 Hello and welcome to NewsClick. Today, we are going to discuss the Controller and Auditor General's report, the CAG report, which has been placed in the parliament on the Rafale deal. Pornjoy, how do you react to this? In the Supreme Court seal cover, we had been told, this is what the Supreme Court judgment said, that the CAG has redacted the price and placed it before the parliament. All the figures have been given to CAG. This was said about two months back. Now, we find that actually CAG has redacted as predicted in the Supreme Court seal cover, presumably, that the price figures. Does it show that the CAG had already told the government what it was going to do? Pramir, firstly, this report presented by the Controller and Auditor General of India in parliament today, which is the 13th of February 2019, is not only about the Rafale aircraft manufactured by Dassault aviation. It deals with 11 contracts that were signed by the Indian Air Force. These were capital acquisition contracts between 2012-13 and 2017-18. The total value of all these contracts came to 95,000 crore approximately. Now wait, what is very interesting is right up front, the preface says that the Ministry of Defense in on the 15th of January 2019 had requested the CAG's office to redact the commercial details pertaining to the MMRCA, which is the Media Multi-Role Combat Aircraft Rafale. CAG was reluctant and refused to carry out the redaction of price information on account of difficulties in comprehension, and they can compare, but nobody will understand. I would like to add that the Ministry of Defense repeatedly told the CAG about this. The CAG, which is the Controller and Auditor General of India, is a religious organization. It is believed that it has a new president, who has not said before and then agreed. When did the Supreme Court give the letter and when did the Supreme Court verdict come on this issue? About two months back, which is after this letter by the CAG saying that we do not want to redact the price. In November, they have submitted the sealed cover to Supreme Court and 14th December, the verdict came out. In November, in the sealed cover, they predicted that this will be a redacted one, and they have told that to the CAG, as per the CAG report, in February this year. And it is truly amazing and CAG refused to accept it initially. Now, it is true that without those details, it's virtually impossible to decipher what is being compared to what, because all of it is X, Y, Z, M, all kinds of letters have been used. Let us, for instance, agree with what the government seems to be saying, that the Supreme Court judges were weak on grammar, they did not understand the different written past tense, present tense, and future tense. So, we will leave that to the Supreme Court to sort out its and the government's English, because we don't have what it is. I say, 11th December, CAG saw somebody. 11 contracts. Apache attack helicopter, Chinook heavy lift helicopter, pilotess, trainer aircraft, missiles, ammunition, lots of things, reconnaissance system, weather radar, attack helicopter apache, 11,420.05 crore. You gave everyone's number. You made your BXS in just one place. 10 defense purchases, capital acquisition. Now, on the 11th one, in the price column, just the price column, they blacked it out. That means it might have mentioned, we don't know whether it's mentioned, whether they had it, we don't know. It's blackened here. This is public money. Why, why Modi government is so scared or reluctant to disclose what they are spending from the consolidated fund of India. They have also said 95,000 crore in total purchase. They have also said, having said that it takes two minutes for you to calculate that the Rafale deal, as per CAG's 95,000 crore figure and the other 10 figures that they have given is about 60,000, 61,000 crore. It's nearly 61,000 crore. That's what it is saying to me. So, why this reduction of the total price if they had to redact the price of the details, if at all. Now, as the whole world knows, there is enough details out there which makes clear what the so-called India specific enhancements for which the prices, this presumably are keeping secret and the total price of the aircraft, they're keeping secret. This is really more your question. The India specific enhancements are not India specific enhancements. They are only India specific enhancements for Rafale. They are for other aircraft including for instance Eurofighter. These are very much a part of the base many of them. Not all of them, but for the many of them base bid and this is reiterated by the CAG. It's not me or you saying it. The CAG is saying it that these, lot of these were not India specific enhancements. They were called for in the tender itself. These were the deviations Rafale had taken because of which they were actually going to be thrown out of the bid. So, therefore, this whole English about India specific enhancement itself is a problem. Now, we have to take it in a different way. In a comparison, the CAG gives this comparison that ASQR is the India specific enhancements. That is ASQR is Air Staff Qualitative Requirements. Yes. So, Rafale was not matching with 14 of them where Eurofighter Typhon was lacking in four of them. Both the parties agreed that they will put it together. Now, my basic question is slightly different. I