Russia, France clinch $2-bn deal for two Mistral-class warships

Moscow: Russia and France have agreed on a path breaking 1.37 billion euros ($1.81 billion) deal for two Mistral-class helicopter carrier-cum- command-and-control landing ships, both nations said today. The controversial deal has attracted much criticism from NATO nations, including the US.

Russia and France issued a joint statement, which said, ''Russian president Dmitry Medvedev informed French president Nicolas Sarkozy that a consortium of the French company DCNS and the Russian United Shipbuilding Corporation won an international tender for the delivery of two helicopter ships to the Russian defence ministry announced on October 5.''

Two helicopter ships will be built jointly at first, and another two will be built in the future, the statement said.

The project will involve DCNS and STX of France and the United Shipbuilding Corporation (USC) of Russia.

It will provide jobs for 1,000 people at French shipyards for four years. It will also help revive and update Russian shipbuilding yards.

"The first ship will cost 720 million euros and the second 650 million euros," the RIA Novosti news agency cited a source close to the negotiations as saying. It was not made clear why Russia was paying a premium for ships which would normally have cost 500 million euros ($650 million) each.