The Hindu : Front Page : It will be $.2.9 billion for Gorshkov

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Monday, Jul 20, 2009
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It will be $.2.9 billion for Gorshkov

K.V. Prasad

It is a government-to-government engagement: Defence Ministry sources
Aircraft carrier expected to be handed over by the end of 2012

NEW DELHI: India is all set to finalise the price tag of aircraft carrier INS Vikramaditya (Admiral Gorshkov), which would be closer to the revised demand made by Russia at $2.9 billion.

Authoritative sources in the Ministry of Defence say the figure is likely to be finalised next week when negotiators end discussions.

The Russian negotiators arrived here on July 10 and originally intended to stay till July 17. The team has conveyed that the cost had been calculated as per the standards specified by its government and there was little room to de-escalate the cost, revised from its original price of $1.5 billion. This figure too had been later changed to $2.2 billion.

After the recent visit of Defence Secretary Vijay Singh, New Delhi was hopeful that the price would be closer to $2.2 billion; however, over the past one week, negotiations had moved in a direction that showed it would be closer to the re-revised demand, the sources said.

“Eventually, it must be remembered that this is not a commercial negotiation between a buyer and a seller but a government-to-government engagement. Yet, the negotiations have been arduous,” the sources said.

As per the 2004 contract, the aircraft carrier that is undergoing repairs and refit at the Sevmash shipyard, was to have been delivered last year, but it is now expected to be handed over by the end of 2012. The Russian side was told during Mr. Singh’s visit that the deadline would have to be adhered to. In a related development, Russian President Dmitry Medvedev was quoted as telling the builders, during his visit to the shipyard early this month, to ensure delivery of the aircraft carrier on time.

India has so far paid $602 million as advance to Russia, with a bulk of that amount being released this year.

The final price does not include the 16 MiG29 K deck-jets that India plans to buy for the carrier. Meanwhile, Director of National Maritime Foundation C. Uday Bhaskar told The Hindu, that the deal was important for India-Russia defence cooperation.

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