Gorshkov: Medvedev on his way, Centre okays price renegotiation
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On the eve of Russian President Dmitry Medvedev's visit to India, the Cabinet Committee on Security (CCS) on Tuesday gave in to Moscow's demands and gave the go-ahead to the Defence Ministry to renegotiate the price for aircraft carrier Admiral Gorshkov. The Russians had been demanding upwards of $2.2 billion for overhauling the 44,500 tonne warship that was commissioned into the erstwhile Soviet Union Navy in 1978. The reworked purchase agreement will be signed in the next three months and the ship is expected in India in 2012.
Top Government sources said the CCS finally decided in favour of purchasing Admiral Gorshkov as it was the best option available to New Delhi with more than 65 per cent of Indian Navy made up of Russian built frigates, destroyers and submarines. Further, any friction with the Russians on the Gorshkov issue could also jeopardise future military hardware purchases, including the Akula-class nuclear submarine. The fact that the Chinese Navy is also expanding at a rapid pace also worked in favour of the Russian ship.
The original purchase contract for Admiral Gorshkov and a complement of MiG-29 K jets was signed on January 20, 2004 by the NDA Government at a cost of $974 million.
The CCS mandated the Defence Ministry to renegotiate and freeze the contract as New Delhi has already paid $500 million to the Sevmash shipyard for the ship and there was no way that Indian shipyards could handle the upgradation of the warship with integration of weapons platforms and radars. It was due to this factor that the Government set aside the option of cancelling the contract. This decision would be conveyed to the Russian President Medvedev when he arrives in India for summit level talks with Prime Minister Manmohan Singh during December 4-6.