Pricing issue of Gorshkov brought to a successful conclusion: MEA

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Moscow, Dec.8 (ANI): After years and months of frantic negotiations, the pricing of the naval aircraft carrier Admiral Gorshkov has been finally resolved.

Although Indian Prime Minister Dr. Manmohan Singh and Russian President Dmitry Medvedev did not disclose or mention exact details of the complex defence deal during their joint press conference at the Kremlin on Monday, the Ministry of External Affairs confirmed that the pricing and technical issues have been resolved, and added that both sides have reached a final settlement.

According to the official spokesperson of the ministry, both leaders discussed the issue and noted the excellent progress in negotiations on the pricing and technical issues.

The final price was not revealed, but sources said it is somewhere near 2.2 billion dollars.

The Admiral Gorshkov was gifted to India for free in 2004 and under a contract signed in January 2004.

Russia's Rosoboronexport was to deliver the 44,570-tonne aircraft carrier to India in 2008. The 1.5 billion dollars contract earmarked 964 billion dollars for the refurbishment of Admiral Gorshkov and 536 million dollars for a complement of 16 MiG-29K fighter aircraft onboard.

In early 2008, Russia claimed it underestimated the scale and the cost of the modernization, and said it would not be in a position to deliver the ship before 2012 and at an additional cost of 1.2 billion dollars.

India termed the cost escalation exorbitant. After protracted negotiations, in February 2008, India agreed to pay an additional 800 million dollars for the retrofit.

In November 2008, shortly after the Russian nuclear submarine Nerpa met with an accident, Russia demanded an additional two billion dollars for the ship, instead of 1.2 billion dollars.

The Admiral Gorshkov is to be inducted into the Indian Navy as the INS Vikramaditya, as a replacement for India's INS Viraat, which is now 50-years-old.

The contract covers the complete overhaul of the ship, which had remained docked at the Sevmash shipyard in northern Russia for the past 12 years

Construction of the ship will be completed in 2010 and tests will start in 2011. It will be transferred to the Indian Navy in 2012, said the director of the Sevmash shipyard, Nikolai Kalistratov.

Sources told ANI that the agreement would be formally sealed in March when Russian Prime Minister Vladimir Putin is expected to visit New Delhi on the invitation of Dr. Manmohan Singh By Naveen Kapoor (ANI)

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