The issue is an embarrassing one for the Kremlin. Although Russia has enjoyed great success exporting advanced weapons systems, including combat aircraft, around the world over the past few years, its greatest problem has been cost overruns and long-overdue delivery dates owing to bottlenecks in production and shortage of skilled manpower in the Russian military-industrial sector.
Russian Prime Minister and former President Vladimir Putin last year careered through a huge restructuring of the Russian defense industry with particular emphasis on avoiding bottlenecks, production delays and cost overruns, especially for major export orders.
However, the row with Algeria occurred before this reorganization took place, and, in fact, the Algerian MiG-export fiasco helped provoke the reforms.
Originally, the Russian arms export monopoly Rosoboronexport had won a $1.3 billion deal with Algeria in March 2006 for 28 one-seat MiG-29 SMT air superiority jet fighters and for six two-seat MiG-29 UB fighters, defpro.news reported. Huge as it was, the order was only one component of a giant $8 billion arms export and military cooperation agreement.
However, once Algeria received the first 15 MiGs, the Algerian government pulled the plug on the deal in May 2007 and flatly rejected accepting any more of them. In October 2007 it went further, halting all payments on its remaining military deals with Russia until the Kremlin agreed to requisition the 15 MiGs that had been delivered, claiming they were of "inferior quality." After a long and acrimonious public row, the Kremlin agreed to take back the 15 aircraft in April 2008.
The row reflected a much more widespread problem, in that other nations that had bought large numbers of Russian aircraft or other weapons systems often had reported serious problems with an unacceptable number of component failures, due to poor production standards, poor maintenance or long delays and outright failure of the major Russian companies to supply an adequate number of spare parts and replacement components.
Usually, countries whose armed forces have suffered such problems with Russian equipment, as the Indian air force did with its Sukhoi interceptors, have complained and just put up with the problems or agreed to renegotiate the contracts under which they were supplied. They have not wanted to tear up their deals completely for fear of provoking Russia's anger, because of the extremely favorable credit terms under which Russia often offered such deals or because, like Venezuela and India, their governments were close strategic allies of Russia. The Algerians, however, were so furious, they went ahead and returned their MiGs anyway.
RIA Novosti cited several Russian outlets as claiming Algeria had requested the Russian government to send it 14 to 16 Sukhoi Su-30 Flanker fighters instead of the MiG-29 Fulcrum aircraft it was supposed to receive under the contract. The Sukhoi is generally regarded as a much more formidable and maneuverable air superiority fighter than the MiG-29, although the MiG-29 may be more effective in a close air support role.