IANS

Kaliningrad (Russia), Aug 6: Russia's Yantar shipyard is negotiating a $60 million loan to enable it to complete the construction of three frigates for the Indian Navy, shipyard's director Igor Orlov said Wednesday.

Russia is building three Project 11356 Krivak IV class guided missile frigates for the Indian Navy under a $1.6 billion contract signed in July, 2006.

Orlov said the shipyard had previously taken out a $110 million loan from Russian national development bank Vnesheconombank (VEB) but was now forced to seek an additional $60 million loan due to "financial constraints".

He added that the problems had been caused by fluctuations in the ruble-to-dollar exchange rate.

"When the contract was signed, the rate was 28.2 rubles per one US dollar, but then it fell to 23.5 rubles," he said, adding that the shipyard had lost about 500 million rubles as a result.

However, the current exchange rate is 31 rubles per $1.

Russia said in late June it would meet its obligations to deliver the frigates to India by 2012.

An industry official said the first ship would be floated out this year, the second, in spring 2010, and the third a bit later, adding that the Indian government had provided sufficient and timely project financing.

A delegation of Indian military officials, led by India's deputy chief of the naval staff, Vice Admiral Raman P. Suthan, visited the Yantar shipyard in eastern Russian portcity of Kaliningrad last October and said they were satisfied with the pace and the construction quality.

Russia previously built three Krivak class frigates - INS Talwar, INS Trishul and INS Tabar - for India in 2004, but they all were delivered late.

All of the new frigates will be armed with eight BrahMos supersonic anti-ship cruise missile systems and not the Club-N/3M54TE missile system, which was installed on previous frigates.

The Krivak class frigate has deadweight of 4,000 metric tons and a speed of 30 knots, and is capable of accomplishing a wide range of maritime missions, primarily hunting down and destroying large surface ships and submarines.