‘France will face tough task to sell warships’

After cancelling the sale to Russia, France finds itself lumbered with two giant Mistral warships which it will find "extremely difficult" to re-sell and cannot afford to keep, say experts.

'France will face tough task to sell warships'
The Vladivostok warship, a Mistral class LHD amphibious vessel ordered by Russia to the STX France shipyard in Saint-Nazaire, western France. Photo: AFP
The pair of 200-metre (650-foot) amphibious helicopter-carriers were due for delivery to Russia by the end of this year in a deal worth an estimated €1.2 billion ($1.3 billion).
Instead, they are docked in the western French port at St Nazaire after Paris put the deal on ice in response to Russia's aggression in Ukraine last year.
The deal was formally cancelled on Wednesday, and within hours French Defence Minister Jean-Yves Le Drian said “several” countries had expressed an interest in buying the ships, without giving details.
“It's desirable that we sell them as quickly as possible,” he told RTL radio.
But experts say France will have its work cut out in offloading them.
“Selling someone ships these days is extremely difficult,” said Ben Moores, a defence analyst for IHS Jane's in London.
“They will have to seriously cut their price to make it attractive to another country. It could take years.”
Plenty of militaries are in need of new warships — IHS Jane's estimates there are 13 countries needing a total of 26 amphibious assault vessels over the next decade.
In theory, Moores said, the Mistrals are very re-sellable “because the only big thing Russia changed is they put their own communications system onboard, which is not hard to take out these days.”
But most countries with the money and desire to buy boats of that size have their own ship-building industries.
“The problem France will have to overcome is domestic ship-building lobbies. If a country like Turkey decides to buy these ships, that would mean thousands of people would be laid off from a shipyard,” said Moores.
“And there's a question of national pride in saying 'we build our own ships'.”
'Absolutely have to sell'
Meanwhile, France already has three Mistrals in its fleet, and doesn't have the funds to add two more.
“Keeping them would mean not only paying for them, but also making them run — creating crews, docking them, maintaining them,” said a senior procurement officer in the French military, who was not authorised to give his name.
“We absolutely have to sell them.”
But only a handful of countries will be able to make use of them, said Admiral Alain Coldefy, a former inspector general of the French military.
“We need countries that want to intervene in the world… with the resources to buy such sophisticated, top-of-the-line boats. They also need well-trained crews.”
He said the ideal situation would be for the European Union to purchase them, but years of effort to bolster Europe's collective defence have made little headway.
An added problem for France will come when Russia comes to dismantle its communications equipment.
“The Russians will no doubt take their time in a bid to steal as much technology as possible, as usual,” said Coldefy.
“They say they can make these boats themselves, but really they are far behind.”
According to IHS Jane's, the 13 countries needing a warship in the next decade — and with any hope of buying one from France — are Australia, Belgium, Brazil, Canada, Chile, Germany, India, Japan, Malaysia, The Netherlands, Singapore, Turkey and Venezuela.
Of those, only India and Turkey need a ship in the next four years, and New Delhi recently said it would stop importing warships and try to make its own, while Ankara aims to become a net exporter of naval vessels.
“Others could come up,” said Moores. “Especially associated with tensions in the South China Sea” where China's claim to regional control have raised concerns among its neighbours.
“But only a few of these ships get sold every year, so it's going to be tough.”

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Egypt steps in to buy French Mistral warships

Egypt has agreed to buy two Mistral warships which France built for Russia before scrapping the sale over the Ukraine crisis, Paris said in a statement on Wednesday.

Egypt steps in to buy French Mistral warships
A Mistral warship. Photo: AFP

President François Hollande and Egyptian President Abdel Fattah al-Sisi “have agreed on the principle and terms and conditions of Egypt's acquisition of the two Mistral class vessels,” the statement from the French president's office said.

The deal comes a little over six weeks after France and Russia reached an agreement to fully reimburse Moscow for the scrapped €1.2-billion ($1.3-billion) deal.

The first Mistral had been due for delivery in 2014, while the second was to be delivered this year.

But as Russia and the West became embroiled in their worst standoff since the Cold War over the Ukraine crisis, France's partners said delivering the ships would undermine their efforts to isolate Moscow over its 2014 annexation of Crimea and support of separatists in eastern Ukraine.

The sale to Egypt of the vessels will come as a huge relief to the French government which was faced with the prospect of some very expensive military hardware rusting away at the western French port at St Nazaire.

Paris faced the wrath of its allies around the world if it were to deliver the technology to Russia, and decided to cancel the delivery.

It was an expensive decision for France, which has had to foot the bill of over one billion euros for the upkeep of the ships and the cost of training 400 Russian sailors to crew them.

After eight months of intense negotiations, France and Russia agreed on the reimbursement of the deal in August.

Paris returned 949.7 million euros which had already been paid.

(France faced protesters when it looked like the deal was to go ahead. Photo: AFP)

France also committed not to sell the two warships to a country that could “contravene Russia's interests”, such as Poland or the Baltic states, a diplomatic source told AFP.

Several countries were said to be interested in the warships, including Canada, India and Singapore.

It has not been divulged how much Egypt will pay for the warships.

While experts have said any sale would likely see a significant price cut, government spokesman Stephane Le Foll said there would be no “loss” of money in the new accord.

The deal between Egypt and France is their second big military contract this year after Egypt became the first buyers of the Rafale fighter jet, agreeing to purchase 24 in February.

The 5.2-billion-euro ($5.9 billion) sale of the planes was a rare triumph for France which had failed to export its flagship multi-role combat jet.

However rights group Amnesty International slammed the decision to sell the jets to a nation it has accused of “alarming” human rights abuses.

Analysts said that deal required overlooking some serious abuses by a regime which Paris sees as a stable partner in a chaotic region.

With Libya to the west wracked by instability, and the threat from Islamic State-linked jihadists on its eastern flank, Egypt has become a strategic partner to France despite a rights record sullied by al-Sisi's brutal crackdown on opponents.

Sisi was elected president in May 2014 with 96.91 percent of the vote a year after toppling the country's first freely elected leader, Islamist Mohamed Morsi.

A subsequent crackdown on Morsi's supporters left at least 1,400 dead and thousands more in jail