Indian Navy Chief Admiral Sureesh Mehta said on Monday that the government should neither pay more money to the Russians for refurbishing aircraft carrier Admiral Gorshkov, nor pull out of the deal. He said that the contact signed by Russia quotes a fixed price and it should be honoured.
Russia has asked for $1.2 billion over and above the contracted price of $1.5 billion, almost doubling the agreed cost.
"It is a fixed price contract and they should honour it,” Admiral Mehta said, while ruling out pulling out of the deal. "The ship is our property. We have paid them almost $500 million already. There is no question of pulling out,” he said.
Admiral Mehta said Russia’s attitude raised vital questions about India’s partnership with the Russians. “Where is our relationship with Russia going,” he asked, adding that India had signed the deal with Russia at a time when they were going through a crunch. “They said give us work. I would like to believe we helped them in their time of need.”
With the shipyard getting more work and the Russians striking it rich with oil prices rising, the Navy Chief accused them of going slow on the project. His tough talk on Russia comes ahead of the visit of a high-level Russian team for renegotiating the price. The issue had also figured during Prime Minister Manmohan Singh’s recent visit to Russia for a summit with President Vladimir Putin.
Under the Indo-Russian inter-governmental contract signed in 2004, Russia was to deliver the carrier by August 2008 for $1.5 billion. Apart from seeking a hike that violates the contract, Russia has indicated that the carrier cannot be delivered to India before 2012. The Naval Chief said India was trying to persuade the Russians to work faster on the project. "If they put enough people on the job, the naval carrier will be commissioned by late 2010 or early 2011,” he said.
Navy comes clean on N-sub
For years, the Navy denied the project even existed. But on Monday, Admiral Mehta said India’s nuclear submarine — the Advanced Technology Vessel (ATV) — would be commissioned into the fleet in two years time. “The project is somewhere near completion,” he said.