Russian shipyard building Indian frigates runs out of funds

Kaliningrad: Yet another Indo-Russian project is skirting with danger with the Russian Yantar shipyard negotiating a $60 million loan to enable it to complete the construction of three stealth frigates for the Indian Navy. This was revealed by the company director on Wednesday.

The Yantar shipyard is building three Project 1135.6 Krivak IV class guided missile frigates for the Indian Navy under a $1.6 billion contract signed in July 2006. This was a follow-on order to three Krivak-III/INS Talwar class frigates, which had earlier been supplied by another shipyard after prolonged delays.

Company director, Igor Orlov, said the shipyard had previously taken out a $110 million loan but was now forced to seek an additional $60 million loan due to "financial constraints." The problem he said occurred because of fluctuations in the ruble-to-dollar exchange rate, which caused a loss of about 500 million rubles to the shipyard.

The shipyard has assured India of its commitment to deliver all three frigates by 2012.

The shipyard has stated earlier that the first ship would be floated out this year, the second, in spring 2010, and the third a bit later. The shipyard has also praised the Indian government in the past for providing adequate and timely financing.

The shipyard has stated that a delegation of Indian military officials, led by India's deputy chief of the naval staff, vice admiral Raman P Suthan, visited the Yantar shipyard last October and was satisfied with the pace and the construction quality.

All of the new frigates will be armed with eight BrahMos supersonic anti-ship cruise missile systems and not the Club-N/3M54TE missile system, which was installed on previous frigates.

The Krivak class frigate has deadweight of 4,000 metric tons and a speed of 30 knots, and is capable of accomplishing a wide range of maritime missions, primarily hunting down and destroying large surface ships and submarines.