RSK MiG delivers MiG-29s and gets paid despite opposition in Bangladesh

Published: 1/4/2000

The opposition within Bangladesh to the delivery of MiG-29s has been defeated, with the payment of at least $37.5m to the aircraft producer, RSK MiG, for the delivery of a number of aircraft over the year-end, with two MiG-29UBs from Sokol in Nizhny Novgorod and a MiG-29 from the RSK MiG Lukhovitsy Machine Building Plant in Moscow. The remaining four aircraft will be delivered in February 2000 under the $125m contract, which had its payment split into three parts: 10% within 30 days of signing the contract, a second tranche of $23m within 90 days and the balance within an expectedly generous nine years. Delivered under a contract signed in June and despite the seemingly favourable terms, the MiG-29 order has been the subject of considerable debate in Bangladesh, with the parliamentary opposition trying to block their purchase, using the courts. This resulted in the delayed payment of the second tranche of $23m and, while there has been no confirmation of the second payment, the delivery of the fighters suggests it has been made. Although it has only received 30% of the final purchase price, the addition to the company"s struggling cash flow will considerably assist in the ongoing development of the Tu-334 which, according to reports, still requires $67.8m for ‘fine tuning" out of the $309m claimed by MiG"s General Director, Nikolay Nikitin, as being required for the programme to go into production. The government has budgeted to provide funding for the project, although the amount is unknown and the company, along with many within the industry, is hopeful that the change of the man at the top, combined with windfall revenues from stronger oil prices, may have the effect of allocating additional funds for the programme. Associated articles: www.concise.org 16th July 1999, 20th July 1999, 4th October 1999, 19th October 1999

Article ID: 1280