ExclusiveMission impossible: How one man bought China its first aircraft carrier
Xu Zengping reveals for the first time the negotiations behind buying the Liaoning for the PLA Navy - and the secret behind its engines
It was a mission like no other. In the aftermath of the Soviet Union's collapse, one businessman armed with cash and a casino cover story scooped the world to buy the unfinished hulk of a Ukrainian aircraft carrier that would become the centrepiece of the PLA Navy.
Speaking to the media for the first time, the Hong Kong-based businessman at the heart of the undertaking reveals in a two-part series the details of the little-known, behind-the-scenes odyssey to realise China's long-held dream of owning such a warship.
Xu Zengping disclosed that the militarily sensitive original engines of the carrier were intact when Ukraine sold the vessel in 1998. This is contrary to what Beijing told the world at the time.
The "four intact engines had been perfectly grease-sealed" after work stopped on the vessel in 1992, presenting an enticing engineering package for a country seeking a leg up for its military.
It is the first time anyone linked to the deal has confirmed publicly the engines were in place at the time of purchase. Earlier reports said the vessel's power generation system was removed at Ukraine's Nikolayev South Shipyard on the Black Sea along with its electronics and weaponry before Xu bought it in 1998 for US$20 million.
"When I was taken to the carrier's engine room by the shipyard's chief engineer, I found all four engines were brand new and carefully grease-sealed, each of them originally costing US$20 million," Xu said. He said a refit finished in 2011 restored the four engines to operating condition.
What is now called the Liaoning was built on the hull of the partially completed Soviet Kuznetsov-class carrier, the Varyag. The Black Sea shipyard was about two-thirds of the way through the vessel's construction when work stopped as the Soviet Union crumbled. The hull languished until Xu made the deal, acting as a middleman for interests within the PLA Navy.
Xu said the shipyard agreed to sell the vessel because of the political turmoil that had left it in dire financial straits.
"The Chinese side deliberately released false information about the removal of the engines to make it easier for Xu and the shipyard to negotiate," a source familiar with the deal told the .
Western media also reported that the United States pressured Ukraine to remove everything on board the carrier, selling only the hull to the Chinese buyer, the source added.
A retired PLA Navy colonel said it was "very likely" that the Liaoning was still using the original Ukrainian engines. "The Ukrainian engine technology is better than China's," the retired officer said. "It's my understanding that our navy later sought help from Ukraine to get the carrier engines, which had been sealed up for years, up and running."
Buying the carrier was just the start. It took another four years to tow it from Ukraine to Dalian in Liaoning province, and more than a decade to fit it out.
Macau-based military observer Antony Wong Dong said that after years of negotiations, the Black Sea shipyard also transferred their engine technology to China's Harbin Turbine Company, a manufacturing plant specialising in military boilers, turbines and steam equipment.
There were signs that the engines had been improved.
"The original propulsion system designed for the Liaoning was the same as that of the Russian Kuznetsov-class aircraft carrier with a top speed of 32 knots. But the Liaoning is 6,000 tonnes heavier, so logically it would be slower," Wong said. "But recent sea trials showed the Liaoning's top speed was as fast as 32 knots, indicating its propulsion system has been upgraded."
The carrier was renamed Liaoning when it was formally delivered to the PLA in September 2012 and so far has been used only for training.
Its pennant number - a type of naval identification - is 16. "Do you know why the Liaoning has been numbered 16?" Xu asked. "It was because we spent 16 years getting the job done, from making the deal to rebuilding it."