INS Vikramaditya: A Highly Questionable Symbol of Friendship

INS Vikramaditya: A Highly Questionable Symbol of Friendship

Major General Mrinal Suman

A banner displayed prominently at the handing over ceremony of INS Vikramaditya (earlier called Admiral Gorshkov)  in the Russian city of Severodvinsk  on 16 November 2013 read – “Vikramaditya: Symbol of India-Russia Friendship”. Most knowledgeable observers must have marvelled at the acerbic sense of humour implied in the declaration and struggled to hide their sardonic expression. 

Vikramaditya is anything but a symbol of friendship. Friends do not renege on contractual obligations, friends do not violate sovereign promises, friends do not mislead, friends do not cheat, friends do not exploit and friends do not arm-twist. In fact, Vikramaditya represents narcissistic attitude of the Russians and supine capitulation of the Indian government.  

A short background will be in order here. India’s sole aircraft carrier INS Virat was due to retire in 2007 and the indigenous aircraft carrier was scheduled to be completed not before 2012. India was, therefore, on the lookout for an aircraft carrier to fill the gap.

Russia offered the 44,500 ton Admiral Gorshkov, a decommissioned hybrid carrier/cruiser lying in hibernation since 1995. It was to be a free gift from ‘one friend to another’. However, India was required to pay for its refurbishment. As an integral part of the package deal, India was to purchase 12 single-seat MiG-29K 'Fulcrum-D' and 4 dual-seat MiG-29KUB aircraft, 6 Kamov Ka-31 "Helix" helicopters and other equipment.   

  

Originally laid as Baku in 1978, Admiral Gorshkov was launched in 1982 and commissioned in 1987. The ship has been dogged by misfortunes since its conception. To start with, major software bugs in the new command and control system delayed its completion. Thereafter, a boiler room explosion caused considerable damage in 1994.

Three different delegations of the Indian Navy had visited Russia to inspect the decommissioned ship in 1995, 1998 and 1999 respectively. They indicated that the material condition of the ship was deteriorating rapidly and the state of machinery/systems on board had worsened to that an extent that most required replacement/refit rather than repairs.    

After nearly a decade of negotiations, the deal was finally signed on 20 Jan 04 and the effective date of the contract was established as 24 Feb 04. Refurbishment cost of the carrier was negotiated at $947 million. The refurbished carrier was contracted to be delivered to India within a period of 52 months, i.e. by August 2008. 

Repair and Re-­equipping (R&R) work was to be carried out at the government owned Sevmash shipyard in the Russian city of Severodvinsk. The work started with due diligence. However, it was soon realised by the shipyard that the scope of work had been grossly under-estimated. Large portions of steel hull, entire length of cable, motors, turbines, boilers and other facilities had to be completely replaced or re-fabricated. For example, 1750 compartments out of a total of 2500 had to be re-fabricated/re-configured.

   

In November 2007, Russia shocked India by raising a demand of $2.9 billion for the ship, (three times the contracted cost) and sought deferment of delivery by additional 52 weeks.  India was understandably dismayed but found itself in a tight corner with no leeway whatsoever. After months of bitter negotiations, both sides agreed to a revised price tag of $2.35 billion on 10 March 2009. New delivery date was shifted to end-2012.

Sea trials began in Russia’s White Sea in June 2012. However, they had to be called off prematurely in September 2012 due to multiple boiler failure – seven out of eight steam boilers of the propulsion machinery became out of order. Consequently, the delivery deadline had to be extended by another year. 

It was no wonder that Defence Minister Antony heaved a sigh of relief on finally receiving delivery of INS Vikramaditya on 16 November. He was candid in admitting that the deal had nearly failed. The Naval Chief termed it as a result of exceptional perseverance. 

