Updated: September 24, 2020 11:23:10 am
In a series of tweets, Chidambaram said the French manufacturer should have completed its first annual commitment to meet compensation obligations as of Wednesday.
Former union minister P Chidambaram criticized the government on Thursday saying whether it would declare that Rafale maker Dassault Aviation was meeting its compensation obligations even after the country’s auditor said it has not kept its promises regarding technology transfer. “Is the CAG report opening a can of worms?” tweeted.
In a series of tweets, Chidambaram said the French manufacturer should have completed its first annual commitment to meet compensation obligations as of Wednesday.
After its latest reports were presented in Parliament, the Comptroller and Auditor General (CAG) said on Wednesday: “… foreign suppliers were found to have made various compensation commitments to qualify for the main supply contract, but more late, they were not serious about keeping their commitments.
Referring to the Rafale agreement in this context, the CAG said: “For example, in the compensation contract related to 36 medium multi-role combat aircraft (MMRCA), suppliers M / s Dassault Aviation and M / s MBDA initially proposed (September 2015) to fulfill 30 percent of its compensation obligation by offering high technology to DRDO ”(Defense Research and Development Organization).
In its statement, the CAG said that from 2005 to March 2018, 46 compensation contracts were signed with foreign suppliers totaling Rs 66,427 crore.
“Under these contracts, by December 2018, vendors should have settled Rs 19,223 crore. However, the compensations that they claimed to have been settled by them were only Rs 11,396 crore, which represents only 59 percent of the commitment. Furthermore, only 48 percent (Rs 5,457 million) of these compensation claims submitted by providers were accepted by the Ministry, ”noted the CAG.
The compensation policy was adopted by India in 2005 for all defense capital purchases above Rs 300 crore made through imports. The foreign supplier, or original equipment manufacturer (OEM), had to invest at least 30 per cent of the purchase value in the Indian defense or aerospace sectors.
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