The CAG noted that there was a manipulation in identifying the lowest bidder to be awarded the contract by including contract product support in one contract (EADS) and non-inclusion for Boeing
New Delhi: The BJP on Thursday launched a scathing attack on the UPA for the Rs 10,700-crore spy plane deal it struck in 2009 with US firm Boeing. The party said that the defence ministry during the UPA regime had twice benefited Boeing by first inflating the price of the plane offered by a Spanish rival and then by signing a separate product support contract with the US firm later on.
"The CAG has noted that in June 2017, Navy concluded an interim support agreement (ISA) with Boeing, at a cost of $131 million, for a period of three years, containing components of products support also. Hence, M/s Boeing was benefited twice. Firstly, by inflating M/s EADS bid and secondly, signing a separate product support contract with M/s Boeing at a much higher price," a top BJP official told MyNation.
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After the details of the scam emerged in the Comptroller and Auditor General's (CAG) report tabled in Parliament on Tuesday, it was revealed that the deal signed during the Congress regime under prime minister Manmohan Singh was "incorrectly" awarded to Boeing, while European firm EADS CASA was the lowest bidder and deserved to have been given the contract.
A note prepared by the BJP said the defence acquisition council (DAC) had approved the acquisition of eight long-range maritime reconnaissance anti-submarine (LRMRASW) aircraft on September 16, 2005 and the tender asked for product support, in terms of maintenance, materials and spares, to be provided for a minimum period of 20 years.
"The commercial bids were received by March 16, 2006 where the commercial bid of M/s Boeing was $2,187.54 million (Rs 8700.37 crore at the rate of Rs 39.77/US dollar) and that of M/s EADS was €1323.72 million (Rs 7776.0 at the rate of Rs 58.74/euro)," the note said.
The note further stated that the bid submitted by M/s EADS had included the cost of two years product support at the rate of €7.1 million per annum in their bid whereas the Boeing bid was silent on the issue." the document states.
While financially comparing the bids, the bid of M/s EADS was enhanced to €1483.12 million (Rs 8,712.44 crore) by including product support cost for another 18 years at the rate of €7.1 million per annum basis whereas the main contract for supply of P-8I and other supplies was signed on January 1, 2009," the document said.
In its report, the CAG noted that there was a manipulation in identifying the lowest bidder to be awarded the contract by including contract product support in one contract (EADS) and non-inclusion for Boeing, thereby making Boeing the lowest bidder erroneously.
Hitting out at the Congress government, the BJP official said, "The two bids were not compared in a fair and even manner.
"Hence, M/s Boeing was benefited twice. Firstly, by inflating M/s EADS bid and secondly, signing a separate product support contract with M/s Boeing at a much higher price and then signing a product support contract worth $131 million in 2017," the officials said.
On the allegation by the Congress that the NDA government had also signed a contract with Boeing for four more P-8Is, the party said, "The defence ministry had signed a contract with M/s Boeing for additional four P8Is, under the option clause of the main contract, on July 27, 2016 and this was done to speed up procurement and avoid the entire tendering process afresh."
The BJP official said the NDA government had signed the contract with Boeing on 2006 prices. "This has resulted in significant savings to the government exchequer as the extra amount was not paid on account of inflation over 10 years. Assuming 5% inflation per year, the savings were more than 50% for each plane purchased in 2016," the official added.
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