Defense update
07.02.2008 16:23

*** In the near future Military-Industrial Commission will determine the number of the test launchings of Bulava. It was declared by the head of the Federal Space Agency Anatoly Perminov at the session of Roscosmos. Along with the number of the launchings MICom will determine the necessary alterations to the technical performance of the missile.

*** ROE gives more Algerian contracts to Northern Shipyard. The shipyard will repair two more ships which the USSR delivered to Algeria over 20 years ago. Totally in 1980sh Russia delivered to Algeria three Zelenodolsk made patrol ships and three small rocket ships made by SPb based Almaz. In the end of 1990s the contract on the modernization of the two out of six ships was signed with the Kronstadt shipyard. However, then Algeria was disappointed with the quality and other ships were not repaired. Negotiations renewed in the beginning of 2007. ROE gave the contract to Northern Shipyard. The Algerian party supervises the process of repair, and they so far have no claims, said general director of Northern Shipyard Andrey Fomitchyov. Now the shipyard is likely to get two more ships. First two ships should be handed over to the customer in 2009, two more - not later than mid 2010. The evaluated cost of repair is 5 billion rubles. In the 9 months of 2007 the revenues of Northern Shipyard made 1,75 billion rubles.

** Russian News Agency Novosti published the information that India is taking the nuclear sub from Komsomolsk-on-Amur for a 10 years lease. Allegedly the crew of the first India’s own nuclear submarine (100 persons) will be trained in the educational center at the naval base Vizag using the leased sub. Although there is a reference to the Indian sources this is the third successive publication in Russia since the New Year which stays without official denial or comment.

** In 2008 Ukraine intedns to sell 100 % of the stock of the Feodosiya based shipyard More. This enterprise entered the list of the companies subject for privatization in 2008. Earlier the Crimean authorities wanted to hold the bankruptcy procedure first. Until recently More was run by the Ministry of Industrial Policy of the Ukraine. In January-September, 2007 the net loss of the company made UAH 62,3 million. More itself is positive about possible privatization. According to the deputy general director of the shipyard Igor Kuchky the financial situation of the company is difficult. Accounts payables reach nearby 100 million UAH. “We specialize on the ships of light alloys. It is very hi-tech, but also expensive production, therefore the demand for it recently fell”. He also revealed that More prepares for rearranging its production capacities for the construction of the ships of ferrous metals.

** Russians buy Ukrainians and Polish together. Ukrainian company "Industrial Union of Donbass" (ISD) which intedns to buy at least 83 % of the shares of the Polish shipyard Stocznia Gdansk can be in its turn bought by the Russian company "Gazmetall". The Chairman of the ISD’s board of directors Sergey Taruta declared that the results of the negotiations will be announced before March 2008. Gazmetall is equally owned by the two Cyprus registered companies — Seropaem Holdings Ltd and Sam Invest Co. Ltd, however, actually the company is controlled by Alisher Usmanov, Vasily Anisimov and Andrey Skoch.

** In the first quarter of 2008 Ukrainian Izmail ship-repair plant may be privatized. Experts believe that this company as well as the Feodosiya based More is of interest for those structures who already own some shipbuilding enterprises and shipping companies. The management of the shipyard refused from comments.  According to the vice-president of the Ukrainian association of ship owners «Ukrsudprom» Victor Lisitsky there is a trend whereby nearly each financial-industrial group tries to build own vessels. The principle point is the profitability rate of such manufacture. For shipbuilding it makes 1-1,5 %, whereas if the ships are build within a shipbuilding-shipping-financial group the revenues can increase 2-2,5 times.

