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Monday, January 3, 2011

The Franco-Russian Warship Deal

 Resuming our daily work after these days of festivity, an important event that one or another reader may have lost amidst the turbulent ending of the year, should be picked up at this point. A nice Christmas present for the French naval sector, the Russian President Dimitri Medvedev informed his French counterpart Nicolas Sarkozy that the Russian Defence Ministry decided to order two Mistral-class amphibious assault ships. The purchase of these French-built ships by Russia has been negotiated since Russia expressed its interest in August 2009. As defpro.com reported in September 2010, the Russian Foreign Minister Sergey Lavrov indicated that the negotiations were becoming increasingly specific.

To meet the requirements of Russian law, and answering protests from the United Shipbuilding Corporation (USC), Russia had to open a formal tender for the procurement of amphibious assault ships. However, no side wanted to leave the impression that this would compromise the “exclusive negotiations.” According to a Kommersant report last year, the USC has offered to build the ship for $500 to $700 million, which is higher than France’s price of some $430 to $580 million. The French offer was submitted by a consortium comprising the French naval defence company DCNS, which has already built and launched three Mistral-class vessels, and the USC.

As yet, there is no specific information about the contract value and a possible option for additional ships. However, Russia has been negotiating the option to build to additional ships under license. The first two ships will be built at the STX shipyard at Saint-Nazaire, France, with work on the first vessel scheduled to begin in 2011. DCNS is planning to complete construction of the two ships within 36 months, according to DCNS Director Pierre Legros.

Read more on DefPro

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