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. Last Updated: 07/27/2016

Prague Gives the An-70 a Big Lift

ReutersZeman chatting with Putin on Wednesday. After the talks, he told reporters he backed Russia's military campaign in Chechnya.
The An-70 military transport aircraft, rejected by NATO member-states in favor of the yet-to-be built A400M, has now got at least one NATO customer -- and perhaps a new lease on life.

In a deal to settle Russia's Soviet-era debt, the Czech Republic will take delivery of three An-70s by the end of 2005 or early 2006 as part of an effort to re-arm its military.

The agreement was signed late Tuesday along with 14 other contracts to settle the last $1.1 billion portion of Russia's debt.

"We have managed to get rid of one of the most important obstacles and resolved the debt problem," Czech Prime Minister Milos Zeman told businessmen at the Russian Chamber of Commerce on Wednesday. "Now we are entering another stage of not only economic but also cultural, political and even military cooperation."

Zeman said the Czech government had picked the An-70 at the recommendation of its military, but refused to elaborate.

For the An-70, a joint project between Russia and Ukraine that had touted itself as a plane for Europe but was rejected in 2000, the decision could be a vote of confidence.

The An-70 is a medium-haul, short take-off military transport aircraft that can carry up to 35 tons of cargo and fly up to 5,000 kilometers nonstop.

Leonid Terentyev, head of An-70 maker Medium-Transport Aircraft Consortium, said in a recent interview that he had been negotiating for some time with the Czech Defense Ministry over the jets.

The first An-70 aircraft are to roll off the production line in 2004 for service in both the Russian and Ukrainian air forces. Russia is expected to buy 164 aircraft by 2018, and Ukraine could take 65. Prague is the first foreign customer.

Terentyev said he hopes the plane, which is being built at the Polyot plant in Omsk, will find more foreign customers than just the Czech Republic.

Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies think tank, said that he doubted the plane would find any more takers and that Europe and the United States would probably be displeased with the Czech Republic's decision.

"I strongly suspect that the Czechs will be the only people in the world who will take these planes," he said.

Zeman on Wednesday shrugged off suggestions that the decision would be criticized, saying that in every deal there is always an offended party.

The last defense deal clinched between Prague and Moscow was in 1997, when the Czechs took $10 million worth of T-72 tanks and MiG-21 ammunition in a debt repayment.

Makiyenko said that the decision to accept the An-70 looked like a shift in policy.

In 1995, the Czech Republic handed its 10 MiG-29s to Poland in exchange for 11 Polish-made helicopters.

Meanwhile, Zeman invited Russian businessmen to participate in more joint ventures and the privatization of Czech companies during a speech at the Russian Chamber of Commerce.

Zeman urged both countries to not only boost mutual trade but to make better use of each other's potential.

He said the Czech Republic does not "put all its eggs in one basket" and instead diversifies its sources of investment.

"We would like to see our Russian friends become involved not only in Karlovy Vary, but also in the other regions and cities of the Czech Republic," Zeman said, referring to the popular resort frequented by Russian tourists.

He added that more joint ventures should be created, singling out energy, cars, beer and glass as examples.

Prime Minister Mikhail Kasyanov praised the signing of the 15 agreements, which are in addition to nine that he signed during a visit to Prague in October.

Under them, Russia struck off $2.5 billion in debt in a much-criticized deal between Unified Energy Systems and the Czech company Falcon Capital.

Among the 15 contracts signed Tuesday are a cooperation deal between Vneshtorgbank and the Czech Export Bank, the delivery of $200 million worth of nuclear fuel to a Czech nuclear power station, the construction of a $50 million hotel in Nizhny Novgorod and the joint production of car parts.

Russia will also deliver five Valdai cargo ships produced by St. Petersburg Severnaya Verf shipyards for $180 million.

With the signed contracts in hand, Zeman went to meet with President Vladimir Putin on Wednesday.

Putin said the overall political atmosphere between the two countries has improved, while trade turnover reached $2.5 billion in 2001.

"I have no doubt that your visit will have a positive impact on the further development of relations between our two countries," Putin told Zeman.

Speaking to reporters after the meeting, Zeman praised Putin as a great statesman who has "managed to lead Russia from high seas to calm waters."

Zeman said that he supported Russia's military campaign in Chechnya and the forging of closer ties between Russia and NATO but that he did not understand why Russia supported Palestinian President Yasser Arafat.

"Russia has to acknowledge the fact that it has to fight terrorism not only in Chechnya but in the entire world ... there are no bad and good terrorists," he said.