Only summit talks can save the Mistral contract

12.04.2011 Negotiations on the Mistral contract is deadlocked because of non-favorable configuration of the ships and numerous blunders made by Russian party, reports Vedomosti referring to a presidential spokesman and a defense ministry's officer.

According to the newspaper, ship configuration unfavorable for Russia was agreed upon in the very beginning of negotiations; delivery of communication aids and control systems is not provided either. Besides, according to the tentative agreement, the contract does not include construction of third and fourth ships in Russia, crew training, and technology transfer.

The only solution for this problem can be found at the summit level, reports Vedomosti. Supposedly, Russian president Dmitry Medvedev would meet with his French counterpart during the G20 Summit to be held in May 2011 in France.

According to the joint statement made by Russian and French presidents in Dec 2010, Russia will purchase two Mistral class assault landing ships in France and construct other two at domestic yards under French license. Preliminary talks were held by Russian defense ministry; then it agreed with Rosoboronexport which represents Russia in negotiations since 2011.

All blunders were made at preliminary stage, say sources of Vedomosti. As for the presidential spokesman, the protocol signed last year by Russian Navy's director for armaments Vice Admiral Nikolai Borisov in the presence of Vice Premier Igor Sechin provided the sum of EUR 890 mln which does not include charges for technology transfer and shipborne control systems. This would cost Russia another EUR 200 mln, says the source.

Vice Admiral N. Borisov was dismissed by presidential decree late in March. Russia's leadership consider current Deputy Defense Minister for Armaments Vladimir Popovkin also responsible for blunders in negotiations; he may also leave his office, said the official.