Russia Mistral: France 'agrees warship compensation'

France has agreed to pay compensation to Russia for cancelling the sale of two warships, a Russian official says.

France stopped the sale after the outbreak of the conflict in eastern Ukraine, where Russia is accused of backing separatist rebels.

The Mistral contract was worth €1.2bn (£843m; $1.3bn). Russia made an advance payment of about €840m.

The first of two helicopter carriers - the Vladivostok - was supposed to be delivered to Russia in November 2014.

"The negotiations are completely finished, everything has already been decided, both the time-frame and the amount," said Vladimir Kozhin, an aide to Russian President Vladimir Putin.

Western sanctions have been ratcheted up against Russia since March 2014, when the Ukrainian conflict erupted, with Russia's annexation of Crimea.

"I hope that in the very near future an agreement will be signed on breaking the contract, and then the sum that France will pay us will be announced," Mr Kozhin was quoted as saying.

Sources close to the talks, quoted by Russia's Kommersant daily, say France will compensate Russia to the tune of €1.16bn.

That sum includes the amount that Russia has already spent on special training for 400 sailors, on port infrastructure in Vladivostok for the two warships and on developing four prototype Ка-52К helicopters.

Thank You for posting this, I was hoping for an update on this story.

I did figured that France would pay Russia for the Ships.

Now the Big Question is. What becomes them?

If the French/U.S. and our Allies were smart, they would find a friendly country to sell them too.

The lettering inside them would have to be changed, I assume they are in Russian.

But Canada could use a couple of ships like these, Maybe Australia.

Japan could put them to work as could South Korea.

Australia is out of the market since they have two Spanish-designed ships all set for delivery, unless they plan to double their LHD fleet with two ships of a different design (and associated logistics).

Japan and South Korea are building/have built similar ships. So little reason for them to import. That leaves the likes of Canada, Brazil, and probably India that have a need for similar ships. The Russians wanted customization of these ships for Arctic conditions, so that kind of suits Canadian requirements.

The question I have is whether France has a right to adjust payment for the advanced technology they had transferred to Russia. The program was not just about building the two ships, but also transferring know-how to Russia for them to 'roll their own,' and this was done to a large extent. France's DCNS ship-building corp transferred three advanced technologies - two of them have not been revealed publicly yet, but the third is the large-block assembly used to make the Mistrals.

Thus, while France is paying Russia for not delivering the ships, shouldn't France adjust the cost somewhat for the advanced technologies transferred to Russian military ship-building complexes? Because, while Russia didn't get the ships they got something more important ...the know-how. That should reduce the compensation to Russia. At least in my opinion.

Just to show how important know-how can be. Remember how Toshiba 'mistakenly' sold advanced propeller milling equipment to the Soviet Union in the early-mid 1980s. Toshiba, through some Norwegian company and apparently connected to the Walker spy ring, sold that equipment to the USSR, and the result of that ONE exchange was Soviet submarines going from being extremely noisy (and easy to track, particularly broad-band acoustic/noise) to being quieter than the Los Angeles and Improved Los Angeles submarines (fortunately the Sea Wolf and Virginias are substantially quieter than anything the Russians have). But my point is, a single transfer of technology can be quite a big thing, and while the ship-building know-how is not as big to Russia as the sale of the propeller milling equipment was (after all, Russia can, and does, build large ships ...just not as efficiently), it is still something that has a Dollar-cost, and that maybe the French should adjust for.

Just saying ...

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