France and Russian Ship Deal - Russia not to Build its Own Ships

Here is the story:

Russia's new Defence Minister has made the decision that Russia will not build Mistral class helicopter-carriers, the Vedomosti newspaper reports with reference to sources in the Defence Ministry. 

According to earlier agreements, France was to build two such ships, with the costs totalling more than a billion euros, while Russia was to build two more ships at its own shipyards. 

But, according to the periodical, the concept of using Mistral class ships by the Russian Navy has turned out to be questionable, while the building and maintenance costs, too heavy. 

France is already building two helicopter-carriers for Russia, with the first one due to be commissioned in 2014, while the second one, in 2015.
Both naval ships will be based in Vladivostok.

My question on this particular case is whether or not Russia is backing out because it just doesn't have the capacity to build enough advanced ships for its own navy while maintaining its ship export commitments.

Corruption investigations in the MoD - Filed under: Speculation

This is just a kind of tidbit - a nugget of joy - along with some wild speculation.  For what it's worth.

There has been a story developing about corruption among Russia's Defense Ministry's property department.  That has led to what appears to be a full investigation with documents and other items being seized today in Moscow.

From the article in RIA:

Oboronservis was set up in 2008 and carries out repair and services for Defense Ministry properties as well as repair and maintenance of military equipment and provision of services to military garrison towns. 

A law enforcement source told RIA Novosti that no detentions are planned in the near future as part of the ongoing investigation. 

Defense Minister Anatoly Serdyukov was informed of the investigation and arrived at one of the locations being searched, law enforcement sources said on Thursday morning. 

Russian President Vladimir Putin’s spokesman Dmitry Peskov said Putin met with Serdyukov and instructed him to ensure interaction with investigators on the Oboroneservis case. 

Presidential administration head Sergei Ivanov said it will be up to the court to rule who is guilty. 

“Only the court may determine whether a person is guilty or not. All the rest is vibrating air and propaganda,” Ivanov told journalists.

More details about the latest seizure and ongoing investigation can be found here.

Speculations

Now for the wild speculation.  It does not seem that any large and visible investigation such as this one is every done without the knowledge/approval of the Kremlin.  This investigation, and its timing, may indicate the model of having civilians as a part of the ministry of defense, and part of the defense and security structures within Russia, is under attack.  Many in the military have been unhappy with the civilian head of the Defense Ministry.  A good bio can be found at Wikipedia.

This may be more "Clan" maneuvering among Russia's elites, especially given the fact that Ivanov's held the position of Defense Minister prior to moving over to be head of the the Presidential administration in 2007.  If Kremlin watching is back in vogue, this makes for compelling television.

"Private" Military Companies in Russia

The headline in my RSS feed from RIA Novosti made me think that Russia was going to privatize its military production.  It turns out that the "Private Military" companies would be state owned/sponsored private security forms on the order of Blackwater or whatever they are calling themselves these days:

The Russian government’s Military Industrial Commission may consider creating private military companies in Russia, Deputy Prime Minister Dmitry Rogozin said Wednesday. 

Russia’s significant economic interests abroad often operate in “difficult” conditions, and such companies would facilitate their work, said Rogozin, who oversees Russia's military-industrial complex. 

“We are thinking about whether our money should go toward financing foreign private security [and] military companies, or whether we should consider the feasibility of such companies in Russia itself,” he said.

 The article points out that such firms are useful for the US because it saves the government insurance money when people die on missions that are contracted to these firms rather than carried out by the military.  Insurance isn't a problem for the Russian military which doesn't really deal in such financial niceties according to Alexander Golt:

“In Russia, the state has practically no financial responsibility to the loss of military personnel.”

The question that remains for me is what affect such state-sponsored paramilitary firms would have on Russia's foreign policy actions.  It is plausible to think of such firms being hired by Assad, for instance, to perform various protective tasks, training, or necessary maintenance.  It would provide a bit of cover to Russia's government which could point to market principles and non-interference with private firms to justify unpopular foreign policy commitments.  This will definitely be an interesting area to watch in the coming years.