India may seek $100 fine from Russia over carrier delay

PanARMENIAN.Net - India may seek more than $100 million in penalty payments from Russia for delays in handing over the refitted aircraft carrier Vikramaditya, India's Economic Times reported on Tuesday, October 9, RIA Novosti reported.

The carrier - already years past its original 2008 delivery date - was supposed to have been handed over on December 4, 2012, but sea trials in September revealed the ship's boilers were not fully functional. Repairs to the ship's boilers could mean the handover is delayed until fall 2013, a United Shipbuilding Corporation commission investigation said last month.

“We may impose penalties for the delay,” an unidentified Indian defense ministry source told the paper. India may demand up to 6 billion rupees (about $115 million) which is around 5 percent of the total coast of the refitted ship.

Another source close to the Indian military industrial complex said New Delhi would be unlikely impose sanctions, as “it will negatively impact relations between the two countries in military-technical cooperation.” France has delayed delivery of six Scorpio submarines for more than three years, but India has not raised the issue of penalties over that contract, he said.

India and Russia signed the original $947 million dollar deal in 2005 for the purchase of the carrier, but delivery has already been delayed twice, pushing up the cost of refurbishing the ship to $2.3 billion.