Absurd deal

SECOND EDIT


The government has come in for sharp criticism from the Comptroller and Auditor General (CAG) over a deal for acquiring Russian aircraft carrier Admiral Gorshkov. The CAG report points out that the government is acquiring a used aircraft carrier with half the life of a new one but is willing to pay 60 per cent more for it than the cost of a new carrier. This is indeed a ridiculous deal. But back in 2004, when the government entered into an agreement with the Russians, the deal did not seem absurd. With its only aircraft carrier, INS Viraat, due to retire soon and its indigenous carrier likely to be ready only after 2012, India desperately needed a carrier and Gorshkov was the only one available. It met India’s defence needs. The Russians offered the carrier for free but said that India would have to pay US$ 800 million for upgrade and refit of the ship, and an additional $1 billion for the aircraft and weapons systems. It was not a bad bargain. However, over the years Russia has been hiking the cost of refitting the Gorshkov and India has been submitting to its demands. The Russians are now demanding $2.9 billion for the carrier alone.
India is in an unenviable situation today. Not only is it having to fork out an amount far more than originally agreed to, but also it is hard for it to scrap the deal. It has already paid the Russians $602 million and they are unlikely to return that amount. Besides, other carriers that India could purchase do not suit India’s weapon systems. India simply cannot afford further delays in acquiring an aircraft carrier.

Officials have blamed their helplessness in resisting Russian pressure given India’s dependence on Russian weapon systems. This is a fair argument. However, India is vulnerable to pressure because it has failed to foresee and plan its purchases. Hence the desperate purchase of whatever is available and at any price. The lack of transparency surrounding defence deals too is responsible for this mess. It is essential that the government comes clean on where Indian diplomacy slipped over the Gorshkov deal. As for the Russians, India must make it clear to them that Moscow’s pressure will have negative impact on the bilateral relationship. There are many defence purchases in the pipeline. Russia must realise that India will not easily forget its unpleasant Gorshkov experience.

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