Tag Archives: Sergey Chemezov

Defense Procurement in Decline?

Is the Russian MOD’s procurement declining?  It’s difficult to say, but a quick survey seems to show it hasn’t, at least not yet or by much.

buk-m3

Buk-M3

Although Russian procurement data is far from independent and probably far from complete, what Moscow claims was procured for the military is still useful. Below find a side-by-side comparison of what the MOD says it bought in the third quarter of 2015 and in the third quarter of this year.

The reporting comes from Krasnaya zvezda for 2015 and 2016, and from TASS and Bmpd.

3rd-quarter-comparison

Year-on-year in the third quarter, procurement of aircraft and helicopters appeared down.  Purchases of air-delivered ordnance were higher in 2015 because the MOD needed to replenish stocks of missiles, rockets, and bombs expended in Syria.  Deliveries of ICBMs and ships were lower in the quarter just completed.  But the navy received substantial numbers of new cruise missile systems.

The MOD reported that 62 percent of the state defense order (GOZ) was complete in the third quarter.  It also said the armed forces’ inventory of weapons and equipment is now 48 percent modern.

This week Sergey Chemezov, head of government-owned defense industrial conglomerate Rostekh and friend of Putin, echoed the president’s recent warning to firms to plan for a time without large military orders.  Chemezov said Rostekh believes GOZ procurement will peak in two years and be no more than 50 percent of its total output by 2025.

Shoygu’s Inherited Dilemmas

Shoygu and Serdyukov

Shoygu and Serdyukov

Before Russia’s holiday topor fully enshrouded military commentators, Gazeta’s Sergey Smirnov published an interesting piece on the situation in which Defense Minister Shoygu finds himself.  There isn’t a lot of great comment on Shoygu yet, but it might be cranking up.  Smirnov looks at how the popular Shoygu could mar his well-regarded career while tackling the same accumulated military structural problems that faced his predecessor.  He writes about possible bureaucratic and personal conflicts with Sergey Ivanov, Sergey Chemezov, and Dmitriy Rogozin.

Leftover Problem One:  Contract Service

According to Smirnov, Russia’s military added virtually no contractees in 2012, but still has to recruit 50,000 of them every year until 2017 to reach its assigned target of 425,000.  The obstacles are the same.  Eighty percent of them don’t sign a second contract because the army doesn’t offer living conditions more attractive than barracks.  Undermanning is a related problem.  Smirnov says the military’s manpower is certainly below 800,000.  And Shoygu may have to acknowledge this problem.

Leftover Problem Two:  Bureaucratic Competitors

Smirnov describes Serdyukov’s conflict with Rogozin over the OPK and its production for the military.  He claims the “Petersburg group” of Sergey Ivanov, Chemezov, and Viktor Ivanov wanted one of its guys to take Serdyukov’s place at the Defense Ministry.  But Putin didn’t want to strengthen them, so he took the neutral figure Shoygu.

According to Smirnov, Serdyukov wanted out, and wanted to head a new arms exporting corporation to replace Rosoboroneksport.  That, of course, conflicted directly with Chemezov and the interests of the “Petersburgers.”  And Smirnov makes the interesting comment:

“But that appointment [Serdyukov to head a new arms exporter] didn’t happen precisely because of the big criminal cases which arose not by accident.”

Was Serdyukov done in for overreaching rather than for corruption scandals in the Defense Ministry?

Shoygu, writes Smirnov, was not thrilled at the prospect of continuing the “not very popular” army reforms.  Smirnov is left at the same point as everyone else:  will it be a “serious revision” of Serdyukov’s reforms or a “course correction?”

There’s lots of talk to indicate the former rather than the latter.  The new VVS CINC has bloviated about returning to one regiment per airfield instead of large, consolidated air bases.  He claims the Krasnodar, Syzran, and Chelyabinsk Aviation Schools will be reestablished.  He babbles about going to a three-service structure and retaking VVKO.  Shoygu will allow Suvorov and Nakhimov cadets to march in the May 9 Victory Parade.  He stopped the Military-Medical Academy’s move out of the center of Piter.  Other commonly mentioned possible revisions are returning to six MDs and transferring the Main Navy Staff back to Moscow.

