Russian shipbuilders ask for $100 million to complete frigates for India

[aimarraul]

Russian shipbuilders ask for $100 million to complete frigates for India10:38 16/12/2010

MOSCOW, December 16 (RIA Novosti) - Russian shipbuilding plant Yantar has asked Russia's state arms exporter, Rosoboronexport, for an additional $100 million to conclude the construction of three frigates for the Indian Navy, Russian business daily Kommersant said on Thursday.

A $1.6-billion contract on the construction of the ships was signed in summer 2006. Although the ships were scheduled for completion by 2011-2012, a lack of funds has delayed construction, the paper said.

"The lack of funding is linked to the VAT refund problem: we will only receive [the money] after the frigates have been supplied to India," Igor Orlov, the director general of the Kaliningrad-based plant, told the paper.

A source close to Rosoboronexport told Kommersant the Indian side was aware of the issue and was treating it "with understanding."

"We are not considering increasing the contract price for India," the source said. "We propose the problem be settled using domestic reserves, including those of the United Shipbuilding Corporation."

This is the second time Russia has run into difficulties with Indian contracts. The price of the Admiral Gorshkov aircraft carrier has been raised almost twice, and its supply date was put back from 2008 to late 2012.

 

[Bose-the great]

Lol is $100 Million as big amount of money...
Don't worry the'll get how much they want..
No need to get happy CD

 

[RPK]

We are not considering increasing the contract price for India," the source said. "We propose the problem be settled using domestic reserves, including those of the United Shipbuilding Corporation."

Sums up all

 

[cybertron]

these are some worrying facts.
Most of the contracts awarded to russia are getting delayed.
I hope both countries come to some understanding on future contracts so that theirs no bottleneck during the building process and the project doest get stalled due lack of funds.

 

[SpArK]

Russian shipbuilders ask for $100 million to complete frigates for India​

Russian shipbuilding plant Yantar has asked Russia's state arms exporter, Rosoboronexport, for an additional $100 million to complete construction of three frigates for the Indian Navy, Russian business daily Kommersant said on Thursday.


A $1.6-billion contract on the construction of the ships was signed in summer 2006. Although the ships were scheduled for completion by 2011-2012, a lack of funds has delayed construction, the paper said.


"The lack of funding is linked to the VAT refund problem: we will only receive [the money] after the frigates have been supplied to India," Igor Orlov, the director general of the Kaliningrad-based plant, told the paper.


A source close to Rosoboronexport told Kommersant the Indian side was aware of the issue and was treating it "with understanding."
"We are not considering increasing the contract price for India," the source said. "We propose the problem be settled using domestic reserves, including those of the United Shipbuilding Corporation."


Russian shipyards have struggled to complete Indian naval contracts on time and budget on several occasions. The price of a refit for the the Admiral Gorshkov aircraft carrier has been almost doubled, and its completion date was put back from 2008 to late 2012.

MOSCOW, December 16 (RIA Novosti)

 

[johnny boy]

that money shud be asked from the russian agency and not from india....although i dont mind paying!!!!!!!!!!!!!

 

[SpArK]

that money shud be asked from the russian agency and not from india....although i dont mind paying!!!!!!!!!!!!!

Advance a few money instead of paying at completition.. it works wonders on a speedy production, for cash strapped ship building companies, which have to find funds locally.

 

[Markus]

Advance a few money instead of paying at completition.. it works wonders on a speedy production, for cash strapped ship building companies, which have to find funds locally.

DO not fall for all of the looney excuses that defence manufacturers dole out to their customers. Many times its just an attempt to extract more money.

 

[SpArK]

Teg, Tarkash and Trikand ...follow ons to the Talwar-class frigates already in service. The follow-on deal was signed in 2006.. now its expected by 2011-12

 

[SpArK]

DO not fall for all of the looney excuses that defence manufacturers dole out to their customers. Many times its just an attempt to extract more money.

Well where in the news have they said they need extra money??

Its all included in the $1.6 B contract.. All they ask is a little out of it to find funds..

Everybody is cash strapped including EU as evident with EF campaign, French and even US.

Russia has a big modernization going on... hence they asked, nothing more.

 

[Markus]

Well where in the news have they said they need extra money??

Its all included in the $1.6 B contract.. All they ask is a little out of it to find funds..

Everybody is cash strapped including EU as evident with EF campaign, French and even US.

Russia has a big modernization going on... hence they asked, nothing more.

I was referring to the defence industry in general.

 

[SQ8]

Advance a few money instead of paying at completition.. it works wonders on a speedy production, for cash strapped ship building companies, which have to find funds locally.

Here's the problem.. you paid in advance.. but the finished product is not upto your specifications.. now what?
With the payment on delivery option..you ensure quality.. you like what you get.. you keep it..
else that shipyard is going to be stuck with three ships that nobody wants.
Take the greek example on the U214's..
(although it may have been simply the greeks not wanting to pay up)

Another approach with continuous inspection of the product and then payments on completed milestones is also good.

 

[SpArK]

Here's the problem.. you paid in advance.. but the finished product is not upto your specifications.. now what?
With the payment on delivery option..you ensure quality.. you like what you get.. you keep it..
else that shipyard is going to be stuck with three ships that nobody wants.
Take the greek example on the U214's..
(although it may have been simply the greeks not wanting to pay up)

Another approach with continuous inspection of the product and then payments on completed milestones is also good.

That scenario never happened with us..

I dont think even after completition of frigates and its not upto mark and we havent paid any advance on it.. we cant just walk away saying , we dont like it.

 

[Markus]

Here's the problem.. you paid in advance.. but the finished product is not upto your specifications.. now what?
With the payment on delivery option..you ensure quality.. you like what you get.. you keep it..
else that shipyard is going to be stuck with three ships that nobody wants.
Take the greek example on the U214's..
(although it may have been simply the greeks not wanting to pay up)

Another approach with continuous inspection of the product and then payments on completed milestones is also good.

If the manufacturer dosen't make products as per the customers requirements then that will be his last order.

No company would do that to India, the highest weapons importer in the world, they would love for orders to keep coming.

 

[SpArK]

Shipyard Yantar