Article Posted on : - Jul 20, 2009

A file photo of Admiral Gorshkov.

NEW DELHI (BNS): India is likely to wind up its negotiations of procuring Admiral Gorshkov from Russia at a revised price close to $2.9 billion by next week, a media report said on Monday.

The final price of the aircraft carrier would be around $2.9 billion as demanded by the Russian side, The Hindu said. Quoting sources from the Ministry of Defence, it said the figure is likely to be finalised next week when negotiators end discussions.

The Russian negotiators had arrived here on July 10 and were scheduled to stay till July 17. The team has conveyed that the cost had been calculated as per the standards specified by its Government and that there was little room to de-escalate the cost, revised from its original price of $1.5 billion. This figure too had been raised to $2.2 billion.

Following Defence Secretary Vijay Singh’s recent Moscow visit, New Delhi was hopeful that the price of the aircraft carrier would be closer to $2.2 billion; however, over the past one week, negotiations had showed little sign of climbing down from their re-revised demand, the sources said.

“Eventually, it must be remembered that this is not a commercial negotiation between a buyer and a seller but a government-to-government engagement. Yet, the negotiations have been arduous,” the sources said.

As per the original contract signed in 2004, Gorshkov, which will be rechristened INS Vikramaditya after being inducted in the Indian Navy, was scheduled to be delivered in 2008. However, it is now expected to be handed over in 2012.

India has so far paid $602 million as advance to Russia. The final price does not include the 16 MiG29 K deck-jets that India plans to buy for the carrier.