24 Jun 2006

Russian Federation will deliver 10 brand-new Mi-171Sh transport helicopters to the Croatian Air Force (Hrvatsko Ratno Zrakoplovstvo - HRZ) as a part of a Russian debt repayment to the Republic of Croatia. The details of this purchase have been finalized during the five-day long negotiations that took place in Russia between May 29th and June 2nd, during this time the official delegation of Croatian Ministry of Defence has met representatives of Rosoboronexport, a Russian state-run company specialized and responsible for arms export, as well as representatives of Ulan-Ude Aviation Plant, a company that is manufacturing the Mi-171Sh helicopter.

Under the agreement reached in Moscow, apart from helicopters, Russia will also deliver to the Croatian Air Force all the necessary special tools, test equipment and spare parts, and will organize the training for pilots and technicians of Croatian Air Force. The contract for delivery of Russian helicopters to Croatian Air Force is worth million and is part of much wider agreement for repayment to Croatia from Russia of the 5.7 million Soviet-era debt. The Russian-Croatian repayment deal is in fact part of Russian Deputy Finance Minister Sergei Storchak strategy to settle by the end of this year Russia's Soviet-era debts with Serbia, Montenegro, Croatia, Malta, Slovenia, Macedonia, and Greece.

When repaying external debts, as a policy of creating reserves, Russia is often offering compensation in form of delivery of civil or military aircraft. That was the case with Macedonia in 2003 when this country was offered Russian transport plane in exchange for part of the Soviet-era debt, offer which was refused by Macedonia, and recently when it was suggested that Russia may have offered Serbia to overhaul and modernize its small fleet of MiG-29 fighters and single An-26 transport plane in a deal that will be paid, in part if not completely, with repayment of part of Russia's Soviet-era debt. In the case of Croatia, the initial discussions were for supply of Croatian Air Force with two Beriev Be-200 amphibious fire-fighting aircraft. This was later changed and in 2005 Croatia asked Russia for 15 brand-new Mi-171Sh helicopters. Russia's answer was positive and Croatia was offered the Mi-171Sh helicopters at a unit price of .2 million.

However, due to the million budget limitation that Croatian Government has imposed to the Croatian Ministry of Defence regarding the helicopter purchase project, a correction in the quantity of helicopters to be delivered to Croatia has been agreed during the recent talks in Moscow, and under the latest agreement, Croatian Air Force shall get only 10 brand-new state-of-the-art equipped NATO-compatible Mi-171Sh utility transport helicopters, one of the latest and most modern developments of the famous Mi-8/17-family. Deliveries of first helicopters to Croatia are expected to start in the beginning of 2007 with the follow-on delivery tempo of two helicopters on every next 45 days.

Report by Igor Bozinovski