A dispute between two Russian shipyards is threatening to delay the delivery of two new destroyers to the Chinese navy, South China Morning Post said. A contract to build two 956EM series destroyers was originally awarded to the Russian Northern shipyard in St Petersburg but after three weeks of internal lobbying was switched by the Russian government to a second yard. Both Russian Northern and the Chinese contested the decision and in March Moscow decided to return the contract to Russian Northern. However, the second shipyard has refused to hand over part of the equipment needed for the destroyers. Russian Northern's only other source for the equipment would be to buy abroad, and it would be unlikely to be delivered in time to meet the delivery date of 2005.
Russian Northern supplied the Chinese navy with two missile-carrying destroyers in 2000 at a cost of US$800m.