By Denis Telmanov
The Russian defence industry is waiting for tax breaks.
On Thursday afternoon, Prime Minister Vladimir Putin stayed in Korolyov just outside Moscow, inspecting assembly workshops of the Tactical Missiles Corporation and chairing a meeting that discussed the defence industry situation.
Mr Putin inspected production of missiles for the Russian Armed Forces and other countries. All missiles are assembled manually. Corporate workers displayed virtually all types of ready-made missiles in the workshop's central section.
Information materials mentioned long-range X-59MK anti-ship missiles with the fire-and-forget system. Corporate officials said such missiles operated in the terrain contour matching (TERCOM) mode for greater accuracy.
Opening the meeting, Putin said the defence industry was also suffering from a liquidity crisis. It is common knowledge that the Government will compensate the defence industry's working-capital shortages out of the federal budget. On Thursday, Prime Minister Putin said more than a trillion roubles had been allocated for state defence contracts. "In all, we will spend 4 trillion roubles until 2011," Putin promised.
Some defence companies are listed in the federal section of a list of strategic enterprises, due to receive high-priority federal aid. However, the list's federal section contains fewer enterprises than initially planned. All others will be included in regional lists, due to be approved in the near future.
On Thursday, Putin signed a resolution on measures to support Russian industrial-product exporters. A considerable part of defence industry enterprises can count on such support.
Although defence companies have strategic significance, Putin said on Thursday that he will not tolerate any sponging attitudes. "Companies aspiring to state assistance will be selected in line with tough criteria. It is one thing when an enterprise faces problems for objective reasons, and it an entirely different matter when this is caused by mismanagement," Putin said.
Putin promised to fire incompetent managers, to streamline the work of defence industry holding companies and to reduce federal target defence programme allocations.
Defence company managers requested tax breaks in addition to those enacted starting with January 1, 2009 (reduced profit tax and depreciation bonuses) from the Prime Minister.
Tactical Missiles Corporation CEO Boris Obnosov said before the meeting that he would ask the Prime Minister to stipulate property-tax and land-tax holidays and to charge lower profit tax on corporate modernisation allocations.
At any rate, all possible tax breaks should be coordinated with the Ministry of Finance. However, a potential budget deficit (Turn to page 9) implies that it will be hard to receive the consent of Alexei Kudrin. On Thursday, Putin approved profit-tax breaks.
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Government to spend 4 trillion roubles on Topol ICBMs and tanks
By Maxim Tovkailo
Konstantin Makiyenko, deputy director of the Moscow-based Centre for Analysis of Strategies and Technologies, said the 4-trillion rouble sum, mentioned by Prime Minister Vladimir Putin, had been discussed for over a year. He said the allocations would be spent on weapons and military-equipment procurement and on other military logistics-support programmes, including fuel, food and uniforms.
"Although the allocations were expected to increase last fall, this did not happen. On the contrary, we are witnessing the Government's attempt to reduce arms-procurement allocations by an average of 15%," Makiyenko stressed.
He said current state defence contracts could stipulate the purchase of 70 Topol-M-class inter-continental ballistic missiles, 30 Iskander theatre-level missile systems, 48 combat helicopters, six unmanned aerial vehicles, 60 other helicopters, 14 ships, 300 tanks and 2,000 motor vehicles.