Tag Archives: France

Does That Box Come With Electronics?

The latest Mistral story is more complex than what you’ve probably read so far.

Russian press services report a highly-placed military source claims Paris has “registered” Moscow’s demand for systems and equipment on Mistral that fully satisfy the Russian Navy’s requirements.

Media sources also say the negotiations foresee a state contract for the provision of two Mistrals, spare parts, instrumentation, and essential operator documentation, as well as equipment, services, and construction documentation needed to build two more Mistrals in Russia.

A source also told the wire services preparation for the acquisition of Mistral “is going logically and systematically” within the bounds of the negotiating process with the French side.

Newsru.com, by contrast, claims this is the Defense Ministry’s way of countering reports that Moscow has decided not to buy Mistral since France is trying sell Russia “empty boxes” for a billion euros. 

Newsru is referring to Vedomosti’s story from earlier this week saying the entire Mistral deal is under threat because the ships’ outfitting is unacceptable to Russia since it doesn’t include modern command, control, and communications systems, and is only a “basic variant” of the ship, a “box without electronics” essentially.

Newsru recaps Tuesday’s Vedomosti:

“. . . the preliminary agreement actually didn’t include the construction of two more ships in Russia, or crew training and the transfer of shipbuilding technologies.  As “Vedomosti” stated with reference to sources in the Presidential Administration and the RF Defense Ministry, the negotiations with the French have reached a dead end, and now resolution of the problem is being sought at the political level.”

On the issue of providing C3 systems (specifically, Senit 9 and SIC-21) on-board Mistral, Vedomosti implies it’s more about money than technology transfer.  Russia can either pay an extra 200 million euros for a full electronics fit, or try to argue at the political level for the ships at the price of 890 million euros which was supposedly on the protocol signed late last year by now-retired Vice-Admiral Nikolay Borisov and Deputy PM Igor Sechin.  Other sources have said Borisov and Sechin exceeded their mandate in agreeing to a price well over 1 billion euros.  We don’t really know what was on that protocol.

The point – overlooked by many including yours truly – is that there’s no real contract for Mistral yet, and it’s a long way off.  All there are so far are protocols, agreements, and understandings.  What was signed in January at Saint-Nazaire was an “intergovernmental agreement” for the possible construction of two Mistrals, not a specific contract covering that and the construction of two more in Russia.

Wednesday Interfaks.ru ran its review of the Mistral story concluding that the negotiating process is difficult, but the French have decided to meet Russia’s requirements.

Interfaks also published something else that might be useful when thinking about Mistral:

“Meanwhile in mid-March, Deputy Defense Minister Anatoliy Antonov, who’s overseeing international cooperation issues, told journalists in Paris that Russia doesn’t intend to force the signing of the contract for the purchase of the French ‘Mistral’ helicopter carriers until it’s determined that all technical parameters won’t impinge on the Defense Ministry’s interests.  ‘It’s early to talk about dates, too many technical details have to be decided.  The contract has to be adapted to our conditions.  Complex expert professional work in the verification of all parameters of a future agreement is going on,’ said the Deputy Minister.  And he noted talk about how all technical nuances are reflected and have been laid down in the contract.  ‘The negotiating process is complex, I would say difficult,’ said Antonov.  He added that, essentially, the negotiations have just begun.  ‘We have to discuss the entire complex of issues.  The task of acquiring ships and their technologies has been given to us.  That’s the most important thing,’ said the Deputy Minister.  In his opinion, an important part of the negotiating process is ‘the contract’s price.’  ‘It’s important to understand that on the issue of buying Mistral type ships agreements were reached at the level of the presidents of the two countries, and negotiators have all necessary authorities and instructions.  We have to work calmly and implement all agreements,’ said Antonov.  He noted that now it’s essential that all agreements ‘be put on paper and to reflect the political agreements of the two presidents in figures so that they meet the interests of the two countries.’”

A professional diplomat and negotiator is never going to say a process is easy, and this one isn’t.  But it does sound like there’s a draft contract, while price and exactly what the presidents agreed remains at issue.

Cablegate on the Mistral Sale

In case you missed it in Wikileaks, the U.S. Defense Secretary discussed many important topics with his French counterpart in early 2010, and France’s plan to sell the Mistral to Russia among them, though it may have been one of the less urgent issues.

What you read is the dialogue of allies respectfully sharing differing views of the situation and its significance.  It’s interesting for Defense Secretary Robert Gates to say it’s not Russia’s capability the U.S. worries about, but about sending the wrong signal to new allies on Moscow’s doorstep.  His French counterpart argues for Mistral as a tangible sign of the benefits of Russian partnership with the Western allies.  He concedes the ship is intended for power projection, but argues this single ship [well, two plus the plans for two more] won’t change Russia’s capabilities much given the poor condition of its naval production infrastructure.

