Libyan revolution spells disaster for Russian defense contractor

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MOSCOW — A leading Russian defense contractor has reported the loss
of contracts in Libya.

The state-owned Russian Tactical Missiles has lost nearly $800 million
in contracts with the Libyan military. The company, which reported $390
million in sales last year, attributed the losses to the revolt that
overthrew and killed Col. Moammar Gadhafi in October.

Russia's Bal-E coastal defense missile system.

“In total, export contracts that were not fulfilled totaled 600 million euro,” Russian Tactical Missiles director-general Boris Obsonov said.

In a briefing on Jan. 31, Obsonov said his company signed several agreements for missile systems. He said the missiles included air and coastal defense, such as the Bal-E system.

“It is impossible not to note the fact that a contract was signed with Libya for our Bal-E coastal defense missile system,” Obsonov said. “Unfortunately it was not fulfilled.”

Bal-E, compared to the U.S.-origin Harpoon and French-origin Exocet, was identified as an anti-ship cruise missile. The digital system was meant to fire single missiles or salvos toward targets up to 120 kilometers away.

“These lost opportunities — that which we call lost profit — are
pretty serious for the corporation and not just in the financial sense,”
Obsonov said.

Obsonov said his company, which expected to export about $530 million in
2012, had also been close to completing additional contracts with Libya. He
did not elaborate, but the company has been Russia’s prime contractor of
tactical missile systems.

In 2011, Russia’s state-owned arms export agency, Rosoboronexport,
assessed that the nation’s defense industry would lose $4 billion in
contracts because of the revolt against Gadhafi. The new interim government
in Tripoli has not approved any of the defense projects initiated by

“In addition, there were several contracts still in the final stages of
discussion,” Obsonov said.

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