Gorshkov delay: India may impose $115 mn penalty

Last Updated: Wed, Oct 10, 2012 10:47 hrs

New Delhi: A day ahead of the talks between the defence ministers of India and Russia, India Tuesday indicated that it may impose a five percent penalty for the delay in handing over the aircraft carrier Admiral Gorshkov, which is being refurbished at a cost of $2.3 billion. The penalty would work out to $115 million.

Defence Minister A. K. Antony will hold talks with his Russian counterpart, Anatoly Serdyukov, Wednesday during which issues related to delay in handing over the Admiral Gorshkov, rechristened INS Vikramaditya by the Indian Navy, will top the discussions.

A defence ministry official said here Tuesday that India may 'impose a penalty up to five percent of the contract ammount' if there are further delays in delivery of the 45,000-tonne carrier.

A decision on imposing penalties will depend on the outcome of the discussions between the two defence ministers.

Reports in sections of the Russian media indicate that the handing over of INS Vikramaditya has been delayed till either mext July or the fall of 2013 following recent sea trials which revealed serious problems in the vessel's boilers.

In this context, India will press Russia to expedite the fault-fixing and deliver the aircraft in the next six months at the most, a reliable source in the defence ministry said.

According to the reworked contract, the refurbished carrier was to have been delivered to India by December 4. However, due to a leeway clause of another 3-4 months, Russia can still meet its contractual obligation by delivering the carrier by March-April, 2013. If it fails to do so, India side may consider penalties.

The delay in Gorshkov's delivery is not the only instance of a default in timeline for delivery of key military weaponry. France was supposed to deliver the first of six Scorpene submarine in 2012, but now it is scheduled for induction in the Indian Navy only by December 2015.

India and Russia are also expected to discuss ongoing projects for 272 Sukhoi-30MKI fighters and 1,657 T-90 main battle tanks. Despite irritants like cost overruns and delays in the delivery of military hardware, Russia remains India's largest supplier of weapons, accounting for over 60 percent of India's imports.

The defence ministers' talks were earlier scheduled for Oct 4, but had to be postponed amid speculation that the Russian defence minister wanted to be in Moscow around the time Pakistan Army Chief Ashfaq Parvez Kayani was visiting the Russian capital. Moscow has denied such reports.

The Russian side is expected to brief India about the context of the revived military cooperation between Russia and Pakistan. For years, Moscow kept a distance from Islamabad in view of New Delhi's sensitivities, but the dynamics has changed since India started diversifying its imports of military hardware a few years ago.

With the competition hotting up, Russia is said to be exploring Pakistan as a market for Russian weaponry. Russia is also looking to intensify its diplomatic engagement with Pakistan largely due to its high strategic stakes in the stability of Afghanistan and its fears about the spillover of the Taliban terrorism into its periphery.

Russian President Vladimir Putin was expected to travel to Pakistan early this month, but deferred his visit.

Reliable sources said Putin's visit was cancelled due to Indian sensitivities and specially in view of his forthcoming visit to New Delhi towards the end of October or early November as it may give an impression of Moscow creating an equivalence between New Delhi and Islamabad.

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