This Article is From Mar 10, 2010

Gorshkov to cost 2.3 billion after years of negotiation

Gorshkov to cost 2.3 billion after years of negotiation
New Delhi: After a three-year long renegotiation, the fresh price of Admiral Gorshkov aircraft carrier was finalised at USD 2.35 billion on Wednesday by the government, a day ahead of Russian Prime Minister Vladimir Putin's two-day visit to India.

"The Cabinet Committee on Security (CCS), which met here, has given its approval to the fresh price for Gorshkov," a Defence Ministry official said here.

India and Russia are likely to conclude the fresh contract for the aircraft carrier, bought by the Navy in 2004 and rechristened INS Vikramaditya, during Putin's stay in the capital.

The warship, purchased originally at a price of USD 974 million, is currently undergoing a refit at the Russian Sevmash shipyard.

Since 2007, the shipyard sought a hike in the price for the warship's refit programme and had revised the cost of the project twice to demand USD 2.9 billion.

However, India had conveyed that it would not go beyond USD 2.2 billion as a revised price for the project.

After renegotiation of the price for three-long years, the two sides finally arrived at a figure for the refit programme six months ago, but it had to go to the CCS for a final stamp of approval, which it received on Wednesday.

Along with the warship, India had also bought 16 MiG-29K naval fighter aircraft for USD 526 million. The first four of these fighters were delivered to India on December 4 last and were inducted into the Navy on February 18 this year.

The delivery of Gorshkov, which was originally scheduled for December 2008, has already witnessed a delay due to the price negotiations for the refit project and India had to push the Sevmash shipyard to hasten the programme for rescheduled delivery in 2013.

During Putin's visit, the two sides are also expected to sign a few more defense deals worth USD four billion, including the final agreement for joint manufacture of fifth generation fighters, additional MiG-29K fighters for USD 1.2 billion and joint development of a multirole transport aircraft.

India is also expected to place orders for 40 more Sukhoi Su-30MKI multi-role fighters for the Indian Air Force.
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