Russia may lose billions for breaching missile contract with Iran

[Kshasty]

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.

http://www.en.rian.ru/mlitary_news/20100630/159641465.html