The recent admission by the Indian Navy sheds some light on the incompetence and the corruption of the Indian defense procurement department. It appears that the Indian Navy signed on the dotted line to purchase mult-million Dollar Air-Craft Career after doing a summary visual inspection. It also appears that the Indian Navy bought the ship on an “As Is Basis”.
The decision to ink the multi-million dollar deal to purchase decommissioned Russian aircraft carrier Admiral Gorshkov was taken after a mere “visual examination” of the ship in “as is condition”, the Indian Navy has admitted.
The Navy said in a reply dated September 22, 2009, on a Right to Information (RTI) request that it went ahead with the deal based on the “thought” that repairs would make the ship sea-worthy.
But it was only after the “equipment was opened up” later for a “detailed examination of hull structures, systems, cabling, etc” that the Navy found that entire replacements and not repairs were necessary for the carrier.
“As per the contract signed in January 2004, the original package was drawn up based on visual examination in as-is condition wherein it was found that the majority of the equipment, systems could be repaired while the electronic equipment could be renewed,” Vice-Admiral S P S Cheema with the Integrated Headquarters, Ministry of Defence (Navy), wrote in his RTI reply.
Aircraft Carrier “Admiral Gorshkov”: Delhi wanted a Lada, & now demands a Mercedes. The Bharati Auditor-General has severely criticized Delhi for the The Admiral Gorshkov ripoff. The ongoing saga of the refurbishment of “Admiral Gorshkov” has spoiled relations between Delhi and Moscow for quite some time. The Russians are sick and tired of revised requirements from Delhi and have repeatedly raised the price of the Air Craft Carrier that is to be delivered to Delhi in 2012. The deal has come to a breaking point on several occasions, only to be salvaged with Delhi agreeing to pay more money to Russia. President Medvedev who once left Delhi on short notice after failed negotiations is now pressing this shipyard to push the ship out as soon as possible. It is still not certain that the political pressure can overcome the technical problems faced by the Sevmash yard. A tale of two Air Craft Carriers
Pointing out to the biggest irregularity so far that led to an unprecedented hike in price in the purchase of defence equipment, the Comptroller and Auditor-General (CAG) of India today “ripped” through the Ministry of Defence. Quoting an example, it said more than double the price was paid for the purchase of the multi-billion dollar sea-based aircraft carrier, Admiral Gorshkov from Russia.
The CAG tabled its report in Parliament today saying the deal was signed in 2000 and the ship was to be delivered in 2008. That has now been advanced to 2012 by the Russians, who have also sought more money. The ministry could not control the cost overrun or the delay. The ship has limited capabilities, as it does not have a crucial system that will detect and destroy incoming anti-ship missiles and enemy aircraft at short range. The system costing some Rs 230 crore failed the test and now it cannot be fitted till 2017.
Coming down severely on the Russian aircraft carrier, the CAG said a new one was available by paying just 40 per cent of the cost paid to the Russians for an old and re-fitted carrier that was to be de-commissioned from their Navy fleet. It is “…. a second- hand refitted carrier that has half the life span and is 60 per cent more expensive than a new one,” said the audit report, while adding that India was now likely to pay US dollars 1.82 billion for the carrier as against the original contract amount of US dollars 875 million. Ajay Banerjee Tribune News Service. New Delhi, July 24
The original price has been tripled ($627 million to $2 Billion) and there is a sense that it might be increased again. The main reason for the increase in the price is the unrelenting expectations of the Bhrartis who now expect a tip of the line ship–even though they purchased a mothballed dilapated tub.
The Russian are sick and tired of the Indian demeanor who continue to bargain endlessly. In recent years, India has grown closer to the USA, and many defense deals may be in the offing. Cracks are showing the Indo-Russian alliance and a chagrined Russia is now charging market prices for the ship.
The CAG report apart, at present price negotiations are on and India could end up paying close to US dollars 2.9 billion for the carrier. Hence India will end up paying more than 3 times the price. This does not include the price of 16 MIG 29K fighters that will be on the deck of the ship. The original enhanced price of US dollars 1.8 billion included the fighters. Russia then re-revised the price to US dollars 2.9 billion. The CAG also gave a comparative chart of the prices calculated 2004, which showed that a new carrier would have cost Rs 1.14 billion and with a life of 40 years.
The most substantial increase, US dollars 522 million on account of sea trials, which were originally contracted for US dollars 27 million. This has increased by almost 20 times to US dollars 550 million.
The government has paid for 66 per cent of the re-fitting, while only 35 per cent of the work was complete. The CAG, in another serious noting, added that the ministry did not show any documents pertaining to the aircraft carrier after October 2007. CAG officials, while talking to the media, said they had got no reply from the ministry to its queries.
It touched upon seven high-value acquisitions. All of them showed significant cost of schedule problem, violations of procurement procedure, and infirmities in contract, said the report. Besides the aircraft carrier, it also includes the deal for six Scorpene submarines signed with a French company after a delay of nine years. This led to a loss of Rs 2,838 crore. Uncalled for concessions were given to the company.
The contract was awarded to a French firm for which the Navy also accepted deviations in the submarine parameters. The CAG says uptil December 2008 only 9. 34 per. CAG rips through Defence Ministry. Slams purchase of aircraft carrier. Ajay Banerjee Tribune News Service. New Delhi, July 24
A mutipolar world and the realities of South Asia have made India realize that red is thicker than greenbacks. The Indian establishment always suspicious of the US is predisposed to the Red Bear. This week proved the old axiom that when Delhi sees trouble it runs to Moscow. The Kremlin seeking new allies hasn’t totally hugged India but it sure wants the Billions of Dollars New Delhi is about to spend on airplanes. to that end, India has agreed to pay more for an archaic Aircraft Career call Admiral Gorshkov. India is desperate for icons and symbols of power.
