MOSCOW, October 21 (RIA Novosti) - Russia will sustain significant losses if it decides to tear up a contract to deliver S-300 surface-to-air missile systems to Iran, an unnamed defense industry official said on Wednesday.
"The fulfillment of the contract to deliver S-300 complexes to Iran fully depends on the country's leadership," he said.
Russian military expert Konstantin Makiyenko previously said the decision not to go ahead with the contract would cost Russia about $1 billion in lost profits plus $300-400 million in fines and penalties.
The defense industry official stressed that the S-300 systems were defensive weapons.
"They are not under any embargo, and Russia is free to make its own decision on whether or not to supply them to one country or another," he said.
Reports about possible deliveries of S-300 missiles to Iran have aroused serious concern in the West and in Israel.
Iranian media, citing senior security officials, have repeatedly reported that Russia has started delivering elements of the advanced version of the S-300 missile to Tehran under a 2005 contract, but Russian arms industry officials have invariably denied such reports.
The latest version of the S-300 family is the S-300PMU2 Favorit, which has a range of up to 195 kilometers (about 120 miles) and can intercept aircraft and ballistic missiles at altitudes from 10 meters to 27 kilometers.
It is considered one of the world's most effective all-altitude regional air defense systems, comparable in performance to the U.S. MIM-104 Patriot system.