Putin, Hollande officially cancel Mistral contract, Paris to pay less than €1.2bn

© Stephane Mahe
Russian President Vladimir Putin and French President Francois Hollande have reached an agreement to cancel the contract for two Mistral helicopter carriers. Paris will pay Moscow all the costs for the canceled contact – the sum will be less than €1.2bn.

"Talks between President Putin and President Francois Hollande concluded yesterday. There is no further dispute on the matter," French Defense Minister Jean-Yves Le Drian told France’s RTL radio.

He added that the two Mistral ships cost €1.2bn ($1.3bn), but Paris will pay less as the helicopter carriers were not finished.

Le Drian added that there are “many countries” willing to buy the Mistrals because the ships are “well-constructed.” RTL cited various sources saying that India and Canada are reportedly interested in purchasing the helicopter carriers.

On Wednesday, the Russian president's press service said the parties agreed that Russia will be reimbursed what it had already paid under the contract. This includes all its equipment and materials. 

"France has already transferred these funds and, after the return of equipment, will acquire ownership and be able to take charge of both ships," the Russian president’s press service said.

“Moscow considers the Mistral issue completely resolved.

Russia plans to send a team of experts to France to remove the equipment installed on Mistral helicopter carriers in September.

“A team of specialists is currently being prepared for the dismantling of the communications equipment from the helicopter carriers. Their departure for France is planned for this September,” an anonymous Russian official told TASS.

The Mistral contract worth €1.2 billion that was signed by the French DCNS/STX Company and Russian Defense Export Corporation Rosoboronexport in 2011 envisaged delivering two French helicopter carriers to Russia, with the first one to be delivered in 2014 and the second one in 2015.

However, the French government decided not to hand the vessels over to Moscow after it came under intense political pressure from the US and its European allies following Crimea’s reunification with Russia and the outbreak of armed conflict in eastern Ukraine.

Despite the protests of workers involved in the construction of the vessels, French Defense Minister Jean-Yves Le Drian said in November that France would not deliver Mistrals to Russia, “even if it cost the country €1.2 billion ($1.3bn).”