The Court of Auditors has just revealed the financial cost for France of the non-delivery of the two type BPCs Mistral manufactured by Naval Group and initially intended for Russia, before an about-turn by the French government (photos OF).
The purchase price of the two BPCs (Projection and Command Building, now called assault helicopter carriers) was estimated at 1.12 billion euros, or even 1.2 billion with the landing craft.
The PCB contract
In 2010, Moscow accepted a French bid for the construction of two BPCs (projection and command building) of the Mistral intended for the Russian Navy, with an option for two additional buildings. After an agreement in January 2011, work began in Saint-Nazaire, culminating in January 2014 with the sea trials of the first Mistral.
The invasion of Crimea by the Russians then changed the situation: the French sale to Moscow was criticized by the USA, the Baltic States and Poland.
In November, the pressure pushes Paris to suspend “until further notice” the delivery of the first Mistral. In August 2015, France and Russia reach an agreement: Paris will recover “full ownership” of the ships after having “fully” reimbursed Moscow.
The bill for Paris
In 2015, President François Hollande guaranteed that the cancellation of the Russian contract, followed by a resale of the ships, would constitute a white operation for the State.
However, the cancellation of the sale to Russia of the two BPCs has an official cost: €949,754,849, according to a bill adopted by the Council of Ministers in August 2015. The invoice does not include all the additional costs including compensation at Naval group, the adaptation of the two buildings etc. The opposition deputy, Thierry Mariani (Les Républicains), then assesses the bill for his part at around 1.5 to 1.6 billion euros. Fortunately, Egypt then showed interest in the two PCBs.
According to the Senate, on September 29, 2015, if the agreement in principle reached with Egypt materializes, the transfer to the general budget of a fraction of the proceeds from the sale of PCBs could finally reduce the cost for the State to a amount between 200 million euros and 250 million euros.
The Court of Auditors redoes the accounts
In its report of January 27, entitled “Support for the export of military equipment”, the Court of Auditors specifies that “this operation was only definitively settled following the control of the Court and the implementation by the DG Trésor of a committee for the recovery of military affairs in order to manage claims files”.
The court adds that “the ban on the export of command projection buildings (PCBs, helicopter carriers) to Russia” constitutes a “major loss”, even if it was limited by the resale of the buildings to Egypt.
In total, “taking into account the results of the negotiations with Russia, the waivers of royalties, the compensation paid to Naval group, the adaptation and the transfer of the buildings to Egypt, this operation will have had a cost of 409 M€ for France.”
No Mistral for Russia but an addition of 409 million euros for Paris