November 29, 2009

Gorshkov deal unlikely during PM's Russia visit: Antony

27 Nov 2009, 1626 hrs IST, IANS


NEW DELHI: The revised deal for the Russian aircraft carrier Admiral Gorshkov that the Indian Navy has purchased is unlikely to be clinched during
Prime Minister Manmohan Singh's Moscow visit next month, Defence Minister AK Antony said on Friday.

"No, it is not," Antony said when asked if the revised deal for the ship could be signed during the visit.

Antony was speaking on the sidelines of a seminar organised by the Institute of Defence Studies and Analyses here Friday.

However, senior naval officials say that there have been "positive developments" in the negotiations on the final price for the refurbishment of the aircraft carrier, which will be inducted in the Indian Navy as INS Vikramaditya.

"There have been positive developments in the sense that the Russians have agreed to not to escalate the cost further and to justify the price quoted so far," said a naval officer, requesting anonymity.

A 40-member Russian delegation was in New Delhi earlier to discuss the price hike issue.

The price negotiations for Gorshkov have dragged on for long with both sides refusing to budge from their stands. The Russians are now demanding $2.9 billion for the carrier, whereas the Indians are asking them to climb down to $2.1 billion. This is against the original price of $1.5 billion that had been agreed to.

However, the officer said that till such time a final price tag is fixed for the 45,000 tonne Kiev class carrier, 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 schedule of 2012 will be honoured. India has released about $650 million so far for the re-fitting work," the officer added.

The price negotiations failed to make any headway even during Antony's visit to Russia in October.

India had paid around $650 million initially after an agreement between the two countries in 2004, according to which the aircraft carrier was gifted free but India was to pay $974 million to modify and upgrade it to the Indian Navy's specifications. The balance of the $1.5 billion was for the 16 MiG-29 jets, as also Kamov anti-submarine warfare helicopters that will be deployed on the ship.

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

The delivery of the aircraft carrier has also been pushed from 2008 to 2012. The ship is being re-fitted the Sevmash shipyard in north Russia's Arctic

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