Thaindian News

New Delhi, Nov 16 (IANS) A 40-member Russian delegation has arrived in India to discuss the price hike for refurbishment of aircraft carrier Admiral Gorshkov, even as both the sides have “dug in their heels” on what they are willing to settle as the final price, an Indian Navy official said Monday.
The price negotiations for Gorshkov, to be commissioned in the Indian Navy as INS Vikramditya, have dragged on for long with both sides refusing to budge from their stands.

“The Russian delegation is in town for the price negotiation of the aircraft carrier. But the current position is that both the sides (Indian and Russia) have dug in their heels as far as final price is concerned. What will matter now is who blinks first,” the senior Indian Navy official told IANS, requesting anonymity.

The Russians are demanding $2.9 billion for the refurbishment work, whereas Indians are asking them to climb down to $2.1 billion.

However, the official said that till the time a final price tag is fixed for the 45,000 tonne Kiev class aircraft carrier, the work on the vessel will progress at the usual pace.

“That is the agreement between the two sides that the work on the aircraft carrier would not be stalled. The delivery date for the aircraft carrier fixed at 2012 will be honoured. India has released about over 650 million dollars so far for the refit work,” the official added.

The price negotiations failed to make any headway even during Defence Minister A.K. Antony’s visit to Russia.

India had paid around $600 million initially after an agreement between the two countries in 2004, according to which the old aircraft carrier was gifted as free but India was to pay $974 million to modify and upgrade it in accordance with Indian Navy’s specifications.

In 2007, however, the Russians said they had made a mistake in their calculations to repair and modify Gorshkov, and demanded another $1.2 billion. Recently, they have added still another $700 million saying that modifications, and then sea trials, would be more expensive than estimated by them earlier.

The total demand by the Russians now touches $2.9 billion, instead of $974 million as originally contracted.

The delivery of the aircraft carrier has also been pushed from 2008 to 2012-13, although repair work on it is continuing without break at the Sevmash shipyard in northern Russia’s Arctic coast.