Negotiations specific despite pressure by Russian shipyards, Baltic states

10:02 GMT, September 9, 2010 defpro.com | According to the French Ministry of Defence, Russian Foreign Minister Sergey Lavrov and Defence Minister Anatoly Serdyukov met with their French counterparts on 7 September to continue negotiations for the purchase of Mistral-class vessels by Russia, among other political issues. Since Russia expressed its interest in buying a number of these French-built amphibious assault ships (Bâtiment de Projection et de Commandement, BPC) in August 2009, negotiations and meetings have taken place on different occasions. However, Lavrov confirmed this week that the negotiations are continuing, with talks becoming increasingly specific. He further emphasised that the proceedings now focus on the transfer of technology.

The Mistral-class amphibious ships can rapidly deploy a large number of troops, vehicles and helicopters to any coastal area in the world. Thereby, it is a powerful asset for operations abroad. In numbers, it can transport 16 helicopters, four landing barges, up to 70 vehicles, including 13 main battle tanks, and 450 soldiers. In parallel, the 200 metre-long vessel can accommodate an entire operational headquarters for joint operations as well as a medical centre.


A common problem

While the bilateral dialogue on this possible multi-billion dollar defence deal continues, RIA Novosti and Kommersant reported in mid-August that Russia allegedly “backed out” of the negotiations with France and plans to hold a tender for the construction of these ships, which will allow Russian industry to participate in the competition. This move came after complaints by United Shipbuilding Corporation (USC) were voiced about the Defence Ministry’s reluctance to allow Russian shipyards to compete with foreign shipbuilders for such a contract.

During his meeting with his French counterpart, Lavrov explained that Russia had to issue a Request for Proposals, as is required by law. However, no side wanted to leave the impression that this would compromise the “exclusive negotiations.” According to Kommersant, the USC has offered to build the ship for $500 to $700 million, which is higher than France's price of some $430 to $580 million (see http://www.defpro.com/news/details/17688/).

Thus, Russia faces the same problem as many Western countries have had to deal with during the past decades: buy cheap abroad or buy expensive at home and support ones national industry? Russian defence experts have long warned that the national defence industry’s capabilities lag behind those of Western states, making it hard for companies – often originating from fully state-run firms – to remain competitive on an international level. In order to give national industry a boost, Russian President Dmitry Medvedev approved, in March 2010, a long-term policy for the development of the national defense industry. Together with a new military doctrine, issued in February 2010, Russia’s political leadership launched a major effort to modernise its armed forces, also hoping that this might entail a significant boost for the Russian defence industry.

However, Medvedev is well aware of the fact that the ability to innovate is required to support any modernisation effort. Already in late 2009, he called for the support of the defence industry to ensure the effective modernisation of the military and provide it with state-of-the-art weapons. In August, the Russian president stated: “To retain our competitive position on the weaponry and special equipment market, we must actively modernise our military-industrial complex, introduce innovative technologies and new management methods, and attract young, talented professionals.”

Defence experts warned that, without the industry’s effort to advance its own capabilities, “the Russian defence sector will sooner or later run into a brick wall.”


Baltic concerns

Of all places, one of the USC shipyards that would be involved in the construction of the amphibious vessels is located in Russia's Baltic exclave of Kaliningrad. Although it is not the site of the construction that worries Russia’s Baltic neighbours, the protests by numerous Baltic politicians against the sale of French warships to Russia, seen as a threat to the sovereignty of the Baltic states, have been loud. Already in late 2009, Latvia expressed repeated concerns about the possible Franco-Russian deal. Latvian officials indicated that if Russia purchased such a ship and placed it in the Baltic Sea, Latvia would have to revise its state defence plan from a military threat and state security point of view.

The hopes of Lithuanian Minister of National Defence, Ms Rasa Jukneviciene, that the ‘Mistral case’ would “encourage the EU and the UN to apply the strategic goods export related provisions in a more constant and transparent way,” may be answered, to some extent, by the European Parliament Strasbourg. In its Wednesday session it introduced the Parliamentary question of arms exports in the Common Foreign and Security Policy. Latvian Defence Minister Imants Liegis welcomed this development and said: “I believe that such strategic and military issues as the sale of the latest military equipment to third countries should be discussed with NATO partners and EU member states prior to making the decision.” The Baltic states’ common fear has been that their protests and concerns are being ignored within NATO. Hence, Liegis emphasised yesterday: “NATO and EU efforts to improve their relationship with Russia must not take place at the expense of the Baltic region’s security.”


----
By Nicolas von Kospoth, Managing Editor