Gorshkov: India to make Russia pay for further delay

With clear indications from Russia that the Gorshkov aircraft carrier is again likely to face a delay of more than six months after it suffered boiler damage during recent sea trials, India has decided to impose penalties on the shipyard for exceeding the delivery deadline.

While talks on the aircraft carrier project will be one of the key points during the bilateral defence minister level dialogue on Wednesday, there is little mood for leeway to be given beyond the "grace period" of three months from the date of promised delivery in this case December this year.

Any delay beyond that could attract a heavy penalty that would range from 0.5 per cent of the cost of refurbishing the aircraft carrier to a maximum of 5 per cent of the cost. The penalty will increase with the number of months that the project is delayed by. "The damages can be charged to upto 5 per cent of the cost of the project," a senior Defence Ministry official said.

With the total cost of refurbishing the carrier coming to $2.34 billion, this would translate into a major penalty for the Sevmash shipyard that is already in financial trouble and had recently put in more workers to speed up the delivery of the aircraft carrier.

As reported, an engine malfunction that emerged during high speed trials of the aircraft carrier in the Barents Sea will delay the delivery of the warship to the Indian Navy. The aircraft carrier, is currently undergoing extensive trials with a Russian and Indian crew on board.

The unexpected delay came at a particularly embarrassing time for Russia as bilateral military talks are scheduled for this week where the issue will be discussed. The aircraft carrier has had a troubled past starting with 2008 when Russia informed India that it will not be able to deliver the warship as per a 2004 contract due to miscalculations in the cost of refit. The price of the ship was then escalated to $2.34 billion with Russia promising to deliver it by 2012.

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