** Ukrainian shipbuilding is merging with the financial-industrial groups. The aim of such integrations is to increase the profitability rate of the manufacture. Shipyards can make 1-1,5 %, whereas inside the union with the shipping and financial structures the revenues increase 2-2,5 times. The advantages of such schemes are already vivid for some noteworthy businessmen, who managed to introduce such structures: Konstantin Zhevago (he owns "Zaliv" and «Kiev Shipyard»), Konstantin Grigorishin (through affiliated structures he owns 29,4 % of Sevmorzavod and controls Urrechflot), Vadim Novinsky (he runs Chernomorsky and Khersonsky Shipyards). According to some analysts it is not excluded that each of them will try to monopolize the branch and consequently will become interested in an opportunity to get any additional asset. The shipyards for sale in the Ukraine may be also of interest for the real estate businesses.

*** Only 36% of the Russian strategic defense enterprises have good financial and economic parameters. 25 % are on the brink of bankruptcy, according to the first vice-president of the Military-Industrial Commission Vladislav Putilin. At the scientific conference dedicated to the problems of national security held by the Academy of Military Sciences he said that in 2007 the production volumes in the defense complex grew by 14%, including purely military by 19%. However, some enterprises are not capable of making the goods of proper quality. The vice-president considers that it is high time to solve the problems of pricing with the military goods. He called this problem a "bomb under the State Arms Program". He also reminded of the too slow process of creating integrated structures.

*** Motoviliha Plants are likely to take of the 39th Arsenal plant of the Ministry of Defense of the Russian Federation. This enterprise is specializing on repair artillery. However, it is going to be a long process, which will require an uneasy procedure removing "Arsenal" from the list of the strategic enterprises of Russia. Motoviliha negotiate the deal with the MoD.

** The Commander of the Russian Air Force Alexander Zelin called the situation in the national aerospace defense "critical". According to him the structure of the Air Force badly lack the means which provide for the full-fledged aerospace defense capabilities. Zelin urged to speed up the integration of the air defense, space-rocket defense and radio-electronic warfare into a uniform system of aerospace defense (VKO).

** Northern shipyard is ready to build sea platforms for "Gazprom". Now the Vyborg based shipyard controlled by Yuri Kovalchuk has a competitor. The construction site at Northern Shipyard was modernized during the implementation of the project on creating a manufacturing complex for the large-capacity ships with the total deadweight not less than 500 thousand tons a year. As the head of Northern Shipyard Andrey said, the cost of the project is 13,7 billion rubles. Before 2010 Gazprom plans to build five semi submersed platforms for Shtokman. Two of them worth 59 billion rubles are already under construction in Vyborg.

* Russian diplomats to contribute to arms sales. Financial committee of the State Duma already discusses a bill which will allow using the accounts of the Russian official missions abroad by ROE.

** The draft federal target program was prepared to ensure additional financing for aviation engines. According to Aviaport.Ru it is about 345,7 billion rubles, including 231 billion from the state budget. The specified sums are additional to all existing programs.

*** The extraordinary meeting of shareholders of "Progress" (Arsenyev) approved the credit deal with Sberbank worth 3,15 billion RUB. The credit will be used for fulfilling the contracts with the Ministry of Defense. "Progress" announced it begins a technical upgrade project to be done within the federal program «Development of the military-industrial complex for 2007-2010 and till 2015».

** Russian Air Force received two brand new Mi-28N which were deployed in the Tver area. First the MoD plans to buy 10-15 helicopters a year.

*** The second squadron of the air defense armed with S-400 will be on duty in Moscow suburbs by the end of 2008, according to the Commander of the Command of Special Purpose general-colonel Yuri Solovev.

***** According to a web forum SSJ-100 will not take off before the Presidential elections. Anonymously the people working in the project report noticeable difficulties.

** Ukraine plans to make 10 planes in 2008. In 2007, as well as in 2006, the aviation enterprises of the country could not hand over any aircraft to its customers.

** Ukraine and the Russia will create a joint working group on determining the options of splitting the intellectual rights on An-124. Russia intends to hold it on the intergovernmental level, Ukrainians insists on solving the problems between enterprises.

** Former director of the Volgograd based "Akhtuba" Sakit Allahverdiev is suspected of tax crimes. He was put among “wanted by the police”.

