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Disruption of contract on Mistral helicopter carriers envisages serious penalty sanctions

If the deal on helicopter carriers Mistral is annulled France's reputation on the world weapon market may be damaged strongly, chief editor of specific edition Export of Weapons Andrei Frolov told Itar-Tass on Tuesday.

"If a contract on Mistral is severed France may damage the country's reputation of a Western weapons supplier alternative to the United States," he said, noting that France's current reputation "will allow the country to work with different clients and maintain the country's defense industry at the highest level."

Meanwhile, if France cancelled the deal, the country would have to buy first carrier Mistral which was already produced, the expert said. "Meanwhile, it will be needed to do something with slight re-equipping of the warship according to Russian requirements. This will entail additional expenses," he noted. If the deal was broken future of second Mistral remained unclear in creation of which Baltic shipbuilding plant was involved, Frolov added.

For his part, deputy director of the Centre of Analysis of Strategies and Technologies Konstantin Makienko noted that along with lost profit France should bring back all advanced payments that Russia had already made on the contract and serious penalty sanctions may be imposed on the country. "This will be an absolutely political decision, but not force majeure circumstance and even if France refuses to pay, the Stockholm International Court of Arbitration is looming for the country that will have to pay all the same," he noted.

In general, "though helicopter dock-ships are certainly needed to form well-balanced naval forces, however, it is vitally important to build export-oriented ships - coast guard ships, frigates, corvettes for Russian fleet," the expert noted.

Paris may take this step in case of further escalation of the situation in Ukraine, French Foreign Minister Laurent Fabius said live on TV channel TF-1 on Monday.

In this regard, a source in Russia's United Shipbuilding Corporation told Itar-Tass that possible foiling of the contract for building two helicopter carriers Mistral entails serious penalty sanctions. "As for purely financial aspect of the issue, this should be noted that the 2011 contract envisages very serious penalty sanctions, if a party to the contract fails to fulfill its liabilities," the source said.

Russia has already paid more than half of the contract cost to France, the source said, noting these monetary funds had made around 700 billion.

The contract at the cost of 1.12 billion euro for construction of helicopter carriers Mistral for Russia's Navy was signed in the Russian city of St. Petersburg in June 2011. The deal envisages construction of two first warships at shipyard STX in France's Saint Nazaire. First Mistral-type carrier Vladivostok was set afloat and will be put into service for Russia's Navy at the end of 2014, second same-type warship Sevastopol -- in 2015. Construction of third and fourth Mistral carriers in Russia should be decided upon results of service of Vladivostok and Sevastopol.

Aft assembling for second helicopter carrier Mistral continues at Baltic shipyard in the city of St. Petersburg, a nose of the warship is being mounted in France's Saint Nazaire at the same time. Aft is planned to deliver by sea from St. Petersburg to France in July.

Helicopter carriers Mistral have a water displacement of 21,000 tonnes, maximum hull length of 210 meters, speed of up to 18 knots (33.3 kmph), and voyage distance of up to 20,000 nautical miles (37,040 kilometers). The warship's crew is 170 strong and the warship can take 450 people onboard in addition. The deck grouping includes 16 helicopters, six of which can be deployed simultaneously at the take-off deck. The freight deck can admit more than 40 tanks or 70 vehicles.

Mistral can fulfill four missions at the same time: station helicopters, land forces on the ground and act as a command post and a floating hospital.

[Source: Itar Tass, Moscow, 18Mar14]

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