By IANS
New Delhi : The Indian Navy Monday argued against reworking a $1.5 billion deal for a Russian aircraft carrier it has purchased, saying the additional $1.2 billion Moscow has demanded violates the terms of the contract – even though some additional money might eventually have to be paid.
“The government should not get into price re-negotiations (for the carrier Admiral Gorshkov). If today, they reopen the negotiations for Gorshkov, tomorrow all other projects will be reopened,” Indian Navy chief Admiral Sureesh Mehta told reporters here.
“We expect that the fixed price contract (under which the deal was negotiated) should be honoured by the Russian government,” Mehta said, speaking ahead of the Navy Week celebrations beginning Tuesday.
At the same time, he admitted there would be “complicated negotiations” on the Russian demand and on issues like the penalty clause that has been built into the contract in case delivery of the carrier is delayed.
The ship, re-christened INS Vikramaditya, was originally to have been delivered in late 2007 or early 2008. This has now been pushed back to around 2010-11.
Given the penalties this would attract, Mehta said: “There will be a lot of additions and subtractions and in the end, I personally don’t think we will be paying very much more, if at all anything extra.”
Mehta agreed when asked whether the Gorshkov episode pointed to the need for India to reduce its dependence on Russia for military hardware, which accounts for 70 percent of the inventory of the Indian armed forces.
“There was a different paradigm when we did business with the (erstwhile) Soviet Union. They were the sellers and we were the buyers. After the Soviet Union collapsed, the paradigm changed and both our nations have accepted this.
“Today, there is a conscious feeling emerging that we should not put all our eggs in one basket,” the navy chief maintained, referring to India increasingly looking at countries like Israel and the US for military hardware.
Mehta disagreed with a question as to whether India should pull out of the Gorshkov deal after the new Russian demand.
“Why should we pullout? We have already paid 500 million dollars towards refurbishment (of the ship). We would like to push for delivery without any additional delays but also without any additional (financial) implications,” he contended.
After protracted negotiations, India signed a deal with Russia on Jan 20, 2004 to buy the Gorshkov, along with 12 single-seat MiG-29 fighters and four twin-seat MiG-29 trainers.
Of the contracted amount, approximately $800 million was to be spent on upgrading and refitting the ship and $700 million on the 16 MiG-29 jets and six Kamov Ka-31 attack and reconnaissance anti-submarine helicopters.
However, two developments at the Russian shipyard where the vessel is being refurbished have delayed the re-commissioning of the ship, which has been mothballed since 1996.
The first was the realisation that the work involved in refurbishment had been grossly underestimated and much more would require to be done before the carrier was made seaworthy again.
The second was that the shipyard had transferred the bulk of the workforce engaged on the carrier to a new nuclear-powered submarine it has begun constructing.
Indian Defence Minister A.K. Antony had raised the issue during his visit to Moscow in October, both at his meeting with his Russian counterpart Anatoly Serdyukov and at the seventh meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation (IRIGC) that the two ministers co-chaired.
It was then decided to set up an apex level committee under the defence secretary and a steering committee under an Indian Navy vice-admiral to supervise the work involved.
The Russian demand for more money has only served to further complicate matters but given the navy chief’s optimism, there seems to be light at the end of the tunnel.