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Stealth frigates deal with Russia stumbles on costs

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SOURCE: THE HINDU

TH29_INS_TRIKHAND


The multi-billion dollar deal between India and Russia for four stealth frigates has run into trouble over pricing and local construction with Transfer of Technology (ToT).

India and Russia had signed an Inter-Governmental Agreement (IGA) for four additional Krivak or Talwar class stealth frigates during bilateral discussions on the sidelines of the BRICS summit in October last year. As per the agreement, two ships are to be procured directly from Russia and two to be built in India with Russian assistance.

In the commercial offer submitted later, Russia has quoted about $990 mn for the two ships to be directly imported. For those to be built in India, the commercial offer quoted about $800 mn for “supply of material to ensure construction of the two ships in India” and $51 mn for “supply of project documentation” to ensure their construction. The cost of construction of the two ships in an Indian yard — yet to be identified — was to be arrived at later.

Defence sources said this would steeply push up the overall cost of the two ships and it was seen as a way to ensure that all four ships were imported from Russia. “It will be a serious setback to the Make-in-India initiative,” one official observed.

The basic structures of the two frigates are already ready at Yantar shipyard in Russia and will be finished once the contract is finalised.

The issue was discussed in detail by the Defence Acquisition Council (DAC) at its meeting on November 7 which “compared the cost differential in the ships to be brought from Russia and those proposed to be built in India,” sources said.

It has been decided that identification of the shipyard to be deferred till the cost for the construction of the ships in India was not cleared.

Officials said the DAC has given approval to initiate cost negotiations for the both parts of the proposal but it was decided that “decision on procurement of two ships from Russia cannot be initiated unless details of ToT, cost etc of balance two ships are found acceptable.”

“The Navy has conveyed its concerns to Russia. They were told that we will either take all four ships or none,” official sources added.

India had earlier procured six frigates of the same class weighing 4,000 tonnes in two different batches.
 
I am pissed off with these kind of arms twisting. Seems back to the old game of INS Vikramaditya aka Goroshkov. Structures are ready means, India has paid substantial amounts amount. Why do we pay before finalising costs?

Better to buy four and do not buy in future before sealing the cost.

But even if you do that, they will say, costs have rising. Either you pay extra or no deal after taking money. India is in a peculiar position.
 
I am pissed off with these kind of arms twisting. Seems back to the old game of INS Vikramaditya aka Goroshkov. Structures are ready means, India has paid substantial amounts amount. Why do we pay before finalising costs?

Better to buy four and do not buy in future before sealing the cost.

But even if you do that, they will say, costs have rising. Either you pay extra or no deal after taking money. India is in a peculiar position.
Nope we havn't paid even a single penny for those 2 frigates till now....
 
Looks like the Indian Navy is looking at 20 modern Stealth Frigates:
3 Talwar Class + 3 Teg Class + 4 Improved Krivak=10 (4000 Ton)
3 Shivalik Class + 7 P17A =10 (6000 Ton)

And 10 modern Destroyers
3 Delhi Class + 3 Kolkata Class + 4 P15B=10
The Rajput class is already 30 years old and would be decommissioned.
 
Well its not like old times where on the name of friendship they can ask any price..
The matter is struck bcz indians are bargaining hard ..lets see what happens finally...
May be they can threaten india by saying purchase it or will we sell it on double price to pakistan lol
 
Russians now have new friend n pakistan, why not try their luck if they are willing to pay the amount india is.
 
I am pissed off with these kind of arms twisting. Seems back to the old game of INS Vikramaditya aka Goroshkov. Structures are ready means, India has paid substantial amounts amount. Why do we pay before finalising costs?

Better to buy four and do not buy in future before sealing the cost.

But even if you do that, they will say, costs have rising. Either you pay extra or no deal after taking money. India is in a peculiar position.

False news from the Hindu.

The Ukrainian Turbine maker has received " New Orders from its Long Standing Client , Indian Navy " , according to a small press release on their website.

The deal is going fine.

The trouble is in finding the correct Indian Partner. Remember, as its GOI paying for the ToT , it would be a Government Shipyard building it.
 
Well seems we are stuck again in bait & switch tactics. Better we diversify our cooperation with other maritime powers.
 

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