Updated: Russia to pay €1.37 Billion for Two French Helicopter Carriers

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Updated December 30, 2010: Following a tender held earlier in October 2010, the bid submitted by the consortium of France’s DCNS and STX teamed with the Russian naval yard OSK was selected as the winning proposal. As a result, France will construct two Mistral class helicopter carrying command vessels for the Russian Navy, with options to build two additional ships in Russia. The U.S. and the former Soviet Baltic States have expressed their concern of the Franco-Russian deal arming Moscow with modern Western weaponry. According to Russia’s news agency Novosti, Russia will pay €720 million for the construction of the first vessel. The second will cost €650 millions. Both ship will be constructed at STX shipyard in Saint-Nazaire, France. Another two will be constructed later at the Admiralty Shipyards in St. Petersburg.

Mistral Helicopter Carrier
The Russians wanted to buy up to four French Mistral ships. Photo: Novosti news agency

Originally published 19 August, 2010: The Russian Defense Ministry will hold a tender on the purchase of helicopter carriers, having backed out of negotiations to buy the Mistral-class helicopter carrier from France without a tender. Russia has been negotiating with the French shipbuilder DCNS about the procurement of two vessels, with options for two additional ships to be built by local shipyards. The estimated cost of the program could exceed US$2 billion – making this program one of the largest Russian shipbuilding programs in recent decades.

The decision to open the tender followed a complaint by the Russian United Shipbuilding Corporation (USC) to the Federal Antitrust Service, about the exclusion of local shipbuilders from competing for this program, a claim that gained the Russian Navy support. As a result, USC was officially invited to take part in the tender, to be announced next month. The tender is likely to involve other foreign shipbuilders in addition to the French.

While Russian and foreign bidders will seriously attempt to compete, it is likely that the tender will be ‘tailored’ to clear the ground for selecting the French offer. According to the Russian Daily Kommersant, USC has offered to build the ship for $500-700 million, while DCNS priced their vessels around $430-540 million. USC is realistic about its chance to win the program, and is setting the ground to join the French as a partner. Two of the USC subsidiaries are candidates for such JVs – the Admiralteyskiye Verfi  from St.Petersburg’s and the Yantar shipyard in Kaliningrad. A French delegation is expected to visit the Yantar shipyard this month to study the possibility of building Mistral class ships there. Another subsidiary of USC is the Zvezda Shipbuilding Company, based in the Far East, has already established a joint venture with South Korean Daewoo Marine Shipbuilding & Engineering, and will offer the Dokdo helicopter carrier.

USC is promissing it could complete the vessel construction within 30 months.