Thaindian News

New Delhi, July 13 (IANS) A 30-member Russian team is in India to resolve tangle over cost escalation and fix the final price for the aircraft carrier Admiral Gorshkov, which India has sought to buy, an official said.
India recently injected urgency in the timely execution of the contract and set July-end as the deadline to resolve the deadlock over the cost escalation. The team hopes to do this, after which a fresh contract will be signed.

“A 30-member team is in Delhi for some time. They are here for the final negotiations on the price hike,” a senior defence official told IANS.

In May-end, India had released $102 million to Russia for the 45,000-tonne Kiev class aircraft carrier.

The deal for Gorshkov was signed in 2004 for approximately $948 million. However, the project hit the headlines in 2007 as the delivery date was pushed back and the Russians increased the price.

With the latest installment, India has paid nearly $602 million of the originally contracted $1.5 billion for the refurbishment of the Gorshkov, which has been mothballed since 1988. According to the official, Gorshkov, currently undergoing a refit at the Sevmash shipyard in Russia, has been moved from its dry dock and will be towed into the sea by the year end.

According to the senior officials involved in the negotiations with Russia, the new quoted price of the aircraft carrier fluctuates between $2.2 billion and $2.9 billion and Moscow may come around to the lower price to accomodate New Delhi.

The two sides have been carrying on price negotiations for over a year. India has not willing to pay what it considers an unreasonable escalation that has nearly doubled the cost of the aircraft carrier.

The dramatic cost escalation has threatened to cast a shadow on the long-standing defence ties between India and Russia.

Meanwhile, the basic training for the first batch of the Indian Navy pilots on the MiG-29 combats that will be operated from the Gorshkov has been completed.