India reiterates old blah on Gorshkov deal
05 Aug 2009
New Delhi: Commenting on the long-simmering Gorshkov aircraft carrier price issue, state minister of defence, MM Pallam Raju, has said that negotiations were on with Russia and India expected to reach a "reasonable decision" on the issue soon.
"Negotiations are going on regarding the increased price and I think we will reach to a reasonable decision on that soon," Raju told reporters on the sidelines of a presentation to the members of parliament on the Territorial Army (TA).
Justifying the negotiation, the minister pointed out that the Indian Navy needed three aircraft carriers at any given point of time and the government would go ahead and procure whatever was available.
"According to Navy's maritime preparedness plans, we are very clear that we need three aircraft carriers at any given time and I think Gorshkov is the thing we are pursuing", he added.
Russia has thrice raised the price of the Adm. Gorshkov aircraft carrier, over and above the $1.6 billion price negotiated under the original deal in 2004. About $974 million was set aside for the refit of the derelict carrier, and the remaining for the purchase of MiG-29K carrier-borne fighters.
The carrier was originally meant to be delivered to the Indian Navy by 2008. The earliest delivery date being looked at now is 2012. The Russians are now demanding $2.9 billion for the 44,570-tonne ship - a near doubling of its original price.
The Gorshkov affair is only the most visible symptom of a gradual and deepening decay in the defence and security relationship that both nations shared for a long time. All defence contracts are now being garnered by nations other than Russia, which is depending on legacy contracts to maintain its presence in the Indian market.