The Gorshkov Fracas

The Comptroller and Auditor General (CAG) recently came down heavily on the MoD over the total and complete mismanagement of the Admiral Gorshkov/INS Vikramaditya deal with the Russians.  Gorshkov was decommissioned by Russia in 1996 and offered “free of cost” to India in 2004, if India would undertake to pay for necessary upgrades and refitting, then valued at $800 million.

As of January 2009, that cost was estimated to have increased to about $3 billion.  Gorshkov was initially projected to be delivered to the Navy in 2008; a year past the scheduled delivery date, we haven’t seen hide nor hair of it.

The CAG report highlights several key issues:

• Gaps in planning and procurement of the aircraft carrier, whose need, first determined in the ’90s, was only translated into demand in 2004
• Suspect decision making in the approval of acquisition, despite on-site Indian Navy inspection reports indicating dilapidated material state of the carrier.
• Questionable vendor selection process in the awarding of the contract to Sevmash shipyard, which has no prior experience in repair and refitting of a vessel of the scale of Gorshkov
• Lack of effective monitoring and supervision of the project, despite seemingly several layers of oversight and steering committees
• Technological obsolescence, limitations in capabilities and omission of critical components of Gorshkov, including Close-in Weapon System (CIWS; which will only be only be refit after delivery in India, in 2017), Jet Blast Deflectors, and lack of quality control inspections of the flight deck’s arresting gear system
• Dubious payments made to Sevmash, totaling about $30 million,

What was initially just a bad idea, has now morphed into a chaotic, unmitigated disaster. Make no mistake — if and when commissioned, Gorshkov will be famous for being the most exorbitant lemon floating in the Bay of Bengal.  China’s two locally manufactured aircraft carriers (of comparable displacement to Gorshkov), equipped with SU-33 (the “Flanker” navy variant) will be complete by 2015, at a total combined cost that only slightly exceeds that of Gorshkov.  In fact, the CAG estimates that a brand new carrier with similar displacement and weapon systems could be indigenously developed for no more than $ 1.14 billion.

Politically, AK Antony has made all the right noises, claiming that everything will be verified before ratifying Russia’s demand for additional money.  Even Adm. Sureesh Mehta came out swinging, presumably to take some of the heat off his bosses. But even he will be hard-pressed to deny the significant divergence between Indian Navy’s vision and current reality.

Realistically though, what does Antony plan to do once he “verifies” the gaping holes that are known to one and all? Walk away from the project? India has already sunk millions, with nothing to show for it.

Should the people of India expect a change in the way our leaders go about managing capital acquisitions, and will CAG’s report crack the whip on systemic mismanagement? Wishful thinking, I fear. After all, one must recall the scathing report that the CAG issued on contract terms, questionable payments and substantial delivery delays on the acquisition of  SU-30MKIs back in 2000.

Not much changed since then — if anything, things have gotten worse.  Everything considered, the SU-30MKIs are top-line aircraft, while Gorshkov is a buoyant lemon. And not much can be expected to change, if the political apathy of our babus for national interest and strategic foresight remains unchallenged.

So here we are. Ten years have gone by since INS Vikrant was decommissioned.  INS Viraat has been granted life-support extensions until 2013. India has already coughed up about 70% of the upgrade/refitting costs of Gorshkov to Russia (despite only 30% of work being completed), and faces the reality of being severely encumbered in its posture against an increasingly hostile and hegemonic China in the Indian Ocean.

As India grapples with the feasibility of equipping our would-be aircraft carrier with anti-ship missile detectors by 2017, China will be inducting two home-built 93,000-ton nuclear-powered aircraft carriers by 2020 — allowing it to project power beyond its shores and immediate region like never before.

Food for thought.

Filed under: China, Comptroller and Auditor General, Indian Navy, World