Delivery terms for Il-76 aircraft to China may be revised
07/03/2007 13:35 TASHKENT, March 7 (RIA Novosti) - The timeframe for the delivery of Russian Il-76 Candid military cargo aircraft to China may be reviewed due to increased production costs, the head of Russia's Federal Industry Agency said Wednesday.
Boris Alyoshin said initial costs for the aircraft assembly in Uzbekistan were higher than planned, adding that the problem would be straightened out within a month.
He said there were several options for solving the problem, including Uzbekistan paying compensation for the additional costs.
"For our part, we will work to reduce the component costs," he said.
Under a $1.5 billion contract signed in September 2005, Russia will deliver to China 34 Il-76 Candid (A-50 Mainstay) military cargo planes and four Il-78 Midas refueling tankers.
Media reports say Russia's state arms trader, Rosoboronexport, decided last year to transfer most of the production to Russia.
Uzbekistan's Tashkent Chkalov Aircraft Association, which initially won the contract in 2005, will now only build 15 of the transport planes as a subcontractor to Russia's Ilyushin.
First deliveries under the contract between Rosoboronexport and China's Defense Ministry were due to begin in 2007, but in 2006, Tashkent refused to sign a production contract with Rosoboronexport at the contract price.
The agreement was delayed, and Beijing suspended negotiations on several other military contracts with Moscow.
Moving the bulk of the contract to Ilyushin is seen as an attempt to clear the bottleneck with China.
According to Defense News, to complete the contract, Ilyushin and Rosoboronexport will have to find an additional $400 million.
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