Monday, November 16, 2009

India to pay around $2.2 billion for Gorshkov's refit to end wrangling

Rajat Pandit

The protracted bitter wrangling over huge cost escalation in aircraft carrier Admiral Gorshkov, which caused a distinct chill in theexpansive Indo-Russian defence ties, is virtually over now.

After three Indian delegations visited Russia one after the other last month, the two sides came together in New Delhi on Tuesday-Wednesday for the `firm and final' price negotiations to break the festering deadlock.

"We are confident the total cost for Gorshkov's refit will be pegged somewhere around $2.2 billion,'' said a top Indian official.

India has already managed to `reduce' the $600 million figure being asked by Russia for the 44,570-tonne Gorshkov's year-long sea trials in the Barents Sea slated for 2011-2012.

While most of the trials will still be held in Russia, apart from training of Indian pilots for MiG-29K take-offs and landings from Russian carrier Admiral Kuznetsov, some will now be conducted in Indian waters to cut costs.

Defence minister A K Antony, on his part, told Parliament on Wednesday that "acceptance trials'' for delivery of Gorshkov, rechristened INS Vikramaditya, to India are `expected to be completed' in December 2012.

India, of course, is banking upon Gorshkov for its long-standing aim to have two operational `carrier battle-groups' by 2015 or so, with the other carrier, a 40,000-tonne indigenous warship, being built at Cochin Shipyard.

Incidentally, during a recent visit to Sevmash Shipyard in north Russia where Gorshkov is berthed, Russian President Dmitry Medvedev said the delay in the carrier's upgradation was `the sole irritant' in Indo-Russian relations.

As first reported by TOI, the new contract for repair and re-equipping of Gorshkov -- for which India has already paid $602 million till now -- will be one of the first big defence procurements to be cleared by UPA-2 towards end-July or early-August.

That will finally bring closure to Gorshkov's controversy-ridden saga, which began in the mid-1990s with Russia offering the second-hand, partly-burnt carrier as "a free gift''. The condition was that India would pay for its refit as well as the MiG-29K fighters to operate from its deck.

The $1.5-billion contract was finally inked in January 2004, with the carrier refit costing $974 million and the rest for 16 MiG-29Ks. Under it, Gorshkov was to be delivered by August 2008.

But then came the shocker. Russia in mid-2007 demanded another $1.2 billion for Gorshkov's refit in addition to the initial $974 million, apart from pushing back its delivery to December 2012, holding that work on it had been "grossly under-estimated'' earlier.

Though after much heart-burn, India eventually agreed, more was to follow. Russia last year said it now wanted $2 billion more for refit, taking the total cost to around $2.9 billion. India, of course, wants the figure down to the $2.2-billion mark.


Good News.........

I wish third carrier to be from UK.............

Thanks for the news.......

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