Govt to assess CAG criticism on Gorshkov cost escalation

India had bought the 45,000-tonne Gorshkov from Russia in January 2004 at a total cost of USD 974 million,which included its refit and repair.

Stung by CAG criticism for escalating cost of second-hand aircraft carrier Admiral Gorshkov bought from Russia,the government on Wednesday assured Rajya Sabha that it would finally agree to a fresh price for the warship only after going through the audit report.

“Before entering into any contract,the government will go through all details. We will assess the criticism,including that of CAG,on the issue. At present,the Gorshkov price escalation is in negotiation stage. Nothing has been finalised,” Defence Minister A K Antony said during Question Hour.

India had bought the 45,000-tonne Gorshkov from Russia in January 2004 at a total cost of USD 974 million,which included its refit and repair.

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As the repair and refit of Gorshkov began in the Sevmash Shipyard,Russians made an additional demand for USD 1.2 billion towards the escalating cost of the work.

After revising the repair costs three times since 2007,Russia made a final demand for additional USD 2.9 billion in February this year.

The CAG report for 2008 laid in Parliament last week had slammed the Defence Ministry for buying the old warship at the price of a new aircraft carrier.

The CAG had noted that till 2008 the escalated cost was about USD 1.82 billion for the warship and another USD 52 million for the sea trials,which was originally pegged at USD 27 million in the 2004 contract.

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