India, upset over Russia’s unilateral decision to more than double the cost of the refurbishment of aircraft carrier Admiral Gorshkov, will discuss the issue with Moscow this week, defence officials said on Monday.
The Russians have told the Defence Ministry that they were raising the cost by a whopping $1.2 billion to $2.2 billion.
The two sides had agreed in 2004 that the refurbishment would cost $1 billion. India was expecting a hike of $400 mllion. “This is a breach of contract. When it was signed, it was a fixed price contract,” a defence official said on condition of anonymity.
<b1>India has already paid nearly half of the original $1 billion that was agreed upon. “Their (Russia’s) proposal is being studied and we will have to discuss it with the Russians at a higher level all over again,” a senior officer said.
India had sent a defence procurement team to Russia to discuss the increase in cost after Defence Minister A.K. Antony visited Moscow last month.
The Russians had then said that the cost would have to be hiked for the deal to proceed. A team of Russian officials is expected to visit India this week. The programme is already behind schedule. The carrier was to be delivered to India in August 2008 under the original contract. It is now expected to arrive only in 2010.