A Ukrainian-based defence manufacturer has reportedly suspended work on a contract to supply the Iraqi military with light transport planes until it receives payment for work already done under the contract.
Interfax reports that state-run Antonov has a $550 million contract to supply military equipmment, including its An-32 aircraft, to Iraq, and a spokesman said it has fully fulfilled its obligations under the contract. However, it has been already incurring losses estimated at about $50 million for "reasons it cannot control", and the deadline for the delivery of the aircraft remains "an open issue".
Three An-32 planes are 100% ready for dispatch to the customer, but production has been stopped on two more planes that are partly built.
The contract requires the supply of over 400 pieces of military hardware, including BTR-4 armored personnel carriers, six An-32 light transport aircraft, and aircraft repair services for three to three-and-a-half years.
Among the key Ukrainian contractors are the Kharkiv-based Morozov design and engineering bureau, the Kharkiv engine design bureau, and the Malyshev plant, all of which belong to the Ukroboronprom concern, as well as Kiev-based Antonov enterprise.
The first batch of 26 BTR-4 armoured personnel carriers, two maintenance vehicles, and two BTR crew training simulators arrived in the Iraqi port of Umm Qasr on May 29, 2011.
Interfax reports that under the agreement reached by both sides, the deadline for the delivery of the first batch, which was originally scheduled for the end of 2010, was put off until April 2011 so the new armored personnel vehicles could be tested to make sure they meet military operational requirements.
Ukrainian Journal, on the other hand, reports that Iraq had imposed fines on Antonov for late delivery of the BTR-4.
(Sources: Interfax, Ukrainian Journal)