India has reconciled itself to a price hike for the procurement of the Russian aircraft carrier Admiral Gorshkov.
?There will be some price hike. We need to pay extra amount and whatever amount is due as per contracts we will pay,? said the naval chief naval chief Sureesh Mehta, who had in the past opposed any renegotiations with Russia on a price hike demand.
His remarks assume significance in the wake of defence minister AK Antony?s statement in Parliament that the expert team had discussed aspects of all additional works projected by the Russian side on the carrier. “The process of examination of the scope and necessity for additional work has been initiated,” the minister said in Lok Sabha.
Recently the defence minister had said that the negotiations with Russia were still going on to work out a new price and delivery schedule for the Gorshkov. ?Negotiations are on between both the sides to find a reasonable solution to the issue,? Antony had said.
Antony’s comment came in the wake of recent remarks by his defence secretary Vijay Singh that the deal was being renegotiated after undertaking an inspection of the carrier being built at a Russian shipyard.
Russians are demanding a staggering $ 1.2 billion more for the carrier over and above the deal price of $ 1.5 billion negotiated in 2001 saying that the carrier would need much more retrofitting than earlier anticipated.
The issue, according to officials has been taken up at the highest level. While, the Russians are demanding $ 1.2 billion dollars, informed sources said the two sides could limit the cost escalation on the warship to between 600-900 million dollars.
The Russian side has conveyed that ?extensive? refit work would be necessary on the warship which will now have to undergo sea trials for a year in Russian waters under their experts. Concurring with Russian estimates, defence secretary Vijay Singh recently said that the warship would need new boilers, extensive re-cabling and more support for its aircraft take-off deck. Even after the deal is renegotiated, it will have to go before the cabinet committee on Security for clearance and the carrier at the earliest is only likely to join Indian naval fleet by 2012. Though the carrier would be delayed, India would start the first batch of MiG-29 by June next year. The carrier would be used by the navy to train its pilots. The Gorshkov with a sea endurance of 30 days and the capacity to carry more than 2,000 sailors and officers, is perceived as a real projector for the country.