The Hindu : National : Admiral Gorshkov deal to be finalised
NEW DELHI: The long-pending deal to finalise the price tag on aircraft carrier INS Vikramaditya (Admiral Gorshkov) could soon be taken up by the government as the Defence Ministry prepares to take the case to the Cabinet Committee on Security (CCS).
With Russian Prime Minister Vladimir Putin scheduled to visit India early this month, the Defence Ministry has forwarded relevant papers for clearance by the Finance Ministry.
Once the Finance Ministry gives the go-ahead, we will place the issue before the Cabinet Committee on Security, Defence Ministry officials told The Hindu.
Defence Minister A.K. Antony had recently said that his Ministry would not take proposals to the CCS that were not backed by the Finance Ministry.
That the Centre had finalised a price was announced last year during Prime Minister Manmohan Singhs visit to Russia, but the negotiations concluded towards the end of December 2009.
The contract negotiation committee gave its final verdict on the acquisition of the aircraft carrier, which is currently undergoing repairs and refit at the Sevmash shipyard in Russia. The initial agreement of $974 million went up to $1.5 billion to include 16 MiG-29K aircraft for the carrier. The Russians increased the demand from $2.2 billion to $2.9 billion, even as the Comptroller and Auditor-General made critical observations regarding the deal.
Sea trials cost
One of the reasons for price escalation was the cost of sea trials, which, according to the report, was originally contracted at $27 million but shot up to $522 million. The trials themselves are expected to take approximately 35 months against the planned 19 months.
According to sources in the Navy, the cost of sea trials was not a factor during the erstwhile Soviet Russia days, but with the increasing commercial nature of the deal, these costs added up. The sources also denied reports that the duration of the trials could be reduced to slash cost.
As per the revised master schedule submitted by the Russian side, the harbour trials are scheduled to commence by March next year and will be followed by sea and aviation trials. The delivery of the ship is scheduled for December 2012.
The first of the four MiG-29K aircraft were inducted into the Navy on February 19 at Goa. In the absence of the carrier, the Navy has built a ski-jump facility on the shore to enable its pilots carry out practice sorties.
During Mr. Putins visit, the other defence deals on the anvil include an additional 29 MiG-29K aircraft, further agreements on the Fifth Generation Fighter Aircraft being developed jointly by both countries, and work on the Multi Role Transport Aircraft.