India releases $102 mn more for Gorshkov

NEW DELHI: India has given an additional $102 million to Russia for the aircraft carrier Admiral Gorshkov ahead of fresh negotiations before July
end between the two countries on the final purchase price of

the warship, a senior official said on Thursday.
An Indian team was in Russia last week to break the deadlock over the cost escalation of the aircraft carrier.

"Gorshkov by far is the most problematic of the deals with Russia. But by July 15 we will work out the scope of trials and a firm cost based on which a fresh contract will be signed. We are insisting and hopeful that the platform will be delivered by the end of 2012," a senior defence ministry official said requesting anonymity.

"In the last one-and-a-half years they have done a lot of work on the aircraft carrier and we have also released $102 million last week," he added.

The deal for 45,000 tonne Kiev class Gorshkov, to be inducted in the Indian Navy as INS Vikramaditya, was signed in 2004 for approximately $948 million. However, the project hit the headlines in 2007 as the delivery date was pushed back and the Russians increased the price.

With the latest installment of payment, India has paid nearly $602 million to Moscow so far for the refurbishment of the Gorshkov, an aircraft carrier which has not been seaworthy after 1988. According to the official, Gorshkov, currently undergoing refit at Sevmash shipyard in Russia, is floating and will be towed into the sea by the year end.

According to the senior officials involved in the negotiations with Russia, the quoted price of the aircraft carrier has fluctuated between $2.2 billion and $2.9 billion and Moscow may come around to the lower price to accomodate New Delhi.

The two sides have been carrying on negotiations on the price issue for over a year with India not keen to pay what it considers unreasonable escalation that has nearly doubled the cost of the aircraft carrier.

The dramatic cost escalation has threatened to cast a shadow on the long-standing defence ties between India and Russia.

Besides this the basic training for the first batch of the Indian Navy pilots for MiG-29 aircrafts which will be operated from the deck of Gorshkov has been completed.

"The basic training of the first batch of the Indian Navy pilots has been completed. The second batch will undergo training from September," the official added.

The decision on the purchase of more MiG-29 aircrafts will be taken following the approval of the cabinet.