However, it has cautioned that the pace of work may decline if India does not cough up additional funds as an “advance payment” to refurbish the warship soon.

“But (to ensure) that this pace does not decline, we urgently need additional funding. We did not receive funds (for the project) from January 2007 and are now negotiating for an advance payment from the Indian side. As a rule, this is 20 per cent of the anticipated cost of the work,” Sevmash shipyard director general Nikolay Kalistratov said.

Moscow had earlier stunned Delhi by asking for an additional $1.2 billion, almost doubling the initial cost, to complete the carrier’s refit. While a decision on the final escalation has not been taken, it is expected to be between $600-800 million.

The shipyard issued a statement on Wednesday saying that the number of workers on the project has been increased from 1,200 to 1,500.

Putting pressure on India to pay up the additional funds soon, Kalistratov has cautioned that the pace of work may decline again if money is not received on time. This comes after India asked Russia to make an advance payment of $250 million to the shipyard that would be later adjusted in the final price settlement.

“A successful resolution of all financial issues will allow shipbuilders to take the cruiser for testing in the Barents Sea in 2011. In the winter of 2012, the final finishing work on the ship is planned and by the end of the year it will be ready for transfer to India,” the statement, issued by the Russian shipyard that came under criticism for underestimating the amount of money required to refurbish the carrier, said.

The statement was issued after a joint inspection of the warship by an Indian Navy team led by Vice Admiral Dilip Deshpande, Controller, Warship Production & Acquisition.

The original contract for the ship and its complement of MiG 29 K fighters, signed in 2004, was for $ 1.5 billion and the delivery date was set as August 2008. However, last year, Moscow conveyed that the refit would cost a whopping $1.2 billion more due to an underestimation of the work required to be done. It also said that the carrier would not be available before 2010-2011.

The warship needed new turbines, boilers, 2500 km of cabling and strengthening of its flight deck for operations by fighters as part of the refit.

Meanwhile, the delay in delivery of the warship has landed the Navy in a curious predicament. While the ship is not expected before late 2012 or early 2013, the MiG 29 K ship-borne fighters designed to operate on the Gorshkov are arriving in Goa this month. India is set to get 16 fighters, including four trainers to operate from the ship. The worry now is that the fighters, which have a life of 4,000 flying hours, will be ‘wasted’ on shore duties for the next five years before the ship arrives.