The Gorshkov fiasco continues

So, we've seen a plethora of articles coming out from the latest negotiations of the ship. You can find one of the articles here.
The important part is the following:

Russia had stunned India last year by asking for $1.2 billion more for the warship's refit. Then, after a flurry of top-level discussions and visits to the Sevmash shipyard earlier this year, the cost escalation figure jumped to $2 billion, as first reported by TOI in July.

India, of course, realises it will have to pay "substantially more" for Gorshkov since the 2004 contract had "grossly underestimated" the amount of work required on the warship.

But Russia's propensity to jack up costs midway through the execution of contracted weapon systems continues to jar. The finance ministry has already shot down the defence ministry's proposal to consider Russia's original demand for a $1.2 billion jump in the refit costs, holding that it will set a bad precendent for other defence deals.

The finance ministry, in particular, has objected to the figure of $600 million for the year-long sea trials of Gorshkov slated to be held in Barents Sea from 2011.

India is banking upon Gorshkov for its long-standing objective to have two operational `carrier battle-groups'. The country's solitary and ageing 28,000-tonne carrier INS Viraat is currently undergoing another life-extension refit to ensure it can run at least five more years. Moreover, the delivery of the 37,500-tonne indigenous aircraft carrier being built at Cochin Shipyard is likely to take place only by 2014-2015 or so.

At this point, you wonder just how India can get out of this deal. Including the original 1.5 billion, this would wound up to be 3.5 billion, which is comparable to getting a brand new carrier as opposed to getting something that had been rotting outside. This price escalation seems to be consistent with all other recent transactions, which also has been prevalent in contracts with the air force and the ground force. At least the other large naval contract, talwar project, has not been plagued with the same problem.

It was interesting that this article also mentioned the other carrier project that is ongoing for India. Much talk have also been around how IAC has also been plagued by problems encountered in construction. It seems that Gorshkov at least put the problems with Indian shipbuilders in the back burner. It allows the Indian media to direct the anger at the manipulative Russians rather than the incompetence of their own inspection team who bought into the entire Russian assessment.