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India-Russia talks on INS Vikramaditya to continue next month news
25 February 2008

INS Vikramaditya (ex-Adm Gorshkov)Moscow: India and Russia may have moved some way towards settling the cost escalation issue on the aircraft carrier INS Vikramaditya (ex-Admiral Gorshkov) during the course of a visit of a high-level Indian defence delegation to Moscow. Reports in the Russian media suggest that though some progress may have been made, discussions are likely to continue next month.

The Indian delegation, led by defence secretary, Vijay Singh, also made an inspection visit to the carrier to physically verify the additional refit work that is required to be done on the carrier, as claimed by Moscow.

The five-day visit of the delegation concluded on Sunday.

In his talks with Russian energy and industries minister, Viktor Khristenko, and other senior officials, Singh was apparently assured that Moscow was making great efforts to contain the situation.

The Russians claim that a lot of extra work and resources were required by the Sevmash Shipyard that was handling the refit contract and that new technical parameters had resulted in cost escalations, which exceeded the initial $700 million agreed upon in the initial contract.

According to reports, the Indian side has agreed with the Russian assessment and may now be willing to fork out the extra sums being asked for.
As per the original contract signed in 2004, the 45,000 tonne displacement carrier was to be delivered by August this year. However, the Russians have expressed their inability to deliver the ship on the original financial terms, and time schedule, and are now demanding an additional $1.2 billion for completing the refit. 

The delivery period has also been extended into the 2012-13 time frame.

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India-Russia talks on INS Vikramaditya to continue next month