Russia, India close to resolving Adm. Gorshkov impasse

Dubai: Russia and India are likely to resolve a contentious issue over additional financing for the refit programme of the INS Vikramaditya\Admiral Gorshkov aircraft carrier, according to Russia's state arms exporter Rosoboronexport.

"The negotiations were uneasy but the Indian side treated with understanding the existing problems. They recognized the need to additionally finance the contract and in the near future this will be formalized," Mikhail Zavaliy, Rosoboronexport director for special missions, was quoted as saying at the Dubai Air Show.

Under the original $1.5 billion contract, signed in 2004, Russia was supposed to supply the Indian Navy with a refurbished Admiral Gorshkov (re-designated INS Vikramaditya), as well as supply 16 MiG-29K carrier-based fighters.

Work on the aircraft carrier was to have been completed in 2008, but is now hopelessly behind schedule. Russia claimed it had underestimated the scale and the cost of the modernization, and that additional modifications sought by the Indian Navy only added to the time and money overrun. It asked for an additional $1.2 billion, which was turned down by New Delhi as being "exorbitant."

After a long-running dispute, which even saw all work on the carrier halted for a long period of time, India offered to raise payments by an additional $600 million. This was turned down by the Russians as being inadequate.