MiG Denies Algeria Jets Deal in Trouble

Jetmaker MiG denied on Monday that Algeria was set to send back a recently delivered consignment of 15 fighter jets because of technical misgivings over the aircraft.

The planes are part of a $8 billion arms deal signed by Russia and Algeria in March 2006 that saw approximately $4.7 billion of the North African state's Soviet-era debt wiped out.

"The deal has not been broken," a MiG spokeswoman said. "We do not comment on any ongoing discussions."

Citing a source in the United Aircraft Corporation, Kommersant reported Monday that the Algerian Air Force last week agreed to return the planes.

The deal was reportedly inked with state arms-exporter Rosoboronexport, the Federal Service for Military and Technical Cooperation and MiG.

If confirmed, the return of the jets would be the first time that the country's military hardware has been returned over quality concerns. The report came as Algerian President Abdelaziz Bouteflika touched down in Moscow on Monday for a two-day official visit. He was set to hold talks with President Vladimir Putin on Tuesday.

The Kremlin press office and the Algerian Foreign Ministry could not say what the discussions would cover, but an industry source told Interfax that Bouteflika would discuss the weapons deals during his visit.

The 15 MiG-29 jets were the first of 36 aircraft delivered to Algeria as part of a consignment worth about $1.5 billion.

Algeria stopped taking delivery of the MiGs last year, after concerns were first raised over a consignment that arrived in late 2006, Kommersant Vlast reported last week.

In March, Bouteflika sent a letter to Putin demanding that Russia resolve the problems with the MiGs, Vlast reported.

Although talks have been going for several months, no deal to return the jets had been signed, Interfax said Monday, citing another industry source.

A spokesman for UAC on Monday refused to confirm that any agreement had been struck, saying the matter was not under its control. MiG has not yet been absorbed into the state umbrella company, he said.

A spokesman for the Federal Service for Military and Technical Cooperation refused to comment ahead of any talks between the presidents. Rosoboronexport also refused to comment.

The MiG-29s could be switched for more modern MiG-35 fighters or for Sukhoi jets, Kommersant cited the UAC source as saying. As part of the March 2006 deal, Algeria agreed to buy 28 Su-30 fighters, Kommersant reported.

A spokesman for Sukhoi refused to say whether the number could rise.

Analysts cast doubt, however, on the Algerian claims of technical problems, saying the moves could be the result of a struggle within the Algerian government or aggressive moves by foreign competitors, including France and China.

Algeria may have found a better deal elsewhere or might be looking to get more modern Russian aircraft, said Andrew Brooke, an analyst at the International Institute for Strategic Studies.

While Russia's arms industry cannot offer discounts, China is willing to undercut its rivals to break into the valuable North African market, Brooke said.