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Russia to fully pay for Mistral contract after 2nd ship delivery

August 12, 2014, 18:25 UTC+3 MOSCOW

Final settlements under the contract will be made in November 2015 after the delivery of the second ship

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© ITAR-TASS/Mikhail Ognev

MOSCOW, August 12. /ITAR-TASS/. Russia will pay France in full under the contract for the construction of Mistral-class helicopter carriers only after the delivery of the second ship, the head of the Russian state-run arms trader Rosoboronexport said on Tuesday.

“Final settlements under the contract will be made in November 2015 after the delivery of the second ship,” Rosoboronexport head Anatoly Isaikin said.

The Rosoboronexport chief executive rejected as untrue the reports that the technology for the construction of Mistral-class helicopter carriers would be fully transferred to Russia after a contract for another two ships was signed.

“It is stipulated that all these technologies may be used for the construction of combat ships on the territory of Russia for the Russian Navy. Their transfer is not in any case linked with the implementation of the projects for the construction of the third and fourth helicopter carriers,” the Rosoboronexport head said.

Under the contract signed between Russia and France, Russian enterprises will obtain technologies for construction of the helicopter carrier’s hull, information and communication control systems, the Rosoboronexport head said.

Work is proceeding in strict compliance with the schedule, he said. “The French side is honoring its contractual obligations in full,” the Rosoboronexport head said.

Mistral warship deliveries exempt from value added tax

Russian President Vladimir Putin signed a law in late July exempting the deliveries of France’s Mistral-class helicopter carriers to Russia from VAT payments.

The law on VAT exemption, which will be in effect from July 1, 2014 to June 30, 2016, was adopted to prevent an increase in the cost of the contract on Mistral ship deliveries signed between France and Russia.

Russian Deputy Finance Minister Sergei Shatalov said earlier that “the contract with France would be completed” by June 30, 2016 and the Mistral helicopter carriers would be delivered to Russia.

He also said that the Mistral deliveries had already been exempt from an import customs duty until June 30, 2016.

The Mistral issue was in the focus of attention in late July when the United States started to exert strong pressure on France, urging it to give up the Mistral warship deliveries to Russia amid persisting differences between Washington and Moscow over developments in southeast Ukraine.

However, French President Francois Hollande said that France would fulfill its obligations for the construction of the first Mistral-type warship and would hand it over to Russia on time.

Hollande said that work on the second Mistral warship would depend on Moscow’s stance on the Ukraine crisis.


Mistral contract

The €1.12 billion contract for building two Mistral-type ships was signed by the Russian defense exporting company Rosoboronexport and French DCNS in June 2011.

Under the contract, Russia is to receive the first of the two warships, the Vladivostok, in October-November this year. The second Mistral-class helicopter carrier, the Sevastopol, is expected to be handed over to Russia by the end of the next year.

The Mistral-type helicopter carriers have a displacement of 21 tons, the maximum body length of 210 meters, the speed of 18 knots and the range of up to 20,000 miles.

The crew is 170 members, and in addition it can take on board 450 people. Each ship is capable of carrying a fleet of 16 helicopters. Six of them can be simultaneously deployed on the flight-deck. The cargo deck can accommodate more than 40 tanks or 70 motorized vehicles.

Mistral landing helicopter carriers are capable of performing four tasks at the same time: receive helicopters, land troops, and act as a command post and a floating hospital.

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