Govt to look into Gorshkov cost issue | india | Hindustan Times
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Govt to look into Gorshkov cost issue

Stung by CAG criticism for escalating cost of second-hand aircraft carrier Admiral Gorshkov bought from Russia, the government assured Rajya Sabha that it would finally agree to a fresh price for the warship only after going through the audit report.

india Updated: Jul 29, 2009 14:17 IST

Stung by CAG criticism for escalating cost of second-hand aircraft carrier Admiral Gorshkov bought from Russia, the government on Wednesday assured Rajya Sabha that it would finally agree to a fresh price for the warship only after going through the audit report.

"Before entering into any contract, the government will go through all details. We will assess the criticism, including that of CAG, on the issue. At present, the Gorshkov price escalation is in negotiation stage. Nothing has been finalised," Defence Minister AK Antony said during Question Hour.

India had bought the 45,000-tonne Gorshkov from Russia in January 2004 at a total cost of $974 million, which included its refit and repair.

As the repair and refit of Gorshkov began in the Sevmash Shipyard, Russians made an additional demand for $1.2 billion towards the escalating cost of the work.

After revising the repair costs three times since 2007, Russia made a final demand for additional $2.9 billion in February this year.

The CAG report for 2008 laid in Parliament last week had slammed the Defence Ministry for buying the old warship at the price of a new aircraft carrier.

The CAG had noted that till 2008 the escalated cost was about $1.82 billion for the warship and another $52 million for the sea trials, which was originally pegged at $27 million in the 2004 contract.