more negotiations:
Def Secy to visit Russia to break deadlock over Gorshkov price
New Delhi, May 01: India is sending its Defence Secretary Vijay Singh to Russia on Sunday to break a deadlock over Moscow's hiked price of USD 2.9 billion for the Admiral Gorshkov aircraft carrier.
During the three-day visit, Singh is likely to meet his counterpart in Moscow, apart from negotiating with officials from the Sevmash Shipyard, where the aircraft carrier is currently undergoing refit and repair, sources said here today.
The deal was initially signed for a price of USD 974 million in January 2004. Thereafter Russia hiked it to USD 2.1 billion in 2007 and further increased it to USD 2.9 billion in February this year.
The negotiations came a cropper this February, hitting India's efforts to induct the warship into its fleet by 2012.
The Russian decision to seek USD 700 million had been conveyed to India on February 10 during a bilateral meeting to re-negotiate the Russian demand for additional payment for the 44,500-tonne warship.
The Sevmash Shipyard was also stressing on an immediate release of USD 190 million for continuing the repair work, which had slowed down due to the fresh price negotiations.
Russia had informed that a final total price of $ 2.9 billion would be agreeable to it, but India, which has already paid $ 500 million for Admiral Gorshkov, had balked over such a high demand that could push the cost of the warship to three times its contracted price.
The warship, rechristened by India as INS Vikramaditya, was originally planned for delivery this year, but the demand for more payments by Russia had led to the delivery schedule being pushed to 2012.
India had till December last held that it needed time to consider the issue. However, the Cabinet Committee on Security that month gave its approval to renegotiate the deal.
It was agreed by both sides, during the then state visit of Russian President Dmitrey Medvedev, that the revised price should be finalised by March 2009.
The Russians had first made the demand for additional payment of USD 1.2 billion for the warship in November 2007, pushing the cost of the aircraft carrier to USD 2.1 billion.
The revised offer of USD 2.9 billion did come as a surprise for India, which was expecting Moscow to agree on a middle-ground on its earlier proposal for USD 2.1 billion.
The Navy was hoping that the first sea trails of the Gorshkov would be carried out in early 2010, but if the negotiations are further delayed, then the sea trials schedule could be pushed back further.