quarta-feira, 27 de fevereiro de 2008


INS Vikramaditya Hits Delay, Cost Increases - and a Switch?

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Adm. Gorshkov: Before.
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On January 20, 2004 India and Russia signed a deal to refurbish and convert the 40,000t Soviet/Russian Admiral Gorshkov into a full carrier by removing the guns, anti-shipping and anti-air missile launchers on the front deck, replacing them with a full runway and ski jump, changing the boilers to diesel fuel, enlarging and strengthening the rear aircraft elevator, and many other modifications. The announced delivery date for INS Vikramaditya was August 2008 – an ambitious schedule, but one that would allow the carrier to enter service in 2009, around the time as their light carrier/LHA INS Viraat (formerly HMS Hermes, last of the Centaur class) was scheduled to retire. The new ship will berth at the new Indian Navy facility in Karwar, on India’s west coast.

Initial reports of delays sparked controversy in India, but even the Ministry has now admitted their truth. The INS Viraat’s retirement is now set for 2010-2012 – but even that may not be late enough, as slow negotiations and steadily-lengthening delivery times will push delivery of the Gorshkov back to 2010 at the earliest. Reports of delivery in 2012 or later are beginning to surface, even as the delivery date for India’s 37,500 ton indigenous carrier appears to be slipping back well beyond 2013.

Right now, there are 2 major concerns in India. One is that slipping timelines could easily leave India without a serviceable aircraft carrier. The other is the extent of the cost increases, especially if more increases are added once India has paid for most of the budgeted work and is deep into the commitment trap. The carrier purchase has now become the subject of high level diplomacy, and an amusing recent rationale from the Russians. If some of the rumors being floated are true, the sale may be doomed by unresolvable negotiating positions, by a shipyard that can’t even execute on commercial contracts – and by a rumored offer from Crazy Uncle Sam’s Carrier Clearance Blowout (“prices so low, they’re crazy!”) that would have far-reaching ripple effects…

Waiting for Gorshkov…

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According to the 2004 press release, INS Vikramaditya was supposed to enter the Indian Navy in August 2008. That looks almost certain to fail, but India’s Ministry of Defence initially denied reports of delays. Then, in May 2007, Chief of Naval Staff Admiral Sureesh Mehta said the ships will be delivered:

” late 2008 or early 2009…. Our officials, who are stationed at the spot, have said that the work is going on as per schedule and we can have a month long delay once the work is completed as that part of Russia is frozen for a long time.”

Later comments on this issue included this May 1, 2007 quote:

“The work is only three to four months behind schedule and we can expect the aircraft carrier to be delivered by late 2008 or early 2009”

Subsequent updates, however, have proven the critics correct, with even the Ministry admitting as much. Cost estimates and reports concerning the Gorshkov’s final total vary from $700-$1.4 billion, of which $400-500 million has reportedly already been paid. DID’s experience with Indian defense procurement issues is that these figures mean little, beyond defining broad orders of magnitude. Transparency will eventually come, but deals with Russia mean that it will come only from pressure within India, and then only after all other alternatives have been exhausted. Reports until then are really a set of varyingly educated guesses.

That there is a real issue of both time and cost, however, can no longer be denied. February 2008 news reports are giving figures of up to 3-4 years before refurbishment and testing are complete, and the refurbished ship can join the fleet. This would place its in-service data at 2011-2012, which risks a gap with no serving carriers in the fleet if further delays occur or the INS Viraat retires slightly early.

Meanwhile, China is working hard to refurbish the 58,000t ex-Russian carrier Varyag, and some analysts believe the ship could be operational in a testing capacity by 2010.

Those sunk construction costs, Russian possession of the Gorshkov, the difficulty in finding a substitute carrier to replace the Gorshkov sooner than 2013, and the Chinese push with the Varyag, have all combined to give the Russians substantial leverage in their negotiations.

Gorshkov-Vikramaditya: Aerial Complement

MiG-29K 3-view
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Note that these timelines and cost figures for delivery of the ship do not include aircraft, which are contracted separately. The original carrier’s complement was 12 Yak-38 Forger V/STOL fighters, 12 Ka-28 helicopters, and 2 Ka-31 airborne early warning helicopters. The removal of the Gorshkov’s forward missiles, ski ramp, and other modifications will improve the ship’s air complement somewhat. The nature of its original design, however, means that INS Vikramaditya will still fall short of comparably-sized western counterparts like the 43,000t FNS Charles de Gaulle nuclear-powered aircraft carrier, with its 40-plane complement that leans heavily to fighter jets.

Ranges given for the refitted Vikramaditya seem to average 12-16 fighters and 4-16 of the compact Ka-28/31 helicopters; diagrams seem to suggest total stowage space for a “footprint” of no more than 15-16 MiG-29Ks, with each Kamov helicopter sporting a comparative footprint of about 0.4, and about 5-6 open footprint spots on deck.

