Thaindian News

New Delhi, Aug 27 (IANS) The final price of the Russian-built aircraft carrier Admiral Gorshkov will be arrived at in two days time, Indian Navy chief Admiral Sureesh Mehta said Thursday.
The price negotiation for the aircraft carrier, which will be commissioned in the Indian Navy as INS Vikramaditya, had taken a back seat following the government’s auditor punching holes in the deal. Currently a Russian delegation is in the country to finalise the hiked price for the warship.

“Price negotiations are well underway. The Russian team is visiting us,” Mehta told reporters here.

“The time frame (for the price fixation) is short. Hopefully day after tomorrow,” Mehta added.

The original deal, signed in 2004, was for India to pay $1.5 billion for the vessel, mothballed since a devastating fire in 1995. Of this, $948 million was to be spent on refitting the 45,000 tonne vessel and the balance on the MiG-29 combat jets and Kamov anti-submarine warfare helicopters that would be deployed on the ship.

Since 2007, however, Russia has steadily been asking for more money, saying the extent of repairs to the vessel had been grossly underestimated. Various reports say Russia is now asking for between $2.2 billion and $2.9 billion.

Protracted negotiations, even at the level of the Indian and Russian defence ministers have so far failed to resolve the impasse.

The negotiations were on the final stage in July this year when the Comptroller and Auditor General (CAG) said that the second hand vessel was 60 percent costlier than a new carrier.

The issue had figured in parliament last month, with Defence Minister A.K. Antony saying that a fresh contract for the carrier would be signed after verifying the CAG’s findings.

The navy had contested the audit report, with Mehta himself claiming to “write a cheque” if an aircraft carrier could be found for less than $2 billion.

Originally scheduled to be delivered in 2008, the vessel is now likely to arrive in 2012.