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Russia says India has to pay $2 bn more for aircraft carrier Admiral Gorshkov

November 15, 2008
NEW DELHI: In a move to arm-twist , Russia has now publicly demanded as much as $2 billion more to deliver a fully-operational aircraft carrier Admiral Gorshkov by end-2012.From The Times of India

The $2 billion figure had emerged after a flurry of top-level discussions and visits to the Sevmash shipyard in north Russia, where the decommissioned 44,570-tonne carrier has been berthed for the last 12 years.

But the Indian defence ministry wanted to get the requisite “mandate” from the Cabinet Committee on Security (CCS) to “formally renegotiate” the entire 2004 contract with Russia since “all the parameters set for payments had changed totally”.

India’s grudging acceptance that the scope of work on Gorshkov was much more than what was originally assumed had come after much bitterness about Russia’s propensity to escalate costs midway through execution of defence agreements.

Now, as per reports coming from Moscow, Russia has said that it would induct Gorshkov into its own Navy if India failed to pay the additional $2 billion for completing the extensive refit on the warship.

Quoting Sevmash shipyard chief Nikolai Kalistratov and Russian defence ministry officials, the reports said Moscow had stressed that Gorshkov would only be handed over if India provided sufficient funding to complete the refit.

But it may not be smooth sailing here in India since the finance ministry has already shot down the defence ministry’s proposal to consider Russia’s original demand for a $ 1.2-billion jump in the refit costs, holding that it will set a bad precedent for other defence deals.

The finance ministry, in particular, has objected to the figure of $600 million for the year-long sea trials of Gorshkov slated to be held in Barents Sea from 2011.

Defence ministry officials, however, say that once the partly-burnt huge warship was “opened up” at Sevmash, it was found that the work needed to make it fighting fit again had been “grossly underestimated”. The estimate for the ship’s new cabling, for instance, jumped up to 2,400 km from the original 700 km.

“We have already invested a lot of money in Gorshkov and we own the ship now. There is no question of giving it up. An aircraft carrier is a critical requirement that we as a country need,” said an official.

Gorshkov, of course, forms a crucial part of India’s plan to have two operational `carrier battle-groups’ by the middle of the next decade. The country’s solitary and ageing 28,000-tonne carrier INS Viraat is currently undergoing another life-extension refit to ensure it can run at least five more years.

Moreover, the delivery of the 37,500-tonne indigenous aircraft carrier being built at Cochin Shipyard is likely to take place only by 2014-2015 or so.

TOI was the first to report in July that India may have to shell out an additional $2 billion over and above the original $1.5 billion package deal signed in January 2004, under which India was to get a fully-refurbished Gorshkov with 16 MiG-29K fighters by August 2008. Incidentally, the warship was rechristened INS Vikramaditya after India paid an initial $500 million earlier.