India pays $102m more to Russia for Gorshkov warship

NEW DELHI: India has paid an additional $102 million to Russia to speedSHIP_CV_Admiral_Gorshkov_lg up Admiral Gorshkov aircraft carrier refit project, even as officials
from both sides are working overtime to break the deadlock over Moscow’s fresh demand for $2.9 billion for the warship.

With the release of additional funds last week, India has now paid a total of USD 602 million for Admiral Gorshkov, purchased in 2004 for USD 964 million and currently undergoing repair and refit at Sevmash shipyard in north Russia, a Defence Ministry official said here on Thursday.

Only last week a team of Defence Ministry officials had visited Moscow to discuss the scope of trials of the aircraft carrier.

This week, a team led by Defence Secretary Vijay Singh visited Moscow for the high-level monitoring committee meeting, where Russia’s additional demand for USD 2.9 billion was discussed.

“It has been decided that by July we will come up with a firm cost (for Gorshkov) on the basis of which fresh inter-governmental agreement and a time schedule for delivery before December 2012 can be worked out, so it does not roll over to the next year. The final cost can be somewhere closer to USD 2.2 billion than USD 2.9 billion,” the official said.

After India bought Admiral Gorshkov, it was sent for a refit at Sevmash, which was originally a submarine building yard. Since 2007, Russia has been making additional demand for the repair and refit project, citing cost over-runs due to increasing work on the warship, the Defence Ministry officials said.

Their first demand for hiking the cost came in 2007, when Russia sought an additional USD 1.2 billion for the aircraft carrier and to rework the original 2004 contract.

India agreed to renegotiate the deal only in December last, after holding for long that there was no room for a fresh contract for the warship. But the Russians quoted their final figure of USD 2.9 billion in February this year.

“Another Defence Ministry team will be leaving for Moscow in the middle of June to work out the final details of the renegotiation,” the official added.

Regarding the air element of the Gorshkov deal, the official said India had already purchased 16 MiG-29K fighters from Russia for around USD 550 million and there was an option available to buy 29 more of these aircraft and another six trainers, which is yet to be cleared by the Cabinet.

In fact, New Delhi is likely to order additional MiG-29K as it intends to also fly these fighters on its indigenous aircraft carrier, for which the keel-laying took place this February and which is scheduled to join the Navy in 2012, the official said.

“Already a batch of Navy fighter pilots have trained on MiG-29Ks and another batch of pilots would go in September this year to practice landings on Russian aircraft carrier Kuznetsov,” the Defence Ministry official said.

But India was waiting to take a decision on the additional order for MiG-29Ks as it “did not want a situation when we have the aircraft, but not the warship on which it is to operate and the life of the aircraft is wasted.

“The question is whether we exercise this option of follow-on orders now or wait a bit, which will obviously lead to escalation in its cost,” he added.

Asked about the Gorshkov repair work at Sevmash, the official said the shipyard had already engaged about 2,000 men from its workforce on the warship, which was just recently taken out of dry dock and was floating at present.

“The work on Gorshkov is at an entirely different stage now. Russians are now working towards meeting the delivery schedule of December 2012 for the warship,” the official said.

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