India agrees to allocate extra funds for 'Gorshkov' refitting

Vinay Shukla
Moscow, Jun 1 (PTI) India and Russia have finalised a
new price for the aircraft carrier 'Admiral Gorshkov' after
months of protracted negotiations and the refitted warship
would be delivered to the Indian Navy by 2012, top Russian
officials said Monday.

"New Delhi has agreed to allocate extra funds for the

carrier which would be delivered to the Indian Navy in 2012,
four years behind schedule," they said.

Though the officials did not spell out the new price
for the carrier, they said India has agreed to release extra
funds for the upgradation works on the Kiev class carrier
after an assessment by a naval team led by Rear Admiral P K
Nair and a group of Russian experts of contractors and
vendors.

The new deal could be tied up later this week after
Indian Defence Secretary Vijay Singh's negotiations with his
Russian counterpart. Singh has been sent to Moscow by the
Defence Minister A K Antony, reflecting the new government's
resolve to speed up all defence purchases.

Any fresh deal worked out would have to have the
concurrence of the Cabinet Committee of Security (CCS).

"The negotiations were successful," Sevmash CEO
Nikolai Kalistratov was quoted as saying by ITAR-TASS, without
giving details of the exact figures involved.

The two sides have also signed a revised schedule of
all types of pre-delivery trials of the upgraded aircraft
carrier in 2011-2012.

"Allocation of extra funds agreed by India would allow
to increase the strength of workforce on the vessel to 2,500
to intensify its upgradation," Kalistratov said.

Under the USD 1.5 billion package deal signed in 2004,
Russia was to upgrade the vessel for USD 974 million.

Later citing the cost escalation due to additional
work required and depreciation of dollar value, Moscow
demanded extra USD 2.2 billion to complete the refit of the
carrier to be inducted into the navy as INS Vikramaditya. This
would have pegged the price of the carrier at a whopping USD
3.7 billion.

However, Indian sources have said in New Delhi earlier
that a fresh deal could be tied up on payment of upto USD 1
billion extra. PTI VS
AM
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