DEFENSE NEWS: DTN News - DEFENSE NEWS: Russian Shipbuilders, Military In Conflict Over Mistral Deal

Tuesday, February 8, 2011

DTN News - DEFENSE NEWS: Russian Shipbuilders, Military In Conflict Over Mistral Deal

Defense News: DTN News - DEFENSE NEWS: Russian Shipbuilders, Military In Conflict Over Mistral Deal

Source: DTN News - - This article compiled by Roger Smith from reliable sources Ria Novosti

(NSI News Source Info) MOSCOW, Russia - February 8, 2011: Russia's United Shipbuilding Corporation (USC) has been taken out of the contractual talks with France on the purchase of Mistral class amphibious assault ships, a Russian business daily said Tuesday.

The Kommersant newspaper cited anonymous defense industry sources as saying state-run arms exporter Rosoboronexport will represent Russia in direct talks with France's DCNS from now on.

Kommersant speculates that the removal of the USC from the talks could be the result of the company's aspirations to acquire a status of an "independent dealer" on the lucrative arms exports market.

Rosoboronexport, backed by the Russian Defense Ministry, has almost monopolized Russia's arms exports and apparently does not want new players to bite into its share in enormous profits from growing arms sales, which totaled $10 billion in 2010.

Moscow and Paris signed on January 25 an intergovernmental agreement to jointly build four Mistral-class helicopter carriers for the Russian Navy.

Russia's input to the construction of the first Mistral-class warship will be 20% and 40% in the second.

The third and fourth ships are to be built in Russia, whose share of labor input will subsequently rise to 80%.

The talks on the actual contract to build Mistral ships are still underway. The Russian Defense Ministry earlier said the contract could be signed in April-march this year.

Under the Russian-French agreement the first Mistral-class ship, with a price tag of 720 million euros, is expected to be built in late 2013-early 2014 and the second in late 2014-early 2015.

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

A number of Russia's neighbors have expressed concern over the upcoming deal, in particular Georgia and Lithuania.

However, the first two Mistral class ships will most likely join Russia's Pacific Fleet with an obvious task to protect the disputed Kuril Islands.