** The Main Military Attorney Office of the Russian Federation demands registering the rights of intellectual property related to defense developments. Many developments of the past years have not been registered in the Federal Agency on Legal Protection of Results of Intellectual Activities of Military, Special and Double Purpose of the Ministry of Justice of the Russian Federation, neither in a special section of the Uniform Register of Ministry of Defense of Russia. That created real preconditions for losing the rights of the Russian Federation on the developments achieved with the means of the federal budget.

** Su-34 has a high upgrade potential. According to the unanimous sources of AviaportRu it concerns the onboard radio-electronic equipment, arms and engines. The already established on Su-34 "digital board" and the multiplex channel allow for very quick replacing of the equipment as domestic requirements on multiplex completely correspond to the foreign standard of the type. Most likely the first upgrade will include introducing new guided "air-to-air" missiles and more powerful engines.

*** The state tests of the engine AI-222 for Yak-130 may be completed in March-April, 2008, according to the general designer of Ivchenko-Progress (Zaporozhye) Igor Kravchenko.

*** 11 new federal target programs and one sub-program are likely to be launched in 2009, according to the Prime Minister of the Russian Federation Victor Zubkov. The new programs include "Development of Civil Sea Technic 2009-2016", "National System of Chemical and Biological Safety of the Russian Federation (2009 2013)", "Fire Safety in the Russian Federation for the Period before 2012", "Anti-terror (2009-2012)", "Perfection of System of Sergeants and the Soldiers the contracted  Staff 2009-2012", "Modernization of the Uniform ATC System of the Russian Federation (2009-2015)", the program of development of the Kaliningrad region before 2013, "Increasing the Stability of the Basic objects and Life-Support Systems in Seismic-dangerous regions (2009-2013)", "Development, Restoration and Organization of Manufacturing Strategic, Rare and Import-Replacing Materials and Small Tonnage Chemistry for Arms, Military and Special Technic 2009-2011 and before 2015", "Scientific and Pedagogical Staff of Innovative Russia for 2009-2013", "Development of Transport System of Russia (2010-2015)".

*** Russia has received from Venezuela for delivering Mi-28N the Night Hunter. Although the application has been received, it is too early to speak about signing the contract. According to the general director of Rostvertol Boris Slyusar the first delivery can take place not earlier than the second half of 2009. He added that other countries also show big interest.

*** Belarusian Security Council officially denied any rumors regarding the deliveries of S-300 from Belarus to Iran.

** What happens to GLONASS… Central Research Institute for Machine Building informed that the first out of three satellites launched in December, 25th last year, started working. It became the 16-th device of the orbital grouping and 13-th working. However, after a number of the “yes-sir” reports in the media all of a sudden the First Vice Premier Sergey Ivanov publicly and harshly criticized Federal Space Agency for the unacceptable conditions of GLONASS. It went as far as the media started guessing about possible dismissal of the head of Roscosmos Anatoly Perminov.

According to Ivanov despite all efforts many problems of keeping and expanding GLONASS are solved extremely difficultly. It concerns both coordination of the entire program for which the agency is responsible and specific works, he said. First of all the increase of the production capacities of the manufacturers of satellites and ground infrastructure for its mass commercial use is totally unacceptable. Most importantly is that as of today the orbital grouping does not provide 100% availability of the system in the territory of Russia. Noteworthy, the breaks in the system work in the territory of Russia reach almost three hours and in other places almost four hours. Even after starting up three yet not working satellites the 16 satellites will be obviously insufficient for fulfilling the orders of the President. The full grouping of 24 satellites will be most likely achieved in 2009-2010 to keep the project within reasonable costs. Contrary to the earlier promises that GLONASS will be more accurate than the US GPS at the moment the accuracy of the latter makes 2,3 m while Russian system has 10,5 m.

