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Russia might lose heavily for scrapping Iran defence contract

Last Updated: Wednesday, June 30, 2010 - 21:55

Moscow: Russia might have to pay a heavy
price for scrapping its S-300 air defence missiles deal with
Iran, frozen after the fresh UN Security Council, with the
penalty for breaching the contract put at USD 400 million.

In addition, Iran could refuse to buy any more
military products from Russia following this, resulting in an
estimated annual loss of up to USD 500 million, a report
warned today.

"The S-300 contract is worth some USD 800 million,
while Russian experts estimate the penalty for breach of
contract at USD 400 million," a report in the Nezavisimaya
Gazeta paper said today, further pointing out that Tehran
could turn to China for arms supplies, depriving Moscow a
serious source of revenue.
Following the fresh UNSC sanctions slapped on Tehran
on June 9 under US pressure, Moscow said it would freeze the
delivery of S-300 missiles, an older Russian equivalent of US
Patriot missiles.

Although the Foreign Ministry spokesman Andrei
Nesterenko underscored that the new sanctions do not cover the
sale of defensive weapons to Iran, but experts from the
Federal Service for Military and Technical Cooperation -- the
nodal watchdog for foreign arms supplies -- concluded that the
missiles did come under the new set of sanctions.

However, Foreign Minister Sergei Lavrov has said the
final decision in this regard has to be taken by President
Dmitry Medvedev.

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
fulfil the contract, RIA Novosti reported.

The advanced version of the S-300 missile system,
called S-300PMU1, has a range of over 150 kilometres (over 100
miles) and can intercept ballistic missiles and aircraft at
low and high altitudes, making it effective in warding off air
Nezavisimaya Gazeta cautioned that Iran could refuse
to buy any more military products from Russia, resulting in an
estimated annual loss of up to USD 500 million.

Iranian Defence Minister Ahmad Wahidi last week warned
that Russia would be responsible for the consequences of its
failure to deliver S-300 surface-to-air missile systems to

Earlier in June, Iran banned its airlines from using
Russian-built Tupolev 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".


First Published: Wednesday, June 30, 2010 - 21:55
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