————–Russia/Mistral                                                                                                                           ————–

18. (S/NF) SecDef expressed U.S. concerns about the Mistral sale to Russia.  He told Morin that because of Sarkozy’s involvement in brokering a ceasefire in Georgia, which Russia was not fully honoring, the sale would send the wrong message to Russia and to our Allies in Central and East Europe.

 19. (S/NF) Morin told SecDef pointedly that he had pushed hard for the sale.  He conceded that it was indeed a warship for power projection.  But Morin asked rhetorically how we can tell Russia we desire partnership but then not trust them.  Morin told SecDef that he understood the U.S. position on considering Central and East European Allies’ concerns about the perceived threat from Russia.  Morin argued, however, that this single ship would not make any difference with respect to Russian capabilities, as Russia’s naval production ability was severely degraded.

 20. (S/NF) SecDef replied that U.S. concerns were not about military capacity but about messaging.  Some allies, because of their past experiences, are still very concerned with Russia and are not sure how much to trust the West.  SecDef observed that Russian democracy has disappeared and the government was an oligarchy run by the security services.  President Medvedev has a more pragmatic vision for Russia than PM Putin, but there has been little real change.

Tender for Helicopter Carriers May Just Be Formality

Mistral Schematic

Kommersant reports today that United Shipbuilding Corporation (OSK) has gotten the Defense Ministry’s permission to hold an open tender for procurement of helicopter carriers.  The paper concludes the Defense Ministry is refraining from a sole-source purchase of the French Mistral, and will consider similar proposals from OSK’s shipyards.  But the military [at least some military officials] haven’t hidden the fact that they prefer Mistral [but Defense Minister Serdyukov has always maintained they’ve been talking to other suppliers], so the tender could just be a formality. 

OSK President Roman Trotsenko says a special commission from the Ministry of Industry and Trade will conduct the tender, but details are sketchy.  A Defense Ministry source told Kommersant that, without a tender, a deal to buy a helicopter carrier [presumably Mistral] would be considered illegal.  So there won’t be a sole-source buy despite a year of government-to-government talks.

The paper reminds readers of OSK’s recent unsuccessful antimonopoly complaint in regard to the government’s consideration of Mistral.  Although the complaint was not reviewed, it must have had some impact on the decision to compete the helicopter carrier purchase.  Kommersant sources say OSK Board Chairman Igor Sechin also had something to do with it.

Trotsenko says far east shipbuilding plant ‘Zvezda,’ Petersburg’s ‘Admiralty Wharves,’ and Kaliningrad’s ‘Yantar’ will bid for the ships.  ‘Zvezda’ already has a joint venture in place with South Korea’s Daewoo – builder of the Dokdo helicopter carrier.  The OSK President says ‘Admiralty’ and ‘Yantar’ might work with ‘Northern’ shipyard or a foreign builder. 

Kommersant has a letter sent from Sechin to Prime Minister Putin this spring saying not only is Dokdo an alternative to Mistral, but Dutch and Spanish helicopter carriers are as well.

Trotsenko says OSK yards can build a helicopter carrier in 30 months for $500-700 million against a Mistral pricetag of €420-680 million.

Kommersant concludes the tender won’t end the conflict between OSK and the Defense Ministry.  Mistral will remain the latter’s priority.  The paper’s sources don’t know if the military wants to buy Mistral itself or place an order for a new unit in a French shipyard (STX).  OSK hasn’t been able to arrange a cooperative agreement with STX.

Mezhprombank-controlled ‘Northern’ and ‘Baltic’ shipyards will participate in the tender according to a representative of the bank. Kommersant’s sources think Mezhprombank, its owner Sergey Pugachev, and shipyards are the favorites among Russian contenders.  Pugachev was an early supporter of buying French, then building other units in his shipyards.  And, according to Kommersant, the Defense Ministry supports Pugachev.

Alongside Pugachev and Mezhprombank, OSK feels its chances to win the tender aren’t great.  Moscow Defense Brief analyst Mikhail Barabanov also says Mezhprombank yards are the favorites to build Mistral in Russia.  Such a deal’s been reached at a political level between Paris and Moscow, so the tender might just be a formality.  CAST’s Konstantin Makiyenko agrees.  But he thinks Mistral orders will go to ‘Baltic,’ since ‘Northern’ is loaded with frigate and corvette orders.  Meanwhile, OSK would like to buy both yards from Mezhprombank, but the sides haven’t reached agreement on a price.