The Russian Stratagem

The Russians deserve credit for managing the whole process in a highly ingenious and well thought-through manner. Enormity of their stratagem can best be illustrated by recalling major developments in a chronological order:-

a)  After the break-up of the erstwhile Soviet Union, Russia found accident-ridden Admiral Gorshkov to be too expensive to be maintained. A decision was taken to do away with it in 1994-95. With no resources available for mothballing it scientifically, it remained uncared and derelict. As breaking up of a ship is a costly proposition, Admiral Gorshkov’s fate remained undecided.

b)  It was at this opportune time that Russia became aware of India’s search for an aircraft carrier to bridge the expected gap during the period 2008-13. With a view to make the package irresistible, it cleverly sugar-coated the offer by making a free gift of the ship and charging only for R&R, thereby generating much needed work for its shipbuilding industry which was in deep recession. Notwithstanding the fact that the deal was linked to India’s procurement of MiG-29 aircraft, India found the offer to be too good to be declined.

c) Russia skilfully tailor-made its offer to suit India’s requirements. As a brand new aircraft carrier would have costed around $2.0 to 2.5 billion in early-2000, Russia agreed to charge only $947 million for complete R&R package, considerably less than the prevailing cost of a new carrier. Moreover, Russia promised to deliver it by August 2008, thereby meeting India’s requirements ideally. No wonder then that India accepted the offer enthusiastically.

d)  Although Sevmash shipyard had neither built/repaired ships of this size nor possessed any work experience of working on aircraft carriers, R&R work was assigned to it. It was a subjective decision as Sevmash had little work at hand and needed orders urgently to avert bankruptcy. As pointed out by the Controller and Auditor General of India (CAG) in its Report 18 of 2008-09, the shipyard’s total revenue was $81 million in 2004 when it was loaded with the Indian contract worth $875 million. Worse, Sevmash enjoys poor reputation. It is notorious for reneging on contractual commitments. Norwegian firm Odfjell was forced to cancel a $544 million contract to build up to 12 tankers, allegedly for serious delays and demands for price increase.

e)  Russia is claiming that it underestimated the total scope of work initially. It is hard to believe that Russia did not know the full scope of the work involved. For example, to claim that most of cable was expected to be usable in a ship with rotting hull segments is sheer baloney. Russia knew right from the beginning that both the cost and the time-schedule were totally unrealistic propositions. In any case, it had no intentions of abiding by them. 

f)  Once India had swallowed the bait, signed the deal and released part payments, Russia decided to spring a surprise. R&R work on the ship commenced on 09 Apr 04. Even if Russia had underestimated the work initially, it would have realised the actual scope of work by the year end. However, it cleverly chose to remain silent till November 2007. Just 10 months before the scheduled delivery date, it raised claims for additional cost and extension of delivery date. Perhaps, there is no other example of such unprincipled and deceitful breach of contractual commitments in international arms trade. 

g)  Absurdity of demand for additional price can be gauged from the fact that the cost of sea trials was increased from the contracted $27 million to $522.57 million, an escalation of close to twenty times. It is not understood as to what new unanticipated factors had crept in to justify such an astronomical increase. It shows dishonest and devious approach.

h) Russia had intentionally waited till end-2007 to be in a position to blackmail and arm-twist India. As India had become complacent after signing contract with Russia, it had not explored any alternate option to acquire an aircraft carrier in the required time-frame. With the scheduled retirement date of INS Virat drawing uncomfortably near, it became anxious to acquire INS Vikramaditya. Thus the timing was perfect for Russia to deliver the unexpected blow and exploit India’s desperation. It even threatened to cancel the contract.

i) While demanding that the deal be re-priced at an outrageous figure $2.9 billion, Russia shrewdly announced that it was willing to compensate India for the increased cost of Gorshkov if it got more military orders. It was blackmail at its worst, that too by a much proclaimed friend. India was finally coerced to shell out $2.35 billion for the carrier ship. Concurrently, in a linked deal, India had to place order for additional 29 aircraft MiG29K for close to $1.2 billion. It is difficult to estimate the quantum of cost of Vikramaditya that Russia has defrayed by hiking the outlay for aircraft and other equipment.  

  

It is being claimed that since 1750 of 2500 compartments have been completely re-fabricated and a total of 234 new hull sections (using 2500 tonnes of steel)  installed to achieve the desired shape, almost two third of the ship has been renovated. Russia is claiming that the ship will have a service life of 30-40 years instead of 20 years as estimated earlier. Indeed it is a laughable premise. 

It is a common saying that a chain is as strong as its weakest link. Similarly, service life of Vikramaditya will not be determined by 234 new hull sections but by the state of 30-year old hull sections installed in 1978. It must also be remembered that the ship was lying unmaintained in a state of total neglect for 10 long years from 1994 to 2004.

