The financing argument contrasts confidence in eventual purchase with the risk that a modern warship program will be cancelled after construction investment. A specialized vessel can leave its builder with few alternative buyers. The two Mistral-class ships built for Russia provide the example: their eventual sale to Egypt required difficult and costly arrangements. The inflation-adjusted comparison rejects the claim that modern systems cost much more than their predecessors. Uncertain purchase prospects make lenders less willing to finance construction against final payment. In this explanation, manufacturers seek returns during the build because they cannot safely rely on receiving all their profit at delivery.
Notable Point · 46:43-48:58
Cancellation and resale risks complicate warship financing
A comparison with payment on completion examines how cancellation, a limited resale market, and uncertain bank finance can raise contractors' costs.