Just as approaching weekend and I am trying to catch on to the news today seems to be a day of shocks. Just before demoting the office previous Govt had signed a deal with Russia for an Aircraft Carrier(AC). This was an old ‘war horse’ of Russian Navy to be refurbished and delivered to India.
This is the same AC which was probably left grounded after catching a fire while it was still in active duty. At the time of signing the deal in 2004 it was signed at $900 mn (Certain articles say that it was signed at $1.5 mn including everything)
Curiously this ship was launched in 1982 and commissioned in 1987 (That’s when it made its longest journey) and then in 1992 it was put for repairs (probably never completed testimony to turmoil that Russia went through during that phase)
Then as it can only happen in Govt dealings first came the news that it can not be delivered on time then came that it can not be delivered at agreed cost.
So there were frantic negotiations and some article is papers carried that negotiations did go to the highest level. The deal was done again at an increased cost of $2.2 bn. This was even after ‘India adopted a tough posture’ on dilly dallying by Russia. It was said that Initially they had asked for an cost escalation of $2bn.
In between the Director General of the shipyard that is fitting the ship, retired probably contributing to further delays
Now comes the news that Russia is demanding another $700 mn thus making the total cost as around $3bn.
India also has program to build its own indigenous Aircraft Carrier which it started in 2003 (co-incidentally this too was started by previous Govt in 2003 but then they decided to purchase one probably to fillin for the time that ours will take to build duely accounting for the time over runs which is so common in our indigenous programs).
Conceived well over a decade ago, the IAC project has been dogged by several technical problems even after the government finally sanctioned Rs 3,261 crore for it in January 2003
A price tag of $3bn which India will probably end up paying for acquiring the Russian Ship roughly amounts to around 14000-15000 Cr Rupees which could be good enough for almost four indigenous ACs (even if we amount for cost over runs that is bound to happen our own ships would still be cheaper and not as old as this 20 year old junk might turn out to be).
I wish the left were still part of the Govt. Probably they could have used some of their 'influence' in settling the deal of the AC without more turns & dips .. :)
Disclaimer: This is typically constructed based on news paper reports. I do not claim any authenticity of the any of the details mentioned here