In Russia, threats to a French warship deal

Swelling opposition in Moscow to a deal involving the purchase of amphibious assault ships from France may scuttle Russia’s last opportunity in the near future to invigorate its listless naval shipbuilding industry, writes research and news agency Stratfor. The Mistral-class warships would address certain limitations in the Russian military while giving the country much-needed experience and technology for the construction of large military vessels; but the project faces steep obstacles.
The project could be downgraded as a result of power struggles inside the Kremlin, while the allocation of funds for the project as part of the country’s military modernization plans seem tenuous at best. Moreover, the growing hostility to the Mistral deal signals Moscow’s acknowledgment that it should seek to build the military Russia needs and can realistically afford - not the one it would build were it free from looming constraints.
After years of negotiations, Paris and Moscow signed a $1.7 billion contract in June 2011 for two Mistral-class amphibious assault ships to be built in France. The deal includes an option for two additional Mistral-class vessels to be constructed later in Russia. Russia’s military lacks a warship like the Mistral, which would significantly enhance Russia’s ability to conduct amphibious operations by providing vessels
with integral aviation and troop-landing capabilities. With 850 square meters of modular pre-wired command space, the warship can also serve as a command center for an amphibious fleet.

Fight over funds
Contention over the Mistral deal is nothing new, since some Russian officials believe that the warship has diverted funds needed for domestic construction of submarines and smaller surface vessels. However, an ongoing power struggle inside the Russian Defense Ministry has created an opportunity for those opposed to projects such as the Mistral to try to sink them. In recent weeks, for example, unnamed officials have asserted in the Russian media that the Defense Ministry is turning against the Mistral project. On Jan. 24, Ivan Kharchenko, the deputy chief of the Russian Military-Industrial Commission, called the deal absurd and said it had inflicted significant damage on the state and on the Russian shipbuilding industry. Kharchenko also accused former Defense Minister Anatoly Serdyukov of exercising poor judgment with the project.
Construction of the first two Mistral vessels will continue (Russia would be liable for huge fines if it cancelled the entire deal), but the likelihood of building two additional warships in Russia is looking increasingly unlikely. Already, Moscow has postponed construction of the latter vessels to 2016, giving it time to cancel the deal.

Russia’s shipbuilding struggles
The Russians have not built a large surface vessel for the military from scratch in more than 20 years. The refurbishment of India’s INS Vikramaditya aircraft carrier, currently underway at a shipyard in the Russian city of Severodvinsk, has been beset by constant delays and obstacles, highlighting Russia’s declining ability to work on large military vessels. And while the Russian navy regularly announces plans to construct new aircraft carriers (the navy currently operates a single, Soviet-era carrier), concrete plans have yet to materialize; the Russians are exceedingly unlikely to construct a fleet aircraft carrier within the decade.
Beyond enhancing Russia’s military capability, the Mistral deal - particularly its second phase - could bolster the country’s flagging shipbuilding industry. In addition to the technology the Russian military will gain after receiving the first two vessels, constructing the optional Mistrals at the St. Petersburg-based Admiralty Shipyards would give Russia direct large-scale shipbuilding experience. New shipyards would be set up on Kotlin Island to handle the project and could subsequently be used to produce other large combat ships - possibly those funded by Russia’s State Armament Program 2020, the country’s military modernization plan for the current decade, in which Moscow devoted a hefty $132 billion over 10 years to shipbuilding.
Limitations to modernization
However, as demonstrated by the opposition to the Mistral deal, the country’s plan to overhaul the navy will face serious constraints. The decision to allocate significant funding for the defense sector did not go unopposed. Among other power struggles within the Kremlin, Russian Finance Minister Alexei Kudrin lost his job in September 2011 after opposing the increase in funding. The modernization plan has already proved to be vulnerable to modification, and aspects of it will likely evolve to accommodate future needs.
Moreover, while the $13.2 billion annual shipbuilding allocation is substantial, Russia’s entire fleet is in dire need of modernization. Thus, even if the funds were fully allocated, the bulk of it would go to the construction of submarines, particularly the costly Borei and Yasen class ships. Russia would also like to bolster and modernize its nuclear arsenal, a task that would take precedence over acquiring new amphibious capabilities. Moscow is also unlikely to remove funding from the Admiral Grigorovich- and Admiral Gorshkov-class frigates, the production of which has so far been successful.
The opposition to the Mistral deal in part marks an acknowledgment by Russia that it will have to make tough choices on the force structure it requires. The country’s defense establishment has been known to announce plans to develop the military Russia would prefer, rather than the one the country can realistically maintain. Moscow’s refusal to rescind its million-man military doctrine is particularly illustrative of this dynamic. As older systems retire in growing numbers, demographic and economic trends increasingly affect the military, and the need to recapitalize the defense industry increases, Russia’s debate over defense funding will increasingly reflect what is actually possible