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Indian officials to visit Russia for final Gorshkov deal

Russian aircraft carrier Admiral Gorshkov. A file photo.

NEW DELHI (PTI): The government has decided to now speed up renegotiation with Russia for the Admiral Gorshkov aircraft carrier refit project and has scheduled three visits by officials to seal the deal by July-end to allow the ship to join the Indian Navy in the next three years.

These visits by top Defence Ministry and Navy officials have been planned after a recent trip undertaken by Defence Secretary Vijay Singh to Moscow failed to break the deadlock in negotiations on the Russian demand for an additional USD 2 billion for the warship, official sources said here on Tuesday.

A senior official of the Controller of Warship Production and Acquisition left for Russia on Monday to work out the "item-by-item" cost of the refit project for Admiral Gorshkov, which India bought in January 2004 for USD 1.5 billion, of which USD 964 million was for the warship and the rest for the onboard 16 MiG-29K fighter aircraft.

The sources said the Defence Secretary would lead a team to Moscow from June 1 to hold talks on the whole gamut of Indo-Russian defence relations and, in particular the Gorshkov deal.

Another senior official of the Controller of Warship Production and Acquisition will visit Russia in the middle of June to work out the warships trials in Barents Sea in 2011, they said.

The visits by the three Indian teams, the sources said, were aimed at resolving the bitter wrangling between the two sides over the cost issue of the aircraft carrier. Once the deal is worked out, the new price for the Gorshkov refit would have to go to the Cabinet Committee on Security (CCS) for approval.

The CCS, had in December last given a nod to the Defence Ministry to renegotiate the original refit cost, the sources said.

The Indian Navy had renamed the warship, which is currently under refit at the Russian Sevmash shipyard, as 'INS Vikramaditya' in 2004 and later paid up an initial USD 500 million to the shipyard for the refit work.

Though Russia had made its first demand for increased cost of USD 1.2 billion in 2007 over the contracted price of USD 964 million, India was reluctant to renegotiate the deal till December last, when the CCS nod came.

But to the surprise of New Delhi, the Russians increased their demand to USD 2 billion in February this year, thereby bringing the total cost of the warship alone to over USD 2.9 billion.

The navy is hopeful that the 44,570-tonne warship will be delivered by the end of 2012 to allow it to operate two carrier-battle groups by 2015.

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