Comptroller and Auditor General (CAG) has criticised the $2.1 billion deal with the US to buy eight Boeing P-8I maritime surveillance aircraft saying the planes were not cheaper than the competing Airbus A-319 aircraft offered by European Aeronautic Defence and Space Company (EADS). The contract was signed in January 2009 by the UPA government.
The CAG also pointed to other discrepancies and shortcomings, including Boeing not adhering to the offsets agreed in the deal and the plane's radar not having adequate range and plane's limited anti-submarine warfare capabilities in absence of no separate contract for bombs.
The CAG report will come as a shot in the arm for the NDA as it battles allegations by the Congress-led Opposition of wrongdoing in the Rs 59,000 crore deal for 36 Rafale fighter aircraft, but it is interesting to note that the present NDA regime signed a $1.1 dollar deal with Boeing for four more P-8I aircraft in 2016.
CAG says the Ministry of Defence (MoD) while evaluating the bids for the conclusion of the contract, enhanced the financial bid of EADS for 20 years of product support while ignoring the same for Boeing.
The Boeing bid was Rs 8,700 crore in November 2007 while EADS quoted Rs 7,776 crore, and this included two years of support for the aircraft.
The MoD enhanced EADs bid to Rs 8,712 crore by including support for the planes for 18 years but it did not do something similar for Boeing, which said it would provide 20 years of support under a separate deal.
However, the eight P-8I aircraft, which were delivered between 2013 and 2015, did not have support after the expiry of warranty in June 2017 and this necessitated the navy signing a $131 million interim agreement with Boeing for supporting the planes for three years, says the CAG.
Boeing has also not fulfilled many offset obligations of Rs 3,127 crore till date though they were to be completed by August 2016 as per the contract. What is surprising is that the MoD has not imposed any penalty on Boeing in this regard, says the CAG.
Meanwhile, the end user of the planes, the Indian Navy, is so impressed with the capabilities of the P-8I that it has asked the government to order 12 more. The P-8I is a derivative of the commercial Boeing 737-800ERX passenger aircraft converted to be used for maritime surveillance and detecting, tracking and destroying both surface as well underwater threats.
The plane is armed with Harpoon missiles, torpedoes, depth charges and rockets. The aircraft plays a vital role in keeping a watch on Chinese navy ships and submarines in the Indian Ocean, spanning from the Horn of Africa to the South China Sea.
