April 29, 200917 yr From Jane's Oil and debt underpin Russian submarine sales to Vietnam By Jon Grevatt 29 April 2009 An expected deal between Vietnam and Russia over the former's procurement of six Kilo-class submarines - which was announced on 27 April by Russia's state news agency - is likely to be founded on debt, oil and a Moscow commitment to help modernise Vietnam's shipbuilding industries, Jane's understands. Carl Thayer, a specialist in the Vietnamese military and a professor of politics at the University of New South Wales' Australian Defence Force Academy, added that the deal - reportedly worth USD1.8 billion - had been under negotiation for many years. "Vietnam was close to procuring Kilo-class submarines before the Soviet Union broke up," he told Jane's on 28 April. "Then things changed and these submarines have been a priority since. This procurement is not the first big-ticket procurement from Russia but it is certainly the biggest." Thayer added, however, that Vietnam's defence budget, which is thought to total around USD3.6 billion, will not cover the costs alone. "Although some funds might be paid, it is likely that Vietnam will pay for the submarines through barter arrangements and especially oil, and also through Soviet-era debt," he said.
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