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Compensation for Mistrals exceeds Moscow’s payment under contract 3 times — deputy PM

Russia has solved the problem with Mistrals with a great benefit, Dmitry Rogozin notes

MOSCOW, December 30. /TASS/. The amount of payments that France made for suspending the contract on delivering Mistral helicopter carriers to Russia has exceeded three times the cost for Moscow under the agreement, Russian Deputy Prime Minister Dmitry Rogozin told Rossiya 24 TV channel in an interview broadcast on Wednesday.

"If we calculate in rubles the sum that we paid and payments were received back, the second sum exceeds the first by three times, by the way," Rogozin said.

The outgoing year turned out to be very important from the point of view of resolving many complicated legal cases. "We have solved the problem with Mistrals with a great benefit for us," he noted. The payment that France made is very considerable for the budget, he stressed adding that this did not have a strong effect on good relations with Russia.

The €1.12 billion contract for the construction of two Mistral-type helicopter carriers for the Russian Navy was signed in June 2011. Under the contract, Russia was expected to receive the first of the two warships, the Vladivostok, in the autumn of 2014. However, Paris suspended the ship’s handover to Russia at the very last moment over Moscow’s stance on developments in neighbouring Ukraine. It was planned that the second ship dubbed the Sevastopol would be handed over to Russia in the second half of 2015. But the deal was suspended like in the case with the first Mistral ship.

After a long wait, Russia and France in early August reached an agreement to officially cancel the contract. The French government said in a release then, "the President of the Republic believed that it was not wise to increase the threat and to deliver these two ships" in connection with the situation in Ukraine. After the deal cancellation agreement, it was reported that France was selling both of the Mistrals, built for Russia, to Egypt. It paid about €950 million back to Russia for the dissolution of the contract, with the compensation including Russia’s advance payments totalling almost €900 million. "This has covered all of the costs sustained by Russia," the source said.

Under the deal, Russia gets the money and Russian equipment installed on the vessels back, and France will then be able to use the warships at its own discretion. French media earlier reported that Paris paid Russia €949 million for the Mistral contract cancelation, and the overall sum of payment exceeded €1 billion.