France offers bid to terminate Russia warships contract

Paris has reportedly submitted a proposal to Moscow officials on ways to cancel a contract for the delivery of two Mistral-class warships to Russia.

According to the proposal, Paris will reimburse USD 865 million to Russia, but will be allowed to sell the vessels to any third party, Russian newspaper Kommersant reported on Friday, citing military and technical sources close to the Russian government.

The Kremlin has disapproved of the proposal, saying that France’s proposed reimbursement is USD 113 million (100 million euros) less than Russia’s earlier payment, the report said.

All in all, the breach of contract will cost Russia over USD 1.32 billion, the Kremlin added.

The Russian officials also stressed that Moscow will issue no permit for the re-exportation of the warships before the French side covers for the whole amount of losses, according to the report.

On April 22, French President Francois Hollande suggested refunding Moscow for the two helicopter carriers in return for the termination of the deal.

France has come under fire for its politically motivated decision to cancel the deal with Russia with critics saying the measure would deprive Paris of a huge sum of profit.

“Instead of bringing the French ship building cooperation DCNS a profit of €1.2 billion and those involved in the construction €980 million, the cancellation of the deal could cost France between €2 billion and €5 billion,” read an article in French weekly Le Point on Thursday.

Back in November, the French government suspended the military transaction with Russia over Moscow’s alleged role in the Ukrainian crisis.

Based on the 2011 deal worth USD 1.5 billion,  the first warship, the Vladivostok, and the second, the Sevastopol, were due to be handed over to Moscow in November 2014 and next year, respectively.

The West accuses Moscow of supporting pro-Russia forces in east Ukraine, saying the Russian intervention poses a security threat to Ukraine and all other neighboring states. Russia has strongly denied the allegations.

The two mainly Russian-speaking regions of Donetsk and Lugansk in eastern Ukraine have been the scene of deadly clashes between pro-Russia protesters and the Ukrainian army since Kiev’s military operation started in April last year in a bid to crush the protests.

In May 2014, the situation in the two flashpoint regions started to worsen as residents overwhelmingly voted for independence from Ukraine and joining the Russian Federation in a referendum.

FNR/NN/HMV

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