Deal for Rs. 20 billion++ Russian patrol vessel this week, company chief comes in private jet
The Government will this week sign a US$ 135 million ( or more than Rs 20 billion) deal to buy a Russian built Gepard 5.1 Offshore Patrol Vessel ( OPV) for the Sri Lanka Navy.
A delegation from Rosboronoexport, the monolithic state- owned enterprise for defence exports, will arrive in Colombo for this purpose. They are also expected to hold talks on other Russian defence equipment on offer. The Russian company offers battle tanks, fighting vehicles, combat trainers, bomber jets, aircraft, helicopters, ships, boats, submarines, weapons and ammunition.
The signing of the OPV deal will coincide with the arrival of Alexander Alexandrovich Mikheev in his private jet. A close friend o f Ru s s i a n President Vladimir Putin, he is the head of Rosboronoexport and is being accompanied by top officials and his personal security team. He is expected to call on President Maithripala Sirisena, top security and defence officials. President Putin appointed Mr Mikheev for the top post in January this year.
The cost of the OPV at US$ 135 MILLION is the unutilised amount remaining from a credit line issued by Russia on February 10, 2010. The previous Government utilised only US$ 165 million and the credit line lapsed in 2015. However, the present Government persuaded Russia to re- validate the US$ 135 million
for five years. A Russian bank is extending a loan for the amount at an annual interest rate of four per cent. The repayment period, with a five year grace, will be within ten years.
The value of the OPV would increase to US$ 158 million which would cover onboard spares and ammunition. A further US$ 7 million is the cost of training Sri Lanka Navy personnel. The Russian authorities have requested the Government of Sri Lanka to contribue 15 percent of the value of the vessel.
In September this year, the Cabinet of Ministers approved a recommendation from President Maithripala Sirisena, as Minister of Defence, for the purchase of this vessel. He said in a Cabinet Memorandum that “The Sri Lanka Navy has a requirement of this kind of a ship and already given the recommendations to purchase this.”
Defence sources say the purchase of more ships from two different countries is now on the cards.