India, Russia re-negotiating aircraft carrier cost

November 15th, 2008 - 10:37 pm ICT by IANS  

New Delhi, Nov 15 (IANS) India and Russia are re-negotiating the cost of the aircraft carrier Admiral Gorshkov amidst reports that Moscow has demanded an additional $2 billion over and above the $1.5 billion that the ship has been contracted.”The negotiations are on. It would be hard to say when they will be concluded,” a defence ministry official said, speaking on condition of anonymity.

He also discounted suggestions that the Russians were arm-twisting India into paying the additional cost, which was initially placed at $1.2 billion.

“The negotiations are being conducted in a spirit of cooperation given our close defence ties. Nothing will be done to jeopardise this,” the official maintained.

Indian Defence Minister A.K. Antony had discussed the issue with his Russian counterpart Anatoly Serdyukov during his visit here in September for the annual meeting of the India-Russia Inter-Governmental commission for Military Technical Cooperation.

The two ministers had also decided to establish a joint working group at the defence secretary level to resolve the Gorshkov issue as also delays in other defence deals.

After protracted negotiations, India signed a deal with Russia Jan 20, 2004 to buy the 45,000-tonne Gorshkov, along with 12 single-seat MiG-29 fighters and four twin-seat MiG-29 trainers for $1.5 billion.

Of this contracted amount, approximately $974 million was to be spent on upgrading and refitting the ship and $526 million on the MiG-29 jets and six Kamov Ka-31 attack and reconnaissance anti-submarine helicopters.

The delay in refurbishing the carrier has been attributed to two developments at the Russian shipyard where this is being undertaken.

The first was the realisation that the work involved in refurbishment had been grossly underestimated and much more would require to be done before the ship was made seaworthy.

The second was that the shipyard had transferred the bulk of the workforce engaged on the carrier to a new nuclear-powered submarine it has begun constructing.

The ship was to have been delivered in 2008 but is now likely to be handed over to the Indian Navy only in 2013 after 18 months of intensive sea trials.

The dramatic cost escalation has threatened to cast a shadow on long-standing defence ties between India and Russia. India depends on Russia for over 70 percent of its arms imports.

Meanwhile, the Russian government, on India’s request, has loaned $250 million to the Sevmash shipyard to ensure that the Gorshkov refit continues without any interruption.

The Russian government has also asked the yard to ensure that there are adequate personnel to work on the ship.

Sevmash, located in arctic Russia, has now recruited workers and engineers from across the country and at the same time abandoned some other projects, including a floating nuclear plant, to ensure that the work on the much-delayed Gorshkov project does not suffer any more.

The main work on the vessel’s hull is already done, and new equipment is being installed while the re-planning of interiors is under way. Indian officials have been posted at the generally wintry yard to monitor the work and to make sure that it is in accordance with the specifications drawn up by the Naval Headquarters in New Delhi.

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