A Russian company said Friday that it had abandoned a US$500 million (Ђ387 million) project to build a thermal power plant in Iran because of Iranian authorities' refusal to raise the contract price in compensation for rising costs, news reports said.
The Tekhnopromexport company said that in 2001 it signed a preliminary agreement with Iranian authorities to build the Tabas thermal power plant and develop a coal mine intended to produce coal for it, according to a statement carried by the ITAR-Tass and RIA Novosti news agencies.
It said that foot-dragging by Iranian officials had resulted in the project becoming unprofitable because of rising costs. Tekhnopromexport said that it wanted to raise the contract price to US$800 million, but Iran refused.
The ITAR-Tass quoted Tekhnopromexport's director Sergei Molozhavy as saying that the company could reconsider its decision if the Iranians accept a higher contract price.
Russia is building a nuclear power plant in the Iranian southern port of Bushehr under a US$800 million contract. Moscow also has signed several arms contracts with Iran worth hundreds of millions of dollars.
Along with China, which also has strong economic interests in Iran, Russia has opposed international sanctions against Iran.
Both nations have balked at the U.S., British and French efforts to put the resolution under Chapter 7 of the U.N. Charter. Such a move would declare Iran a threat to international peace and security and set the stage for further measures, which could range from breaking diplomatic relations to economic sanctions and military action, if Tehran refuses to comply.
Russian Deputy Foreign Minister Sergei Kislyak met Friday with Iranian Ambassador to Russia, Gholamreza Ansari, urging Tehran to cooperate with the U.N. nuclear watchdog and help it solve outstanding questions about the nature of the Iranian nuclear program.
Iran insists its nuclear program is aimed only at producing electricity, but the United States and other countries fear Iran is seeking nuclear weapons.
"The Russian side underlined the need for Tehran to cooperate constructively with the International Atomic Energy Agency," the Russian Foreign Ministry said in a statement, reports AP.
Deputy Ambassador of the Czech Republic to Russia, Lubos Vesely, was among 20 diplomats, who were expelled from the Russian Federation