India and Russia could reach a final agreement by the end of July on the cost of overhauling the Admiral Gorshkov aircraft carrier to be delivered to the Indian navy, the Hindu newspaper said on Friday.The original $1.5 billion 2004 contract between Russia's state-run arms exporter Rosoboronexport and the Indian Navy, which includes the delivery of MiG-29K Fulcrum carrier-based fighters, envisioned that work on the aircraft carrier would be completed in 2008.
However, Russia later claimed it had underestimated the scale and the cost of the modernization, and demanded an additional $1.4 billion, which New Delhi said was "exorbitant."
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The MCRA to an extent will also get effect by this deal.Russia it seems has not much of a foresight.
ReplyDeleteIt doubled the amount from $1.5 billion to $3 billion
I agree they killed the goose. India remained loyal to their primary arms vendor for many decades, even after the end of the Cold War. But the Gorshkov fiasco was too much. Russia did tens of billions of dollars in deals with India and they refused to take a loss that was the result of their own poor estimates?
ReplyDeleteFor three billion dollars they ought to have been able to build a new carrier from the ground up. I think the ship was in poor condition from the outset and Russia was so anxious to ink a deal that kept their shipyard workers busy that they misrepresented the project to India. This provided Western-leaning politicians and military officers to agitate for "diversifying" their sources for major weapons. The bottom line is that this will end up costing Russia far more than the 1.5 billion they would have lost if they had kept their mouths shut and delivered the ship on budget.