Aletho News

ΑΛΗΘΩΣ

Russia may lose billions for breaching missile contract with Iran

RIA NOVOSTI | June 30, 2010

Russia’s refusal to deliver S-300 surface-to-air missile systems to Iran means Tehran could turn to China as its main arms supplier, depriving Moscow of a serious source of revenue, a Russian daily suggested on Wednesday.

Moscow said in mid-June it would freeze the delivery of S-300 air-defense systems following a new round of UN sanctions imposed on Tehran on June 9. Security Council Resolution 1929 imposed a fourth set of sanctions on Iran over its nuclear program, including tougher financial controls and an expanded arms embargo.

According to Nezavisimaya Gazeta, Russia’s losses will amount to the value of the contract plus penalties for breach of contract.

The S-300 contract is worth some $800 million, while Russian experts estimate the penalty for breach of contract at $400 million.

Furthermore, Iran could refuse to buy any more military products from Russia, leading to an estimated loss of $300 million to $500 million a year.

In another indication of a trend that should be worrying to Moscow, experts pointed to Iran’s decision to effectively end cooperation with Russia in the civil aviation sector.

Earlier in June, Iran banned its airlines from using Russian-built Tu-154 airliners on domestic and international routes. In addition, there have been reports of the imminent deportation of Russian pilots because the Islamic Republic already has “enough qualified flight personnel.”

Iranian Defense Minister Ahmad Vahidi warned on June 22 that Russia would be responsible for the consequences of its failure to deliver S-300 surface-to-air missile systems to Iran.

Russia initially said the delivery of S-300 systems to Iran would not be affected by the new UN sanctions since they are not included in the UN Register of Conventional Arms, but experts from the Federal Service for Military and Technical Cooperation concluded the missiles did come under the new set of sanctions.

A Kremlin source echoed that opinion on June 11, while Foreign Minister Sergei Lavrov said it was up to the president to make the final decision.

Moscow signed a contract on supplying Iran with at least five S-300 systems in December 2005, but nothing has been delivered. The United States and Israel have urged Russia not to fulfill the contract.

The advanced version of the S-300 missile system, called S-300PMU1, has a range of over 150 kilometers (over 100 miles) and can intercept ballistic missiles and aircraft at low and high altitudes, making it effective in warding off airstrikes.

July 2, 2010 - Posted by | Aletho News, Economics, Wars for Israel

1 Comment »

  1. Russian troops&civilians stopped Hitler and turned the tide of WWII.
    Their success was due more to the fear of Stalin than
    their fear of Germans.
    Now, they want a more “comfortable life” without a leader they fear.
    But, they don’t know how to do that…. that’s the back-story.

    So now the Russian Gov’t is “Playing to Cute”….

    Can you imagine the pain of Medevedev& Putin in their fence straddling.
    The Russian Gov’t has become the mush that Kruschev
    spoke of in the ’50s.

    Comment by mot | July 2, 2010 | Reply


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 732 other followers