A related $740 million contract for 16 MiG-29K aircraft plus training and maintenance was confirmed on December 22, 2004, with an option for another 30 MiG-29Ks by 2015. They would be operated in STOBAR (Short Take-Off via the ski ramp, But Assisted Recovery via arresting wires) mode, and the MiG-29K was reportedly selected over the larger and more-capable navalized SU-33 because India hopes to operate them from an indigenous smaller carrier as well.

The Gorshkov-Vikramaditya’s complement will also include Kamov Ka-31 AEW and/or Ka-28 multi-role helicopters, along with a complement of torpedo tubes, air defense missile systems, et. al. If India does indeed buy E-2C+/E-2D Hawkeye naval AWACS aircraft, as is currently rumored, they would be added to this mix and take up footprint slots of their own.

Updates & Contracts:

USS Vikramaditya?
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Feb 19-23/08: Crazy Sam’s Carrier Clearance? As reports begin to suggest that Russia and India are too far apart to agree on the Gorshkov refit, speculation grows that the USA intends to solve India’s problem with a stunning offer during Defense Secretary Gates’ imminent visit to india. instead of retiring and decommissioning its last conventionally-powered carrier, the 81,800 ton/ 74,200t USS Kitty Hawk [CV-63, commissioned 1961], would be handed over to India when its current tour in Japan ends in 2008. The procedure would resemble the January 2007 “hot transfer” of the amphibious landing ship USS Trenton [LPD-14], which become INS Jalashva. The cost? This time, it would be free. As in, $0.

Naturally, there is a quid pro quo that accompanies these rumors. In return for an aircraft carrier that would be larger than its counterparts in every navy other than the US Navy, India would select at least 60 F/A-18 E/F Super Hornets in its MMRCA fighter competition, to serve as the carrier’s air wing. Unlike the Gorshkov, the Kitty Hawk is a purpose-built carrier whose full air complement is a whopping “75+” aircraft and helicopters. India has also expressed interest in the USA’s E-2 Hawkeye carrier AWACS aircraft, which would be a natural fit for its new ship.

AIR F-18F Over CV-63 USS Kitty Hawk
F/A-18F over CV-63
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As a number of sources point out, this is a multi-pronged move that would achieve a number of objectives all at once. First, the offer removes all Russian negotiating leverage over India by removing the issues of sunk costs, foreign possession of the Vikramaditya, and any danger of being left without a carrier. The Indian Navy would be greatly strengthened, and its ability to police the Indian Ocean from the Straits of Malacca to South Africa would take a huge leap forward. Any additional work to upgrade or refurbish the carrier could be undertaken in India, providing jobs and expertise while maintaining full national control over the refit. The USA gains financial benefits of its own, as the Navy avoids the expensive task of steaming the Kitty Hawk home and decommissioning it. Americans would almost certainly receive maintenance contracts for the steam catapults, and possibly for some new electronics, but those economic benefits pale in comparison to the multi-billion dollar follow-on wins for Boeing (Super Hornet), Northrop Grumman (E-2 Hawkeye), and possibly even Lockheed Martin (F-16 E/F, F-35B). All of which works to cement a growing strategic alliance between the two countries, and creates deep defense industrial ties as well.

Then there’s the effect on Russia, whose relations with the USA currently border on outright hostility. With the MiG-29Ks no longer necessary for India, that contract would almost certainly be canceled. At which point, the commonality value of choosing the MiG-35 as a lower-cost secondary MMRCA buy drops sharply, opening the door for other MMRCA split-buy options that could include the Saab/BAE JAS-39 Gripen, or a complementary American offer of F-16E/Fs and/or F-35Bs. The combined effect of these blows would be a severe setback for Russia’s arms industry, though rising oil & gas revenues in Russia and other export opportunities may lead to less shrinkage and civilian re-purposing than publications like the Weekly Standard believe. Barents Observer |
Weekly Standard | Information Dissemination: Feb 20th/ 23rd.

Feb 21/08: “Galrahn” of the respected blog Information Dissemination passes a key tip along to DID. First, recall that the Sevmash shipyard in Severodvinsk, Archangel Oblast is responsible for the Gorshkov refit. Until recently, they also had a $544 million contract to build up to 12 tankers for the Norwegian shipping form Odfjell. When it was signed in 2004, it was promoted as “a historic deal in Norwegian-Russian industrial relations.” Now it has been canceled, and Odfjell CEO Terje Storeng has used terms like “no will to try to understand that this is a commercial project,” “deliberately sabotaged and delayed the project” et. al. to Dagens Næringsliv. No longer:

“Following serious delays in the construction process, combined with demands for further price increases from the Yard, continuous cooperation problems as well as protracted negotiations, Odfjell decided today to serve formal notice of cancellation to Sevmash. The instalments already paid are covered by standard refund guarantees from international banks. Odfjell will further claim full compensation for its costs and losses caused, on account of wilful misconduct and massive contract breaches by the Yard. Unless the matter is solved amicably between the parties, the issue will be solved by arbitration in Sweden, as provided for in the contract.”