mean CAG says that this proposal was a totally different one. And CAG goes into complete length to describe the entire process of the MMR CA deal, okay. But when it come to this one, when it come to this one, they are completely, they are not at all saying a single word on the process. Who authorize the Prime Minister? In fact, it is a very interesting question you are raising. They have given details of how bad the earlier process was. They are starting from 2000 and up to 2015, then the Prime Minister's announcement. They are not saying what prompted the Prime Minister to announce, who authorize the Prime Minister to announce. These are not a part of this audit at all. On 27th of March, there is, according to the CAG, a decision to scrap the MMR CA deal. The Defence Minister public record seems to know about it when on March, on April 3rd? Yeah, on April 3rd. Jay Shankar, the Foreign Minister, does not know about it, one secretary. Two days before Mr Modi leaves, Modi leaves for France was not aware that this deal is going to be cancelled. A new deal is in the offing. New deal is announced and you can go back and see the announcement. They claim though they were not really agreement, it was just announcement. The announcements are made on 10th April. From 27th of March to 10th April, how would the defence procedures followed? This is the question you are raising. There is a procedure which has to be followed. Air Force has to say, I want this. On the basis of this, you have a procedure and if you are deciding the L1 bidder is to be negotiated with for a specific number of aircraft, you are scrapping the tender, then the L1 bidder has no meaning. And if you consider the L1 bidder to be still extend alive for this purpose, then the other bidders also could have been alive. To the Supreme Court, the government said on March, they started to, even this report says the same, they started to withdraw the MMR CA process. 10th March, his Prime Minister, Modi announced a new deal. 10th April, 2015. Now in this report, it starts only after the audit says only after whatever happened after the announcement of the Prime Minister's announcement. What prompted him to announce this? Who authorized him? Where is the air secure? What kind of a decision was reached which was not communicated to the defence minister? If such a decision was there, the details were not provided to the CAG as per this report. How did you come to a new agreement? Because the DPP, the defence procedure, even for intergovernment and agreement is quite clear. There has to be a set of processes to be followed. For our viewers, one must understand the 2G scan was not about who took the money. 2G scan was a violation of procedures. That is what the court said, the violation of procedures and violation of procedures is what the coal secretary has been convicted of. So, it is not that the violation of procedures are just matter of detail, they are the central issue when we talk about corruption and the government. CAG report blackened the price. The government do not want anyone to see the price. This morning, in the Hindu newspaper, N. Ram put out the dissent note of 3 members of the Indian negotiating team, the contact negotiation committee. There were the 3 technical members who had some ideas of this. That says the exact price is almost 7.88 billion, approximately few millions here and there. Which has been going around the media for a very long time. Now, this CAG report, when we take that price and that report says that dissent note says two things. One, and this also says, this CAG report also says there was a proposal from EADS that is the manufacturers of Eurofighter Typhoon, which Indian Air Force selected the two machines. And one was Rafaal and the other was Eurofighter Typhoon. And Eurofighter proved to be more expensive at that time. They are saying they were cheaper. 2012, they proved to be more expensive. Exactly. CAG report says that was cheaper. In that case, if they had to go, if Modi government had to go for a new deal, why didn't they consider that? The recent CAG report, government given to CAG report, government has told the CAG that it was an unsolicited report. So, they didn't go for unsolicited bid. Yeah, unsolicited offer. So, they didn't consider that. Assuming all the figures, redacted figures, which we don't see are there, they're all correct. Even assuming that based on the report, is it an Apple to Apple comparison to look at the price of the earlier 126 aircraft and the 36 aircraft bought to a common base or are there differences? Difference, Mr. Nirmala Sita Raman and Arun Jaitley. Arun Jaitley said 20% lower. Nirmala Sita Raman said it's 9% lower. And so did Trapeer. Trapeer said 9% cheaper in the interview. The reason is, in this particular deal, there is no bank guarantee. Correct. The bank guarantee has a price. If you look, see, the deal, it's the contract is signed on 2016. The contract ends on 2022. So, if you go for a bank guarantee, if as per how the difference deals works, if the manufacturer is refusing to give a bank guarantee, the government force them to give a bank guarantee saying that we will be at the bank guarantee charges. Charges are being sold. Correct. Right. The descent note, the descent note of those three INT members, they worked out. India negotiating team. Yes. They worked out the