By IANS
New Delhi : India is reconciled to paying at least a part of the additional $1.2 billion Russia is demanding for an aircraft carrier the Indian Navy has purchased for $1.5 billion.
“The original negotiations were sketchy. This has forced us to re-examine the entire issue,” a defence ministry official said here Friday.
“We will have to arrive at a mutually agreed price. It’s hard to say at this stage exactly how much more we will have to pay,” the official added, speaking on condition of anonymity given the sensitive nature of the subject.
After protracted negotiations, India had in 2004 agreed to purchase the Admiral Gorshkov, now renamed INS Vikramaditya. If the contracted amount, approximately $974 million was to be spent on upgrading and refitting the ship, which has been mothballed since a devastating fire in 1994.
The remaining $526 million was meant for the 16 MiG-29 jets and six Kamov Ka-31 attack and reconnaissance anti-submarine helicopters that will be deployed on the vessel.
Last year, the Russians arbitrarily raised the price by $1.2 billion, saying the work involved in refurbishment had been grossly underestimated and much more would require to be done before the ship was made seaworthy.
India has hitherto been maintaining that the vessel was purchased on a fixed price contract. There now seems to be a paradigm shift in thinking, with the defence ministry official agreeing with the Russian assessment.
“When the engineers went in, they realised a lot more work would have to be done, particularly in the cabling, which would have to be almost entirely replaced,” he pointed out.
“It was also discovered that the ship would have to undergo extensive sea trials after the refit and this alone would cost crores (millions) of rupees,” the official added.
Asked why the sea trials had not been factored into the original contract, the official admitted to tardiness in the negotiations.
“Yes, they were sketchy but we have to accept that and move ahead,” the official maintained.
It is to discuss these and other matters that Defence Secretary Vijay Singh will be leading a high-powered delegation to Moscow on Feb 19. The team will include Secretary (Defence Production) Pradeep and senior officers of the Indian Navy and the defence ministry.
Singh, it is learnt, will visit the Russian shipyard where the Vikramaditya is being refurbished to study whether adequate manpower is available for the job.
This issue has arisen because of reports that the shipyard has transferred the bulk of its workforce to a new nuclear-powered submarine it is building.
Singh and his team will also spend a few days in Moscow for price negotiations with their Russian counterparts.
Defence Minister A.K. Antony had raised the price issue with his Russian counterpart Anatoly Serdyukov during his visit to Moscow last October. Two teams, one from the Indian Navy and another from the defence ministry, were then set up to discuss the issue further.
The vessel was originally scheduled for delivery in late 2007 or early 2008. This was then pushed back to 2012. Even now, there is no certainty as to when the ship would arrive.
“Assuming the negotiations are completed by the end of this year, the refit will take three years from that, followed by a year of sea trials,” the defence ministry official explained.