India sticks with deal to buy 10 Dassualt Mirages

28th October 2004, Comments 0 comments

NEW DELHI, Oct 28 (AFP) - The Indian Airforce is short listing pilots to fly in 10 French fighter planes amid a rumpus over the use of illegal middlemen ahead of the USD 350 million deal, military officials told AFP Thursday.

NEW DELHI, Oct 28 (AFP) - The Indian Airforce is short listing pilots to fly in 10 French fighter planes amid a rumpus over the use of illegal middlemen ahead of the USD 350 million deal, military officials told AFP Thursday.

"Since no middlemen were involved when the deal was signed we are going ahead with plans to bring in the 10 Mirage-2000H planes," a senior official said although Dassault Aviation did have a contract with an arms negotiation firm prior to India's signing for the aircraft.

"Selected pilots will leave for France next month for the delivery," the official added.

The Indian Air Force (IAF) signed for 10 fighters from Dassault Aviation on September 19, 2002 to replace aircraft lost out of an 1985 order of 49 Mirages.

It also wants to buy 124 more modern fighters and according to highly-placed sources Dassault is ahead of two other global military aircraft manufacturers in the race to win the massive order.

The Indian Express newspaper Thursday put a question mark on a possible deal with the French firm, arguing New Delhi will now have to blacklist Dassault in line with a 1989 law that bans the use of middlemen in defence deals.

The issue of middlemen has been hyper-sensitive in India since the 1980s when late premier Rajiv Gandhi was accused in a USD 1.3 billion bribe scandal involving Swedish firm Bofors. It was Gandhi who then outlawed the use of middlemen.

Sources in the IAF, however, said negotiations with Dassault were at an "advanced stage" and said any move against the French firm could penalise the technology-hungry airforce.

"Now that a controversy has erupted we will put the evaluation process under a microscope but to ban Dassault would mean an end to (the) supply of spares for the two squadrons of Mirages we have with us," one source told AFP.

The controversy has clouded a visit to India by French Foreign Minister Michel Barnier, who Wednesday said the two-day trip also aimed to strengthen defence cooperation.

French court documents show that Dassault retained Keyser Incorporated, a Panamanian-based firm, to prospect for the Mirage deal.

Dassault promised Keyser 2.5 percent of the sale reportedly worth nearly EUR 347 million (USD 443 million).

Keyser took Dassault to court in Paris in 2001 demanding payment of more than EUR 1.6 million (USD 2.04 million) in commission due for a first tranche of the contract.

However, the Paris commercial tribunal ruled that a contract Dassault had signed with Keyser in September 1996 and renewed in June 1997 and July 1998 ran out on December 31, 1998.

There was no evidence it had been extended and Keyser was ordered to return to Dassault USD 100,000 paid in 1997 as an advance on commission.

Keyser contended in court that the commission contract had effectively run on since meetings continued with Dassault.

Dassault even charged that Keyser threatened to reveal its role to India in a bid to blackmail the company.

According to IAF chief S. Krishnaswamy Dassault hired Keyser for market research in the region.

However the air chief said New Delhi would study any document showing Dassault employed Keyser to try to swing the deal.

French firms are also hoping to sell six submarines and 36 missiles worth EUR 2 billion (USD 2.5 billion) as well as 43 Airbus planes to Indian Airlines.

© AFP

Subject: French News

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