1 (lowest) bidder in the DPP.