15:2906/08/2009
MOSCOW, August 6 (RIA Novosti) - Russia is hoping to reach an agreement with India in August on an additional $1.2 billion to finalize the overhaul of the Admiral Gorshkov aircraft carrier for the Indian Navy, a Russian newspaper said on Thursday.
The next round of talks to determine the final funding amount for the carrier's repair and modernization is due to take place in India within the next few days.
According to Nezavisimaya Gazeta newspaper, India has no alternative but to allocate the required $1.2 bln, despite recent objections from the government's accounting office.
The Indian Navy desperately needs to replace its INS Viraat, which, although currently operational, is now 50 years old.
Under the original $1.5 billion 2004 contract between Russia's state-run arms exporter Rosoboronexport and the Indian Navy, which includes delivery of MiG-29K Fulcrum carrier-based fighters, the work on the aircraft carrier was to have been completed in 2008.
However, Russia later claimed it had underestimated the scale and the cost of the modernization, and asked for an additional $1.2 billion, which New Delhi said was "exorbitant."
After long-running delays and disputes, India offered in February 2008 to raise the refit costs for the aircraft carrier, docked at the Sevmash shipyard in northern Russia for the past 12 years, by up to $600 million.
Russia said it was not satisfied with the proposed amount and the issue of the additional funding remains unresolved.
The Times of India newspaper said earlier that the deal had been criticized by India's Comptroller and Auditor General (CAG) that called the ship "junk" in a July report.
"It can be seen that the Indian Navy was acquiring a second-hand refitted aircraft carrier that had half the life span of and was 60 percent more expensive that a new one," said the report.
However, Indian defense minister's aide Pallam Raji has recently said the Indian authorities are ready to consider Russia's proposal to raise the price of the deal by $1.2billion.
Konstantin Makiyenko, deputy director of the Center for Strategic Analysis, a Moscow based think tank, has said that the Indian government will most likely agree on the new deal considering that China has launched an ambitious aircraft carrier construction program.
He reiterated that India's only aircraft carrier - INS Viraat - will be decommissioned in the next few years, while construction of its own aircraft carrier would take much longer than the remaining overhaul of the Russian warship.
"Basically, India does not have an alternative but to agree [on the deal]," he said.
Russia has pledged to finish the Admiral Gorshkov's overhaul as soon as possible and deliver it to India in 2012 if the additional $1.2 bln funding is provided by New Delhi.
After modernization, the carrier will join the Indian Navy as INS Vikramaditya, and is expected to be seaworthy for 30 years.
Admiral Gorshkov is a modified Kiev class aircraft carrier, originally named Baku.
The ship was laid down in 1978 at the Nikolayev South shipyard in Ukraine, launched in 1982, and commissioned with the Soviet Navy in 1987.
It was renamed after the collapse of the Soviet Union in 1991.
In 1994, following a boiler room explosion, the Admiral Gorshkov sat in dock for a year for repairs. After a brief return to service in 1995, she was finally withdrawn from service in 1996 and put up for sale.
The ship's displacement is 45,000 tons. It has maximum speed of 32 knots and an endurance of 13,500 nautical miles (25,000 km) at a cruising speed of 18 knots.
According to Nezavisimaya Gazeta newspaper, India has no alternative but to allocate the required $1.2 bln, despite recent objections from the government's accounting office.
The Indian Navy desperately needs to replace its INS Viraat, which, although currently operational, is now 50 years old.
Under the original $1.5 billion 2004 contract between Russia's state-run arms exporter Rosoboronexport and the Indian Navy, which includes delivery of MiG-29K Fulcrum carrier-based fighters, the work on the aircraft carrier was to have been completed in 2008.
However, Russia later claimed it had underestimated the scale and the cost of the modernization, and asked for an additional $1.2 billion, which New Delhi said was "exorbitant."
After long-running delays and disputes, India offered in February 2008 to raise the refit costs for the aircraft carrier, docked at the Sevmash shipyard in northern Russia for the past 12 years, by up to $600 million.
Russia said it was not satisfied with the proposed amount and the issue of the additional funding remains unresolved.
The Times of India newspaper said earlier that the deal had been criticized by India's Comptroller and Auditor General (CAG) that called the ship "junk" in a July report.
"It can be seen that the Indian Navy was acquiring a second-hand refitted aircraft carrier that had half the life span of and was 60 percent more expensive that a new one," said the report.
However, Indian defense minister's aide Pallam Raji has recently said the Indian authorities are ready to consider Russia's proposal to raise the price of the deal by $1.2billion.
Konstantin Makiyenko, deputy director of the Center for Strategic Analysis, a Moscow based think tank, has said that the Indian government will most likely agree on the new deal considering that China has launched an ambitious aircraft carrier construction program.
He reiterated that India's only aircraft carrier - INS Viraat - will be decommissioned in the next few years, while construction of its own aircraft carrier would take much longer than the remaining overhaul of the Russian warship.
"Basically, India does not have an alternative but to agree [on the deal]," he said.
Russia has pledged to finish the Admiral Gorshkov's overhaul as soon as possible and deliver it to India in 2012 if the additional $1.2 bln funding is provided by New Delhi.
After modernization, the carrier will join the Indian Navy as INS Vikramaditya, and is expected to be seaworthy for 30 years.
Admiral Gorshkov is a modified Kiev class aircraft carrier, originally named Baku.
The ship was laid down in 1978 at the Nikolayev South shipyard in Ukraine, launched in 1982, and commissioned with the Soviet Navy in 1987.
It was renamed after the collapse of the Soviet Union in 1991.
In 1994, following a boiler room explosion, the Admiral Gorshkov sat in dock for a year for repairs. After a brief return to service in 1995, she was finally withdrawn from service in 1996 and put up for sale.
The ship's displacement is 45,000 tons. It has maximum speed of 32 knots and an endurance of 13,500 nautical miles (25,000 km) at a cruising speed of 18 knots.
source: http://en.rian.ru/mlitary_news/20090806/155743529.html
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