On November 9, Vladimir Putin settled a scandal around the disrupted 2011 state defence contracts. The last contracts for the construction and development of Yasen-class and Borei-class submarines were signed at the Sevmash Production Association in his presence. The signing ceremony was repeatedly delayed because the Ministry of Defence was unable to negotiate price issues with the companies involved.
A contract for the development of the Project 885 M Yasen (Ash Tree) class submarine has been signed with the St Petersburg-based Malakhit Design Bureau for Marine Engineering. Another contract for the development of the Project 955 A Borei class submarine has been signed with Rubin Central Design Bureau for Marine Engineering. One more contract for the construction of an updated Project 21300 Igor Belousov rescue vessel has been signed with the Admiralty Shipyard.
The Ministry of Defence has also signed a contract for the construction of five more Yasen-class submarines with United Shipbuilding Corporation. A Defence Ministry source told the paper that a contract for the construction of five Borei-class submarines will also be signed next year.
The military continues to bargain with industrialists. But the contract with the Malakhit Design Bureau is so far the only document stipulating the precise costs of the contracted work. Anatoly Tyukov, vice president of United Shipbuilding, told the paper that 13.3 billion roubles' worth of federal funding will be spent on developing the Yasen submarine. This sum was reduced still further during talks. Tyukov said the cost of Borei-class submarines was still under discussion, and that negotiations with equipment suppliers were ongoing. The submarine's engineering will cost the state an estimated ten billion roubles, Tyukov noted. As far as construction of the Yasen-class submarine is concerned, specific costs will be discussed after signing the contract. Tyukov said they were referring to the construction of one submarine.
"It costs $4 billion to build a similar submarine in the United States, but Russian submarines will cost two to three times less," Tyukov told the paper.
After the signing ceremony, Vladimir Putin said the contracted cost would total 280 billion roubles. In an effort to prevent defence-contract setbacks, the prime minister ordered changes in the procedure for approving such defence contracts. From now on, the Defence Industry Commission will submit state defence contracts for three-year periods.
"Defence industry companies must have sufficient funding to invest in capitalisation and to hire young specialists. The Ministry of Defence specifies 20% profitability in the contract, and this is enough to accomplish these objectives," Putin said.
The prime minister added that the Ministry of Defence headed by Anatoly Serdyukov was willing to specify 30%-35% profitability if the concerned companies could provide feasibility studies. Plants whose managers are prepared to spend the funding on retooling and production modernisation projects, can expect these profits. Specific transaction terms were formalised virtually in "manual" mode. The prime minister's spokesman, Dmitry Peskov, said Putin had conferred Wednesday morning with Deputy Prime Minister Igor Sechin, Minister of Defence Anatoly Serdyukov and Roman Trotsenko, head of United Shipbuilding, and that the Navy's state defence contracts had been coordinated only after this meeting.
Although Sevmash has been awarded a contract for only one submarine, corporate executives are counting on a major civilian contract. A corporate source told the paper that they are waiting to sign a contract for the construction of four nuclear-powered icebreakers in the near future. The icebreakers would operate along the Northern Sea Route.
Sevmash has every chance to obtain this contract because the only rival company, which can make similar vessels, is located in St Petersburg. Valentina Matviyenko, in her tenure of governor of St Petersburg, had decided some time ago to relocate the manufacturing of nuclear-powered vessels from the city, so as not to damage the Baltic Sea environment. Consequently, Sevmash would remain the only enterprise capable of building nuclear-powered icebreakers, unless Matviyenko's successor, Georgy Poltavchenko, changes these plans.
Anastasia Novikova
