October 28,2008:  Russia has become the go-to provider of short range, low cost, warships. Currently, Russian shipyards are building nearly $6 billion worth of warships for foreign customers (India, China, Algeria, Vietnam and Indonesia). A typical ship in this building is the Stereguschyy class corvette (one in service, with three more building.) These are small ships (2,100 tons displacement), costing about $125 million each. These "Project 20380" ships have impressive armament (two 30mm anti-missile cannon, one 100mm cannon, eight anti-ship missiles, six anti-submarine missiles, two eight cell anti-missile missile launchers). There is a helicopter platform, but the ship is not designed to carry one regularly. Crew size, of one hundred officers and sailors, is achieved by a large degree of automation. The ship also carries air search and navigation radars. It can cruise 6,500 kilometers on one load of fuel. Normally, the ship would stay out 7-10 days at a time, unless it received replenishment at sea. Like the American LCS, the Russian ship is meant for coastal operations. The navy wants at least fifty of them.

But there other Russian shipbuilding projects that don't fit the overall pattern. The main one here is the conversion of a retired Russian carrier, the 44,000 ton Gorshkov, into the INS Vikramaditya for India. This ship was supposed to enter Indian service this year, but has been delayed until 2012. The Russians admitted that this project suffered from shoddy workmanship, poor management and the loss of blueprints for the ship. These have to be reconstructed. 

The new deal will cost $2.5 billion. This includes the purchase of the Gorshkov, and Russian shipyards performing repairs, modifications and upgrades. Another $800 million is to be spent on aircraft, weapons and equipment. Building a Gorshkov type carrier today would cost about $4 billion, and take several years more. 

The Admiral Gorshkov entered service in 1987, but was inactivated in 1996 (too expensive to operate on a post Cold War budget). The Indian deal was made in 2004, and the carrier was to be ready by 2008. But a year ago reports began coming out of Russia that the shipyard doing the work, Sevmash, had seriously miscalculated the cost of the project. The revised costs were more like $1.1 billion for the $700 million refurb. The situation proceeded to get worse, with Sevmash reporting ever increasing costs to refurbish the carrier.

The Indians were not happy, and at first insisted that the Russian government (which owns many of the entities involved) make good on the original deal. India sent its own team of technical experts to Russia, and their report apparently confirmed what the Russians reported, about shipyard officials low-balling the cost of the work needed. This is a common tactic for firms building weapons for their own country. It gets more complicated when you try to pull that sort of thing on a foreign customer. The Russian government will cover some of the overrun cost. The Sevmash managers who negotiated the low bid are being prosecuted.

Most Russian shipbuilding projects work out. The Russian ships are simpler than their Western counterparts, and for coastal work are adequate. You get what you pay for, unless you are refurbishing a major ship that the Russians never quite got the hang of.