Analysis: Sino-Russia Il-76 row -- Part 2

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HONG KONG, June 12 (UPI) -- Russian officials complain that the Chinese have not been understanding and accommodating in their negotiations with the Kremlin over the long-stalled Ilyushin Il-76 transport aircraft deal.

The Chinese insist they will not sign any major military procurement agreement with the Kremlin until this problem is solved to their satisfaction.

The Russians say they are still willing to carry out the agreement and complete the manufacture and delivery of the Ilyushin Il-76 transport aircraft to China. But considering the current reality in Russia and Uzbekistan, the manufacturer feels it is only fair to readjust the price.

A source from Ilyushin Finance told UPI recently that the Ilyushin Il-76 transport aircraft dispute with China has made some recent progress. That is, China is now aware of the reality in Russia and is willing to discuss the possibility of signing a new contract. The China side insists, however, that the specific models of the transport aircraft, production sites and prices all will have to be renegotiated.

The Chinese side also has asked to inspect the aircraft production plant before signing a new official agreement. A more feasible plan is that the Chinese side first will inspect the Ulyanovsk Aircraft Factory, which is now preparing for the production of a brand-new version of the Ilyushin Il-76, called the Il-476.

The Ilyushin Il-476 is equipped with a full numerical flight-control system, a glass cockpit and a new-generation PS-90 engine. China is somewhat familiar with the Ulyanovsk Aircraft Factory, which in the past has produced Tupolev Tu-204 passenger aircraft for China that proved quite satisfactory in quality.

The factory will need to upgrade its equipment to manufacture the Ilyushin Il-476, as currently only 20 percent of the necessary equipment is ready. Fortunately, money is not a problem at the moment. The Ilyushin Group has sufficient financial capability to organize the production.

Russia recently set up the state-owned United Aircraft Corp., made up of the Ilyushin Group, Sukhoi and MiG. The Tashkent Aircraft Production Corp. also has decided to join this group, with the final signing ceremony to take place within two months. Once the Tashkent company formally joins the state corporation, it may receive new funding and be able to resume its full production capability.

According to the Russian source, China already has initiated preliminary contact with the United Aircraft Corp. to discuss renegotiating the Ilyushin Il-76 transport aircraft deal, but the whole process will take some time. It is not clear when a new agreement would be signed.

The latest developments with regard to the Ilyushin Il-76 deal are exactly in keeping with this author's prediction -- that China would have no alternative to Russia to produce its military transport aircraft.

The question now is what impact China's recent creation of the J-11B -- an illegal copy of Russia's Sukhoi Su-27 air superiority fighter -- will have on its renegotiation of the Ilyushin Il-76 deal with the Russians.

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(Andrei Chang is editor in chief of Kanwa Defense Review Monthly, registered in Toronto.)