Ivanov formulated his conclusion as follows: "I draw attention of the top management of Roscosmos as the coordinator of the works on GLONASS that it is impossible not to fulfill the tasks set. This is about personal responsibility of the management. I do not exclude taking decisions on staff”.

*** Sevmash asks $1 billion from the Russian government to finish Admiral Gorshkov. According to the Russian Minister of Industry Victor Khristenko negotiations with the customer go on. However, he did not want to predict their results. The problem consists of both subjective mistakes of the shipbuilders and what happened to the dollar – ruble exchange rate. When the contracts were concluded ruble was slowly devaluating. Now the trend is reverse. This is a huge problem for a lot of companies, although the Minister said that there are some companies, like Sovcomflot and Novoship, which have the instruments to fight the problem.

*** Russian shipbuilding will stay more diverse than just USC. According to the Russian Minister of Industry Victor Khristenko USC may seek partnerships with private business in certain spheres, like building new shipyards or engineering centers, however, the “state won’t collect everybody under one roof”.

** UAC is to ensure serial production of the Tu-334 under the state orders. According to the vice-president of the UAC Valery Bezverhny Presidential administration and the Federal Protection Service ordered six Tu-334. Explaining why Tu-334 was not included into the list of products to be supported through the already developed but not yet approved federal target program "Development of Civil Aviation Technic of Russia 2002-2010 and till 2015", Bezverhny said that the program provides for financing for new aviation technic, whereas the Tu-334 related R&D was completed when the plane got the certificate of type in 2003. UAC is already working on serial production of Tu-334.

Meanwhile Russian Minister of Industry Victor Khristenko added some more explanations regarding the fate of Tu-334. Because of the fact that it is made of mostly domestic spares and materials as well as it does not have limitations regarding the spread of the technologies this aircraft is to take certain niche parallel with the SSJ-100.

*** The turnover of VASO in 2007 was 4,2 billion rubles, according to the general director of the company Michael Shushpanov. However, during the visit of the First Vice Premier Dmitry Medvedev to Voronezh he said that VASO needs at least three times more. Totally before 2015 VASO plans to construct 262 planes of different types for "Ilyushin Finans" and 462 sets for Sukhoi SuperJet. However, the basic prospect for the plant is defense orders on transport plane Il-112. Shortly before the Minister of Industry Victor Khrisenko said that most likely Il-96 family would disappear. Some prospects can be in India or China, which need an aircraft of this class.

** Russian State Property Agency initiated replacing general director of the Kaliningrad based "Yantar". There are rumors that the retirement of the acting head of the shipyard Nikolay Volov is explained by the problems with the Indian contract. The minority shareholder Inter-Regional Investment bank supports Volov but cannot block his retirement. The shipyard’s board is to meet shortly to decide on the matter. Deputy head of Zvezdochka Igor Orlov is offered as an alternative. One of the reasons, according to the Agency of Industry is that Nikolay Volov does not have the access to state secrets. The reason why Volov lost this access was not explained in both agencies.

Also Rosprom pointed at the worsening financial position of "Yantar". In the first Q3 of 2007 the accounts payables of the plant made 164 million RUB. Volov himself explains everything by the political interests. The member of the board of "Yantar" Michail Heifits said he heard about the situation with the replacing of the directors, but did not see the documents, thus refusing from comments. According to him Volov is an excellent director who managed to make the order at the enterprise and he does not know other candidates.

The head of USC Yuri Yarov also refused from comments, but he said that the "money is on the accounts in the Inter-Regional Investment (MIB) bank, but the bank does not remit it to the suppliers of "Yantrar", thus having made hundred millions of debt. Noteworthy, last December the member of the MIB’s board Igor Kruglyakovu was sued for the attempt of fraud.

** Deputy director of Oboronprom Vasily Lapotko was appointed deputy general director of Motorostroitel. Before V.Lapotko was appointed CEO of Kuznetsov. De facto Oboronprom took over the Samara based engine holding.

News source: ShipbuildingRu
Print version