Tuesday, March 21 2006 12:52 Hrs (IST) - World Time -

New Delhi: Government has not paid an extra amount of Rs 4,500 crore in the Scorpene submarine deal with two French firms and achieved a reduction of Rs 313 crore compared with what was negotiated in 2002, Defence Minister Pranab Mukherjee said today(Mar 21,2006).

"The government did not pay an extra amount of Rs 4,500 crore than what was negotiated earlier. On the contrary, after the present government came to power, it re-examined theproject even though all negotiations had been completed in2002 and the Ministry of Finance had accorded approval to the project in 2003," he said in a suo motu statement in Lok Sabha.

Mukherjee said the UPA Government held negotiations and was able to "Achieve a reduction of Rs 313 crore in the contracts with two French firms from the negotiated position in 2002".

The Defence Minister's statement came after the Opposition NDA alleged a scam in the multi-crore Scorpene deal demanding the termination of the contract.

"No contract or contracts were signed with French firms for Rs 16,000 crore for the Scorpene project. The total cost of the two contracts signed with the two firms, M/S ARMARIS and MBDA, for the project is Rs 7,197 crore," he said.

Besides the French firms, "The only other contract that was signed was with the defence PSU Mazagon Docks Limited (MDL) for Rs 5,888 crore for indigenous construction of submarines".

On reports about alleged involvement of middlemen and payment of commission, Mukherjee said while two Integrity Pacts were signed with the French firms to ensure transparency in the project, the firm accused of paying commissions to middlemen has 'denied all allegations'.

The French Embassy in India has also termed the reports as 'slanderous', while the French firm has moved the Delhi High Court against the journal which first made the allegations, he said.