India, Russia finally agree on Admiral Gorshkov price issue

New Delhi, Dec.6 : India and Russia have reportedly reached a final agreement on the sale of the Russian-manufactured aircraft carrier Admiral Gorshkov or the INS Vikramaditya.

According to top government sources, both countries have mutually reached an agreement and that a 'satisfactory price tag has been agreed upon.

The pricing of Admiral Gorshkov, which Russia is refurbishing, has become a diplomatic tug of war between India and China.

Sources said that the Admiral Gorshkov was festering wound which is being healed and a deal will be inked in the next few days

Initially, Russia had asked India to pay under a billion US dollars, but eventually the cost inflated up to 2.9 billion dollars, which is almost three times the original cost.

In fact, the Comptroller and Auditor General (CAG) of India, in its report, had even censured the Government of India for paying the extra price for the carrier which is to be delivered by 2012.

Negotiations over the final pricing have been going on for quite some time, and both sides have finally arrived at a figure of 2.6 billion US dollars, the sources said.

The purchase of Admiral Gorshkov aircraft was finalized during the visit of the then Russian Defense Minister to India in January 2004.

The CAG's recent report observed that the second-hand carrier would be 60 percent more costly than a new one and that there is a risk of further delay in its delivery.

The original deal signed in 2004, asked India to pay 1.5 billion dollars for the vessel, of this, 948 million dollars was to be spent on refitting the 45,000 tonne vessel and the balance was to be used for purchasing MiG-29 combat jets and Kamov anti-submarine warfare helicopters to be deployed on the ship.

The CAG report also pointed out that the carrier would have limited operational capabilities and certain key capabilities which would enable it to meet potential threats or challenges had either not been provided for or have been postponed to a later date.

The report said that the anti-aircraft missile complex selected to be fitted in the ship failed during the trials and the refurbishment contract was concluded without the missile system.

The CAG also expressed its concern over the ship not having a Close-In Weapon System (CIWS) which is a vital shipboard weapon for detecting and destroying incoming anti-ship missiles and enemy aircraft at short range until her first refit in India in 2017.

The carrier was earlier scheduled to have been delivered in 2008.