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Admiral Gorshkov contract in jeopardy over lack of funds - paper

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The overhaul of a Russian-made aircraft carrier sold to India under a 2004 contract will be delayed indefinitely due to insufficient financing and poor management of the project, a Russian daily said Wednesday.
MOSCOW, August 1 (RIA Novosti) - The overhaul of a Russian-made aircraft carrier sold to India under a 2004 contract will be delayed indefinitely due to insufficient financing and poor management of the project, a Russian daily said Wednesday.

The contract to deliver the Admiral Gorshkov aircraft carrier to India, which state-run arms exporter Rosoboronexport signed with the Indian Navy in January 2004, covers the modernization of the ship and equipping it with modern weaponry, including the MiG-29K Fulcrum aircraft and Ka-27 Helix-A and Ka-31 Helix-B anti-submarine helicopters.

The ship is undergoing modernization work at the Sevmash shipyard in Severodvinsk, in northern Russia, but its completion could be delayed for at least another four years, according to some reports.

"The aircraft carrier is being overhauled at the shipyard, but, unfortunately, the funds allocated for the work under the contract are not sufficient and we will have a hard time to meet the schedule," the Izvestia newspaper cited Eduard Borisov, the acting director of Sevmash, as saying.

"We are practically building a new ship using an old hull and changing everything else," Borisov said, adding that the company's management had earlier made an incorrect assessment of the modernization cost.

A high ranking source in the defense industry told RIA Novosti that the company's officials had underestimated the projected overhaul budget by at least 60-70% but had denied their mistakes for a long time.

He said the work already done on the Admiral Gorshkov could be compared to the construction of two destroyers.

"It would have been much easier to start the construction of an aircraft carrier from scratch than to modernize the old one," the source said.

Former director of the Sevmash shipyard, Vladimir Pastukhov, has been recently fired over his poor management of the project and some media reports suggested that prosecutors had been investigating a possible fraud case over mismanagement of funds by Sevmash officials.

Izvestia said Nikolai Kalistratov, the general director of the neighboring Zvyozdochka shipyard, could be appointed as the new head of Sevmash in the next few weeks.

The $1.5-billion Admiral Gorshkov sale is one of Russia's largest individual military deals with India. The two countries are currently working on military contracts worth $10 billion.

After joining the Indian Navy, the 45,000-ton aircraft carrier will be renamed the INS Vikramaditya and could replace the outdated INS Viraat, a Centaur-class aircraft carrier, which India purchased from Britain in 1986.

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