Sunday, November 30, 2014

France risks losing Rafale contract with India over Mistral row??



The unnecessary row over Mistral ship, kicked up by France, is now entering tantalizing phase. Either France delivers the ships or risks losing its international reputation and lots of money in punitive damages along with jobs.

Mistral is an amphibious assault ship, also known as Helicopter carrier Ship. The ship is capable of carrying 16 helicopters, four landing craft, 70 armored vehicles and 450 troops. In addition, the ship is also equipped with field hospital. Three ships are in the service of French military and form a part of NATO's rapid reaction force. 

The deal was signed in 2010 by then Russian President Dimitry Medvedev and President Sarkozy of France. The deal was for two ships to be built in France and three more to be built in Russia. The ships were supposed to be delivered by October 2014.

But then came the chaotic events in Ukraine, the responsibility for which rests solely with US and its allies in EU. By citing the sanctions imposed on Russia by US and EU, France refused to deliver the ship by October 2014.

Russia has already threatened lawsuit and stands to gain $3 billion in fines and the return of the items used in building of the ship. Which means the ship will have to be torn apart. What a mess! But solely of Hollande's doing. 

  Mistral



Russian foreign minister Lavrov was spot on


SOCHI, November 26 (Sputnik) — France is responsible for the controversy around the delivery of two Mistral-class amphibious assault ships to the Russian navy, Russian Foreign Minister Sergei Lavrov said on Wednesday.

French President Francois Hollande announced on Tuesday the suspension of a $1.6 billion deal with Russia in light of Moscow's alleged role in the Ukrainian conflict.

"I don't want to comment on that. These are France's problems, not ours," Lavrov told reporters in Russia's Black Sea resort of Sochi.

"We are protected by contract. If France fails to meet its contractual obligations, the litigation process will not take long, I think," Lavrov said.
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It seems Russians are trying to knock some sense into President Hollande's head. They are trying to impress upon him not to damage long-standing Russian-French relations for the sake of the diktats of a hegemon in decline. They seem to be trying to make him understand not to damage his country's economy as well as employment situation, which is already terrible. But whether President Hollande develops any rational sense is another matter.


SOCHI, October 23 (RIA Novosti) - Russia will sue France if Paris refuses to honor a contract on construction of two Mistral-class helicopter carriers for the Russian Navy, Kremlin Chief of Staff Sergei Ivanov said Thursday.

"We will file a lawsuit and demand compensation [if the contract is not fulfilled], as it's commonly done in a civilized world," Ivanov told reporters.

"It's up to Paris to decide whether to honor the contract or not," he said.

"We share long-running history of Russian-French relations, and we would not want to see these relations being sacrificed for the sake of fleeting [political] trends, Ivanov added.
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(The emphasis supplied)


But every action has unintended consequences. And, the effects of Mistral row seem to have seeped into India's deal with France for 126 Rafale fighters worth $20 billion.

Consider thisreport.

..

France risks losing a contract to supply 126 fighter jets to India due to its refusal to deliver Mistral-class ships to Russia, a leading French analyst told the Delovoi Peterburg website. French officials said this week that they will not deliver the first Mistral-class amphibious warship that Russia had ordered as part of a $1.7 billion agreement for weapons sale.

The biggest repercussion would be a loss of reputation for France as a reliable supplier, Arnaud Dubien, a Russia research associate at the Institut de relations Internationales et Strategiques said. “Officials from the French Ministry of Defence, in private conversations acknowledge that if they fail to deliver the Mistral to Russia, then France will lose its contract to supply 126 fighter jets to India,” Dubien said.

......

A source in the Indian Defence Ministry said that India was “watching the developments closely.” The source added it was too early to say if this would factor into the government’s decision to sign a contract. “When such a large amount of money is paid and then a supplier uses geopolitics to delay or suspend deliveries, it does raise eyebrows,” the source, who was not authorised to talk to the media, said. The Indian Ministry of Defense could not be immediately reached for official comment.
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Whether such a plan is afoot in the Indian Defense Ministry, we don't know. But according to above report, it seems that Mistral row is forcing Indian government to have second thoughts about the whole Rafale deal.

                                                               Rafale Jet
Update:


Another high ranking source in Indian Defense Ministry has come forward and told Sputnik news contradicting earlier reports about India threatening to cancel Rafale deal over Mistral row.


NEW DELHI, November 27 (Sputnik) — India is not planning to cancel the deal on purchasing French Rafale jets despite earlier media reports that it would do so if France refuses to deliver Mistral helicopter carriers to Russia, a high-ranking source in Indian Defense Ministry told Sputnik Thursday.
….
According to earlier media reports, India warned in September it would cancel the $20-$22 billion contract signed with French Dassault Aviation company on the supply of126 Rafale fighter jets if Paris refuses to fulfill its obligations under the Mistral contract.
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Whatever the report about the Rafale deal, France's reputation as “trustworthy” supplier surely seems to have taken a hit. And the events after November 30th, if it refuses to supply Mistral ships to Russia, would certainly cement it.

Charles de Gaulle must be squirming in his grave.
 

 


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