Warship deal with Russia losing support in France

The agreement to sell advanced warships to Russia is losing support in France because of Moscow's wish to get hold of sensitive military technology and concerns among Russia's neighbors, Le Figaro daily said on Wednesday.

Russia and France signed an intergovernmental agreement in January on four Mistral-class helicopter carriers - two to be built at the STX shipyard in Saint-Nazaire, France, and two in Russia under a French license.

Paris has agreed to transfer to Russia a highly sophisticated control and communication system, Sinik 9, which builds on the Sinik 8 system that is installed on the Charles de Gaulle aircraft carrier, the flagship of the French Navy, the paper said.

According to Le Figaro's sources, Russia has pushed through an important change in the intergovernmental agreement, replacing French "assistance" in technology transfer to Russia with a "guarantee" of technology transfer.

A number of Russia's neighbors have expressed concern over the upcoming deal, in particular Georgia, Lithuania, and Japan, especially after a Russian Defense Ministry source said in early February the ships would be inducted with the Pacific Fleet to protect the South Kuril Islands claimed by Japan.

"The negotiations have started to irk even the most loyal supporters of the agreement, who are beginning to think that the price for France is too high," the paper says.

Russian Defense Minister Anatoly Serdyukov was cagey on Wednesday about a timeframe for the contract, saying it would be signed when it was ready.

"At present negotiations are ongoing on only two ships," he said after his working visit to France on Tuesday.

Russia is interested in two ships on which the French would be under formal obligation to provide post-sales servicing, Serdyukov said.

Russian Deputy Defense Minister Anatoly Antonov said last Tuesday a contract was unlikely to be signed in the foreseeable future.

According to some media reports, talks in early March between Rosoboronexport and France's DCSN company reached an impasse after France upped the price from 980 million euros to at least 1.15 billion euros for the first two ships.

Russia also wants the price of construction licenses and technical documentation to be included in the contract, while France insists they should be sold separately for an additional 90 million euros.

A Mistral-class ship is capable of carrying 16 helicopters, four landing vessels, 70 armored vehicles, and 450 personnel.

Russia, France struggle over Mistral contract

A Russian-French contract on the construction of Mistral class helicopter carriers for the Russian Navy is unlikely to be signed in the near future, a Russian deputy defense minister said.

Russia and France in January signed an intergovernmental agreement to jointly build two Mistral-class helicopter carriers at the STX shipyard in Saint-Nazaire, France. Another two are planned to be constructed later at the Admiralty Shipyards in St. Petersburg.

However, the sides have since experienced difficulties in agreeing the terms of the actual contract between Russian state-arms exporter Rosoboron export and French DCSN company.

"The negotiations have not been easy so far, I would even describe them as tough," Anatoly Antonov told reporters in Paris on Tuesday during a visit of Russian Defense Minister Anatoly Serdyukov to France.

"It is too early to talk about specific dates, and too many technical details have yet to be settled. The contract must be adapted to our conditions. Experts will have to do a difficult and skillful job to adjust all parameters of the future contract," Antonov said.

The official added that Russia prioritized the purchase of Mistrals with full technology transfer. The overall price of the contract was also a "big issue," he said.

According to Russian media, the initial talks in February reached an impasse after France increased the total price tag from 980 milllion euros to at least 1.15 billion euros for the first two ships to be built in France.

In addition, France insists on signing a separate contract for licensed construction of two Mistrals in Russia.

Antonov said Russia would not push for a quick conclusion of negotiations because their results must meet the interests and requirements of both sides.

A Mistral class ship is capable of carrying 16 helicopters, four landing vessels, 70 armored vehicles, and 450 personnel.

Russia plans to deploy the first two Mistral ships in the Pacific to protect the four Kuril Islands, which Russia has disputed with Japan since World War II.

Russia to expand participation in Mistral shipbuilding project

Russia will expand its participation in Russian-French shipbuilding project on four Mistral class assault landing ships, said Roman Trotsenko, president of United Shipbuilding Corporation (USC). 

He reminded that execution of Russian-French shipbuilding agreement had started in Nov 2010. 

"In total, France must deliver four ships to us. Our shipbuilders seek to expand their participation in staff training and to engage people into the project implementation", pointed out Trotsenko. 

According to his appraisals, Russia's participation in building of the first ship would be 20%, the second one – 40%, the third one – 60%, and the fourth one – 80%. "Mistral constitutes no technical difficulties", said Trotsenko. "This ship is by no means a retaliatory weapon. Personally, I'm much surprised by a boom around this issue. That's nothing but a transport vessel", said Trotsenko. 

As for USC president, this project could be realized by Admiralteyskie Verfi shipyard. "It would take our shipbuilders 36 months to implement this project", specified he. 

"There's no point to invent a wooden bicycle, because Mistral project has been well-designed by experts from France, Spain and other countries", said Trotsenko. "What we have to do is to take their technology and master it in Russia", underlined USC president. 

Answering the question of ITAR-TASS about the contract cost, Trotsenko said: "We're not concerned with this, that's job of Rosoboronexport".

Russian-French talks on Mistral have reached a deadlock – Kommersant

Russian-French negotiations on procurement ofMistral class helicopter carriers have reached a deadlock, in particular, because of disagreement in price; contract cost may increase from EUR 980 mln to at least EUR 1.15 bln, reports Thursday'sKommersant. 

"Russia is ready to pay for both Mistrals not more than EUR 980 mln, but France insists on the minimal price of EUR 1.15 bln", writes the newspaper. Meanwhile, neither Rosoboronexport nor Federal Service for Military Technical Cooperation (FSMTC) nor Ministry of Trade and Industry nor United Shipbuilding Corporation agreed to give any comments. 

