Russia May Upgrade Iran's Subs

St Petersburg Times:

Russia is reportedly in talks to upgrade three Iranian submarines, a $270 million deal that could revive the bilateral arms trade but further irritate the United States.

Rosoboronexport, the state-owned arms selling agency, is in negotiations to refurbish three Kilo-class diesel submarines and equip them with Club-S anti-ship missiles, Kommersant reported Monday, citing unidentified sources. READ MORE

Rosoboronexport refused to comment on the Kommersant report, as did St. Petersburg's Admiralteiskie Verfi shipyard, which delivered the three subs to Iran in the 1990s.

An arms deal would likely inflame relations with Washington, which is already irritated by Russia's participation in Tehran's nuclear program.

"The United States will be unhappy if this contract is signed," said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies defense think tank.

The Kommersant report came less than a week after Russian officials said they were ready to build more nuclear reactors in Iran. Moscow's construction of the Islamic republic's Bushehr reactor has already raised international concern that Russia is unwittingly helping Iran develop a nuclear weapon.

Large-scale deliveries of conventional weapons to Iran began in 1990 and included about 40 MiG-29 fighters, S-200 air defense systems, the three Kilo-class submarines and licenses to produce T-72 tanks and BMP-2 infantry fighting vehicles.

But in 1995, Prime Minister Viktor Chernomyrdin signed a deal with U.S. Vice President Al Gore not to deliver any more weapons to Iran.

When Russia withdrew from the agreement in 2000, analysts predicted that Iran could become Russia's No. 3 arms client after China and India. But aside from a batch of Mi-17 helicopters, there have been no reported arms deliveries since.

Annual arms sales to Iran, including spare parts, have been less than $50 million, said Marat Kenzhetayev, an expert with the Center for Arms Control think tank.

But if a deal to refurbish the submarines comes through - worth $90 million a piece - the picture could change.

"This deal would galvanize the arms trade between the two countries," said Kenzhetayev.

Kenzhetayev said that pressure from Washington thwarted a deal to deliver Iskander surface-to-surface missiles about two years ago.

In 2003, the U.S. State Department blacklisted Tula KBP company for the sale of laser-guided Krasnopol-M artillery shells to Iran, which the company denied.

The 200-kilometer range Club-S missile systems, which reportedly would be fitted on the Iranian submarines, are unlikely to present a serious threat to the United States, said Makiyenko of the Center for Analysis of Strategies and Technologies, adding that "[the Americans] would get excited even if we sold them cartridges."

Kommersant quoted Rosoboronexport's deputy general director Vladimir Pakhomov as saying that while aviation dominated arms exports in recent years, naval systems would account for 51 percent of weapons deliveries in 2005, as opposed to 24 percent last year.

This year Russia is set to deliver seven Kilo-class subs to China, all of them fitted with Club-S missiles, Makiyenko said.