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France Unwilling to Pay Russia More Than 1Bln Euros for Mistral Deal Fail

Sputnik News

15:20 27.06.2015(updated 18:32 27.06.2015)

France is unwilling to pay Russia more than €1 billion for refusing to deliver Mistral helicopter-carriers, French magazine Challenges wrote.

According to the French media, the negotiations over the fate of the two Mistral ships are being held between head of the General Secretariat of Defense and National Security Louis Gautier, responsible for negotiations with Moscow on the issue, and Russian Deputy Prime Minister Dmitry Rogozin.

'The contract provides for a maximum fine of 250 million euros in case of a failure of the delivery [of Mistrals to Russia], but Russia demands return of 890 million euros it has already paid and 300 million as a compensation for the modernization of Kamov helicopters [modification of helicopters Ka-52 Alligator] and their ports,' Challenges wrote.

According to the magazine, the amount of the compensation is up to 1.2 billion euros, while France insists on a 'symbolic' one billion to 'sell' the news to media.

'There is one more difficulty: the Russian equipment already installed on the Sevastopol and Vladivostok needs to ships be restored, which will cost about 30 million euros per ship. Moscow also demands the right to inspect documentation about the future buyer of the ships, while Paris offers only 'consultations' with the Russian side.'

France and Russia signed the $1.5 billion Mistral deal in 2011. Paris agreed to deliver two Mistral-class helicopter-carriers to Russia. However, France suspended the delivery, citing Moscow's alleged interference in the Ukrainian crisis.

The deal was suspended in May and now France has to refund the money. Selling the ships to a third party is a complicated task, since France needs Moscow's permission to do so. Russia has repeatedly stated that it would not sign off on this, since Mistrals had been custom tailored for the Russian Navy making this an issue of national security.


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