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The stand-off between India and Russia over the cost escalation of Admiral Gorshkov has finally been sorted out. After three recent Indian delegations’ visit to Russia, both countries have agreed on a final price of $2.2 billion for the refitting of Admiral Gorshkov.
The new contract for repair and re-equipping of Gorshkov (rechristened INS Vikramaditya) will be one of the first big defence procurements to be cleared by the newly re-elected government.
Sources indicate that India has managed to save the $600 million that was demanded by Russia for sea-trials in Barent’s Sea in 2011-2012. As of now, the trials will still be held in Russia. However, besides training of Indian pilots for MiG-29K takeoffs and landings from Russian carrier Admiral Kuznetsov, some will now be conducted in Indian waters to cut costs.
The Gorshkov saga began in the 1990s when Russia offered the used aircraft carrier to India as a gift on the condition that India paid for the refits of the aircraft as well as the MiGs that will take-off from the ship.
The $1.5-billion contract was signed finally in January 2004, with the carrier refit costing $974 million and the rest for 16 MiG-29Ks. Gorshkov was to be delivered by August 2008. However in 2007, Russia demanded another $1.2 billion for Gorshkov’s refit in addition to the initial $974 million, apart from pushing back its delivery to December 2012. While India agreed on this after vexed interactions, Russia again caused another setback by demanding $2 billion more for refit.
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