"We are returning to the contract and renegotiating the price of these planes," Mikhail Zavaliy, a Rosoboronexport official told reporters at an air show in the Krasnodar Region.
According to the 2005 contract between Rosoboronexport and China's Defense Ministry, worth $1.5 billion, Russia was supposed to deliver 34 Il-76 Candid medium-range military transport aircraft and four Il-78 Midas aerial refueling tankers.
The first deliveries under the contract were due to begin in 2007, but in 2006, Uzbekistan's Tashkent Chkalov Aircraft Association, the manufacturer of the aircraft, refused to sign a production contract with Rosoboronexport at the contract price.
As a result, the agreement was delayed, and Beijing suspended negotiations on this and several other military contracts with Russia.
Since then, the Tashkent-based company has become part of Russia's United Aircraft Corporation, and the planes will now be assembled at an aircraft manufacturing plant in Ulyanovsk in central Russia, the official said.