According to Kommersant, the reason for discords is "Russian defense ministry's amateurish approach to the contract". During negotiations Russian party offered to include the costs of license and technical documents for some parts to be constructed in Russia. (Supposedly, Admiralteyskie Verfi shipyard would be a subcontractor and perform 20% works on the first ship and 40% - on the second one). However, French party refused to include licenses and technical documents into the contract cost. 

In Dec 2010 Russian Navy Deputy Commander-in-Chief Vice Admiral Nikolai Borisov signed a protocol with France specifying the contract cost as EUR 1.15 bln; it included prices for two ships (EUR 980 mln), some logistic expenditures (EUR 131 mln), and crew training (EUR 39 mln). 

"Nikolai Borisov signed this protocol not coordinating with Rosoboronexport and FSMTC", writesKommersant. "And when French defense ministry and DCNS presented the protocol to Russian delegation, it came as a surprise". 

Thus, France evaluates cost of licenses and technical documents for two ships which are not included to the overall contract cost as EUR 90 mln. France is ready to afford technical documents for free (evaluated as EUR 40 mln), if Russia undertakes definite obligation to purchase two Mistrals more. 

According to Kommersant, delegation of Rosoboronexport, FSMTC, Ministry of Trade and Industry, andUnited Shipbuilding Corporation spent the last week in Paris negotiating with French defense ministry andDCNS about Russia's procurement of two French helicopter carriers. 

"Russia will receive France's definitive commercial offer on Mistrals on March 15", writes the newspaper referring to own sources. Note that reconciliation of the price could need "additional talks with French president Nicolas Sarkozy". However, it is still uncertain who will conduct negotiations – president Medvedev or premier Putin, writes Kommersant. Besides, Putin's press secretary Dmitry Peskov said to Kommersanthe had heard nothing about discords on Mistral contract". 

Procurement and construction of Mistrals will be held under State Arms Program 2011-2020. 

Russia and France officially declared late in Dec 2010 that the consortium of United Shipbuilding Corporation (Russia) and DCNS (France) would build two Mistral class ships in Saint-Nazaire (France), and other two – under license in Russia. The tender was issued in Oct 2010 by Russian defense ministry. 

Intergovernmental agreement on procurement of Mistrals was tied on Jan 25 in Saint-Nazaire. It stipulates neither terms nor cost of the future contract; they will be specified in another agreement which is to be signed by Rosoboronexport and DCNS in Apr 2011. 

Assault landing ship Mistral has displacement of 21,000 tons; overall length is 210 meters; speed is over 18 knots; fuel range is up to 20,000 miles; crew is 160 plus 450 marines; air wing includes 16 helicopters, six of them can be simultaneously placed on the flight deck.

France-Russia sign Mistral warships deal

France on Tuesday inked a lucrative agreement to sell four Mistral warships to Moscow, with two to be built in Russia, in a move bitterly opposed by ex-Soviet statesin the Baltics.

The deal for the amphibious assault ships will be the first sale to Russia of such technology by a NATO country.

France's NATO allies -- in particular Lithuania, Latvia and Estonia -- have expressed concern about arming Russia with modern Western weaponry.

Leaked diplomatic cables showed that US Defence Secretary Robert Gates also raised Washington's concerns while on a visit to Paris last year.

The deal was announced while President Nicolas Sarkozy was visiting the STX naval shipyards in the western port of Saint-Nazaire where the vessels will be built in partnership with France's state-owned military contractor DCNS.

"The governments of the two countries agree to give their full support to the construction of two (warships) in France and two in Russia," said a joint French-Russian statement released by the French presidency.

Sarkozy told shipworkers in Saint-Nazaire that the deal represented six million hours of work and 1,500 jobs over four years.

A previous deal announced late last month concerned the construction of two Mistrals in Saint-Nazaire and mentioned the possibility of building two more.

The deal unveiled Tuesday did not mention how much technology France would transfer to the Russians to enable them to build the ships, nor did it mention how much the ships were being sold for.

France has been negotiating with Russia since 2009 on the deal to sell Moscow the Mistral, which is priced at around 500 million euros (680 million dollars).

Russian state shipbuilder OSK boss Roman Trotsenko told Interfax news agency that the unit price agreed was "less than 600 million euros."

STX shipbuilder said the first Mistral would be delivered in December 2013 and would be 80 percent built in France and 20 percent in Russia.

A Mistral-class ship can carry up to 16 helicopters, four landing craft, 13 battle tanks, around 100 other vehicles and a 450-strong force. It has facilities for a full command staff and is equipped with a 69-bed hospital.

The Russian army has said such a ship would have helped it win its August 2008 war with ex-Soviet neighbour Georgia within hours rather than days.

Lithuania, Latvia and Estonia -- states ruled by Moscow until 1991 -- have repeatedly criticised France's plans since Paris began negotiating the warship sale.

The Kremlin only withdrew its troops from their territory in 1994, three years after they won independence when the communist bloc collapsed.

The three states, with a combined population of 6.8 million, still have rocky relations with Russia, notably since they joined NATO and the European Union in 2004.

Senior Republican US Senator John McCain sharply condemned the sale of the four warships, calling it "a threat to some of America's friends and NATO allies."

"I strongly oppose France's sale of the Mistral to Russia," he said.

"This ship is a threat to some of America's friends and NATO allies, and I worry that this decision could set a troubling precedent within NATO of advanced weapons sales to the Russian government," said McCain.