Note the Russian official’s comments in the Feb 7/08 entry. Closure may once again become a very real possibility for Sevmash. Worse, Odfjell’s experience has to give India serious pause re: the reliability of Russia’s new refit cost estimates, and the likelihood of further extortion to ‘adjust’ the deal down the road. Barents Observer | Dagens Naeringsliv report [Norwegian] | Odjfell.NO release

Feb 7/08: Zeenews quotes an unnamed “Russian official” with interesting and somewhat unsettling arguments, in advance of a high-level delegation’s arrival led by Indian Defence Secretary Vijay Singh:

“Moscow feels that the agreement for supply of the 45,000 tonne warship was signed at a time when the Russian ship-building company was in bad shape and India “used” the situation to sign the contract at lower price. The ship-building company was facing closure and was ready to sign any kind of contract when the contract was signed.”

Defense Industry Daily needs to look up the exact definitions to be certain, but we believe this process is known as “shrewd negotiation,” followed by “a deal.” Indian Naval Chief Admiral Sureesh Mehta appears to be using the same lexicon, and has publicly said that there should be no revision to the Goshkov contract. Still, India cannot receive the carrier she wants if the shipyard goes bankrupt, and Russia is holding the carrier. This gives the Russians considerable leverage in negotiations, unless India can find an alternate provider. There may be a way out, however:

“But Russia is willing to “compensate” for the cost of Gorshkov if it gets more military orders, which Moscow insists is not linked to 126 fighter planes that India is planning to buy but other defence purchases.”

AIR Ka-28 Indian Navy lg
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Nov 19/07: India’s MoD confirms delays in the Gorshkov’s delivery and slow progress, without really answering any questions. It acknowledges that the Russian side has submitted a revised Master Schedule, attributing the delays to “Growth of Work.” In response, an apex level Indian committee under the Defence Secretary, and a Steering Committee under a Vice Admiral, have been set up. A team has also been stationed at the shipyard.

No word on the timelines or costs suggested; indeed, these are likely to remain under negotiation. Indian MoD release.

Nov 6/07: A top-level Indian Navy delegation is heading for Moscow to discuss the delay and price escalation in the Admiral Gorshkov aircraft carrier deal. A detailed financial and technical plan outlining the specific justifications and amounts will be presented to the Indian side, who is there to listen rather than to negotiate.

The report pegs the original price quoted for refurbishing the carrier was just under $980 million, adding that the Russians are insisting on cost increases of at least $350 million. Indian officials reportedly fear that the final escalation may end up being much more once they are deep enough into the commitment trap of having paid for work. The report also adds that the Navy “had reconciled itself to the fact that the delivery of the ship would be delayed from the original deadline of August 2008 by a few years,” a surprising development given the limited service life of India’s remaining carrier. If the government is indeed prioritizing cost containment over delivery dates, reconciliation of the INS Viraat’s service life with Gorshkov’s entry may prove difficult. IDRW.

Oct 18/07: India’s MoD finally admits the obvious, as part of an announcement concerning an Indo-Russia fighter development deal. India MoD release:

“The Defence Minister described the Agreement on FGFA as a ‘major landmark’ and said that the Indo-Russian relationship is on a trajectory to reach new heights…. Mr. Antony expressed satisfaction at the outcome of discussions on other important projects e.g., supply and licensed production of T-90 tanks, SU-30 MKI aircraft and other strategic issues. He admitted that there has been a delay in the delivery of the repaired and refurbished aircraft carrier Admiral Gorshkov along with supply of deck-based fighter aircraft MiG-29-K and said it was decided that some more studies by technical groups would be done to go through the details. He appreciated the efforts made by the Russian side to resolve issues relating to life cycle support of equipment of Russian origin.”

June 16/07: India Defence: High Level Indian Delegation In Russia To Re-Negotiate Defense Deals Pricing:

“With differences over prices delaying the delivery of upgraded Sukhoi multi-role fighters and Gorshkov aircraft carrier, India today rushed a high-level defence team to Russia with fresh proposals to break the logjam…. The visit of the team assumes significance with Defence Minister AK Antony admitting that New Delhi was facing “problems” in acquisition of the carrier Gorshkov as well as in negotiating a new deal to buy 40 more upgraded Sukhoi-30 fighters for the Indian Air Force.”

May 17/07: India Defence: No Delays in INS Vikramaditya Acquisition from Russia: Defence Minister. “However, sources from the Indian Navy had earlier confirmed reports being circulated in the Indian and Russian media regarding a possible two year delay in the acquisition of the Aircraft Carrier.”

Additional Readings

  • Bharat Rakshak – INS Viraat (formerly HMS Hermes, last of the British Centaur Class).
  • Asia Times (Aug 21/07) – India’s blue water dreams may have to wait. The Gorshkov isn’t the only carrier project in trouble. This article mentions the Gorshkov’s difficulties, and also details both the current state of the INS Viraat and difficulties with India’s smaller 37,500t indigenous carrier, which is reportedly slipping its schedule badly and will only be ready by 2015 at the earliest, instead of 2012.

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