India, Russia to reopen talks on Stealth frigates

It is understood that a Russian team will be arriving in New Delhi shortly to re-negotiate the deal, plagued by delays ever since the on-board Shtil-1 medium range surface-to-air missile failed. The missile, which has been developed by Russia, had a successful launch early last year but failed the next two tests during the acceptance trials.

An Indian Navy team, which was in Russia waiting for the handover, was called back by Naval Headquarters as they refused to accept the ship with the faulty missile on board.

Written into the contract is a clause that offers liquidity damages to India in the event of delivery delays by the ship-builders. Navy sources say that as per the contract a delay of five months would attract one per cent deduction in costs. In the event of the delivery being delayed by more than five months, it attracts a maximum of five per cent deduction from the original costs. A further delay calls for both sides to re-negotiate the deal.

The stealth ships, designed by the Severynyde Design Bureau, were being built by the Baltiisky Shipyard in St Petersburg. The Shtil-1 missile had been designed by the Altair State Research and Production Association. An inter-departmental commission was set up to investigate the test failures.