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Venezuela to Buy Subs on Credit
Venezuela is negotiating with Moscow for a loan of up to $800 million as partial purchase price of four project 636 submarines to be ordered in Russia. In spite of the influx of petrodollars in that country, experts say that Venezuelan President Hugo Chavez needs money for his social programs and is looking for new sources of military financing. Vneshekonombank is said to be the source of the loans. Chavez will sign a contract for the submarines when he is in Moscow for the inauguration of Russian President Elect Dmitry Medvedev. The order will be split between Admiralteiskie Wharfs in St. Petersburg and the Amur Shipbuilding Plant.
The terms of the contract were agreed on at the end of last year. Chavez was to visit Russia in February and sign the contract while he was here. The conflict between that country and Colombia was the formal reason for the cancellation of that trip, although the real reason was commonly understood to be Chavez's desire to meet the new Russian president.
Negotiations are also underway on the purchase of 12 Il-76 heavy military transport planes, with a repair station and training center in Caracas. Chavez may be offered new Su-35 models while he is in Moscow as well. The contract for the submarines is worth no less than $1 billion and the Il-76 planes will boost the price of the total order to $1.5 billion. Observers say the loan is a risky one. Chavez has active opposition in Venezuela that has tried to overthrow him repeatedly and come close to succeeding. He is not expected to go to war with anyone. As one Russian official commented, “He simply likes saber-rattling.”
www.kommersant.com
All the Article in Russian as of Apr. 04, 2008
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