charges, which was coming to 7.8%. So, this means 7.8% fees are increasing. From that, 7.8% will get 2.8 minus. So, the difference is approximately 5%. So, the price is high. I'm going to give them a benefit of doubt, just because they have used so many letters of the alphabet to not tell us what the calculations are. So, we really don't know what they have or haven't done, which is what the CAG itself said, that nobody will understand when we deduct the price, what the hell have we audited. And I would go with that. Yes, we don't understand what the hell they have audited. But leaving that out, the issue is that bank guarantee was not considered in the comparison. That is fairly clear from these two accounts. I think two very important issues. A 59,000 crores has been bandied about on the total price. Nearly 61 now. Now, as per this, according to CAG now, by simple subtraction, we reach a figure of 61,000 crores, roughly. So, that is one. The second is this 2.86 certainly is far lower than 20%, 9% that have been talked about. That was not there. The minister earlier. Actually, it's not there. And even this 2.86% seems to be highly suspect, because honestly, the bank guarantee figures we know, according to the dissent note of the three technical members, means that this price was going to be higher than the original price that they had offered. So, I think on both these counts, best we can give to the CAG. Well, shall we say, barely pass marks for their calculations, but certainly not much for transparency. No, I will use harsher language. I will allow you to do that. I'm saying it's a sham. I would, you're saying it's a sham. I am saying my classmate in college, Mr. Rajiv Merishi, the controller and auditor general of India, he's a constitutional functionary, hasn't exactly covered his office with glory by selectively choosing not to disclose information, which in the opinion of not just me, but large numbers of people would not have compromised the security of this country, but selectively redacted information, which evidently suits the ruling regime. So, the autonomy of the CAG, the independence of the CAG, I believe has been compromised. And as we discussed at the very outset, how did the Supreme Court know what was going to happen all this while, two months before? Last concluding remark, which I would like for Ajay to become, giving him the last chance on this, Ravi. No, I haven't given that. I'm going to not go on the assault. I'm going to ask you, Maharshi was the finance secretary. He's now become the CAG. This did go to the finance ministry in spite of what Mr. Jaitley says, because the defense procurement procedure is very clear that this has to be ceded by the finance ministry. Was it right on this part to have done this, signed the report, or should he have recused himself saying, I'm not going to be partied to this? Let somebody else in the CAG look into this. According to Mr. Arun Jaitley, the finance minister, who has given Mr. Raji Merishi a clean shit, saying that the finance secretary really had nothing to do with it. They were junior flunkies, but after all, he still headed that department. The other justification could be that Mr. Merishi were a different hat at that point of time. As the secretary, the senior most secretary in the ministry of finance, he was holding a particular position. Now that he's in a constitutional position as the head of the control and auditor general of India, he can afford to look dispassionately at his own judgments, if you like. It's like saying somebody was finance secretary and becomes RBI governor, and therefore his position changes, and he can afford to be critical of himself. Regretfully, I wish I could be as charitable as this to my friend Mr. Raji Merishi. Then we left one thing in between here. The price was, for this particular deal, for 36 Rafal, the price what the so was given in 2000, 7.8 billion in 2015. Our government and ministers keep saying, this price is a better negotiated price. Before the negotiations started, this price was submitted by the so. Look at today's design note, it says. Okay, what you are saying is this was the price which was given at that time, submitted by Dasault. Negotiations does not seem to have made any change in the price. We must take it at face value. Is that what you are saying? Ravi, despite my classmates, I don't want to have the last word. I'd like you and Ravi to have the last word. I want to ask one question here. Where does Mr. Anil Ambani figure into all this? Well, there is going to be a separate CAG report on the offset contract that has also been written over here. So we have to wait for it with bated breath, whether this will do. Do you think it will happen before the elections or after the elections? How can parliament is over now? How it will not come out? I think it's very clear. The session is over. Parliament session is ending today. This is the last day. So why did they wait for the last day of the session of the government? This is today is Modi government's last day in the parliament. That's right. Thank you very much, both of you for being with us, trying to enlighten me and the viewers of this very complicated picture that the CAG has presented before the nation today. Enough for today. We'll keep coming back to you with more ruffles because I don't think this issue is going to go away.