Indian Ineptness and Capitulation

Whereas Russia handled the complete contract in a highly skilful manner, the same cannot be said for India. If India let Russia take it for a ride, the fault lies with the inept India procurement regime.

Despite repeated assertions that single vendor procurements should be avoided, India banked on Gorshkov alone. It failed to explore possibilities of ordering a brand new carrier or seeking a surplus carrier from a Western country. Resultantly, it rendered itself vulnerable to blackmail by Russia. May be India got taken in by repeated declarations of lasting friendship and the free gift. India forgot the basic dictum that ‘there are no free lunches’.  Friendship means little in the world arms trade – commercial interests rule supreme.

The ship had been laid at Chernomorsky shipyard in Nikolayev (now in Ukraine), with equipment being supplied by various member countries of the erstwhile Soviet Union. Due to the collapse of the Soviet Union, no design details and documents were available. One wonders as to how large scale design changes that are required to reconfigure a cruiser into a full-fledged aircraft carrier were realistically worked out. As is their wont, Russians were highly uncommunicative. India left major designing to Russia. Although India Navy has a highly competent ship designing bureau, India chose to sign the deal without full knowledge/analysis of the design changes to be incorporated.  

As pointed out by the CAG, the contract was drafted in a highly amateurish and slipshod manner. For example, responsibility for paying insurance premium was not specified and Russia got an opportunity to demand $35.80 million for it. There was no provision to levy liquidity damages for delay at stages. For that matter, stage payments were not even linked to demonstrated physical outputs that take forward the achievement of the contractual objective. Most shocking is the fact that the contract did not include the final blueprint and design of the ship being paid for. Everything was left fluid. It was expected that the needed details would get evolved during the progress of work.

In May 2007, the then Naval Chief claimed that the ship would be delivered by late 2008 or early 2009. He went on to declare that the Indian monitoring team located at the shipyard had confirmed that the work was going on as per the schedule. Apparently, he was unaware of the fact that less than 35 percent of the work had been done by then. By August 2007, within a period of 4 months of the Naval Chief’s progress-on-schedule assertion, the work came to a complete halt at Sevmash. Russia wanted India to agree to revised cost and release additional payments.

In addition to three high level committees constituted to monitor the project, a Warship Overseeing Team (WOT) of 45 members was located at the shipyard for the entire duration of R&R work. One wonders as to what functions WOT performed. India came to know of the delay only when Russia presented the revised cost and delivery dates in October/November 2007.

Finally

Hopefully, INS Vikramaditya will perform and not become an embarrassment. It suffers from a number of major limitations. Whereas aircraft carriers of similar tonnage carry up to 40 fighter aircraft, Vikramaditya can carry only 16 fighters and 10 helicopters. Further, it will have to depend on its helicopters for airborne early warning functions with highly limited coverage and endurance. As it lacks catapult launch capability, AWACS aircraft like E-2D Hawkeye cannot operate from its deck. Most worrisomely, Vikramaditya does not possess required air defence capability at present. 

As per the reports appearing in the press, Russia is blaming India for exploiting the situation when the Russian ship-building company was in a bad shape and facing closure – for that reason, it was ready to sign any kind of contract. It is a weird viewpoint. Instead of being grateful to India for saving Sevmash from imminent bankruptcy, Russia is alleging that India drove an unfair deal. 

CAG has lamented that cooperation from the Ministry of Defence (MoD) in taking forward the audit effort was less forthcoming than usual. MoD’s reluctance is understandable. It was a deal that should have never taken place. India erred at every stage and capitulated before the unethical seller. In CAG’s words – “The objective of induction of Vikramaditya as an aircraft carrier in time to bridge the gap in Indian Navy capabilities has been defeated. The decision to go in for R&R of a second hand ship has become questionable as a new aircraft carrier would have cost much less and would have had twice the life span”.

India should also be prepared for regular extortion by Russia. Its past track record inspires little confidence. As the Russians never share critical design details/drawings, India will need continuous Russian help to maintain the ship during its entire service life. Russia will certainly exploit such an immense leverage to extract unwarranted favours, both in terms of exorbitant financial gains and additional defence orders.  

Hopefully, India has learnt due lessons from the deal and is much wiser now. India will do well to remember that even inter-government agreements between two sovereign nations carry little sanctity. The insincere will always find justification to renege on them.*****

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