Leftover Problem Three:  Outsourcing

Serdyukov’s outsourcing policy led to scandals, and didn’t work for the Russian military’s remote bases.  Gazeta’s Defense Ministry sources say the structure and activity of Oboronservis will likely be greatly modified or, less likely, Oboronservis will be completely disbanded if some workable entity can take its place.

Leftover Problem Four:  Military Towns

The military wants municipal authorities to take over the vast majority (70-90 percent) of a huge number of old military towns (that once numbered 23,000) no longer needed by Armed Forces units.  The army only wants some 200 of them now.

The local government wants the military to provide compensation to restore and support these towns, but the latter doesn’t have the funds.  The army is laying out billions of rubles in the next three years, but only to outfit 100 military towns it wants to use.  There is also the problem of who gets, or has the power to give away, legal title to this military property.

Leftover Problem Five:  Officer Housing

Shoygu, says Smirnov, has to solve the unresolved problem of officer housing, especially for officers “left at disposition” of their commanders (i.e. not retired but lacking duty posts and apartments).  The Defense Ministry still doesn’t know how many need housing.  Smirnov writes:

“Despite the fact that the military department daily reports on the handover of apartments, the line of officers retired from the army who are awaiting receipt of living space is not becoming smaller.  At present from 80 to 150 [thousand] former officers are awaiting the presentation of housing.”

More than enough lingering headaches for one Defense Minister.

Not a Fish, But a Crawdad (Part I)

It’s nice when you send yourself on a sabbatical.  But it’s terrible when your first post of the month doesn’t come until the 24th.  Seriously, this author should be flogged for neglecting the reader.  And he isn’t exactly prepared to dive back into frenetic posting either.  Only to hang more text out here now and again.

Serdyukov with Putin (photo: AFP)

This topic and title were stolen from Topwar.ru.  The site picked up on Kommersant’s examination of why Anatoliy Serdyukov was one of only five ministers to retain his post in the first Putin 2.0 government.

Kommersant claims Serdyukov came somewhat close to being retired in December when, at then-Prime Minister Putin’s behest, FSB Director Bortnikov searched out potential replacements.  Bortnikov looked at Rostekh’s Chemezov, Roskosmos’ Popovkin, and Deputy PM and OPK steward Rogozin.  The former pair convinced Putin of the “inexpedience” of making either of them Defense Minister in Serdyukov’s place.  Rogozin reportedly was willing, but, of course, already had a higher-ranking post.

Kommersant’s Ivan Safronov cited Aleksandr Kanshin and a Defense Ministry apparat source to the effect that Putin decided it’d be better to have Serdyukov see the military reform process through to its conclusion.

For its part, Topwar.ru also attributes Serdyukov’s “unsinkability” to a desire to avoid changing leadership in the midst of reform.  It also writes that Anatoliy Eduardovich turned out to be, at least in some ways, the best available and most willing candidate.  Topwar sums Serdyukov’s position up with this adage:

“When there aren’t any fish, even a crawdad is a fish.”

But Anatoliy Rak isn’t likely to replace Taburetkin as a nickname for the Defense Minister.

The most interesting part of Topwar’s account, however, may be the large number of commentaries, which we’ll look at in part II of this post.

German Armor

Serdyukov Wants Troops to Ride Inside

Reports about Russia looking abroad for light armored vehicles and not buying BTR-80s and BMP-3s in GVP 2011-2020 came into better focus this week . . .

On Tuesday Defense Minister Serdyukov announced Russia will buy armor for vehicles and light armored equipment from Germany.  In his meeting with representatives of public organizations, he said:

“The RF Defense Ministry will proceed from the need to guarantee the protection of personnel.”

“We have forced KamAZ and other Russian companies to enter into contacts with foreign firms.  They’ve already begun to make contact in order to buy light armor and use it in reconnaissance vehicles, BTRs, BMPs and other transport means.”

Kommersant talked to KamAZ officials who didn’t know anything about buying armor for vehicles abroad.

Serdyukov said, in particular, they were talking about purchasing light armor from one German company (reportedly Rheinmetall).

ITAR-TASS said Serdyukov was referring to poor protection of personnel inside Russian armored vehicles when he warned:

“We, of course, won’t buy Russian vehicles and armored equipment in the condition they are in.”

“We want Russian industry to produce what we need and what the times demand, so that they (OPK enterprises) will modernize their production and create quality equipment.”

In Stoletiye.ru, Sergey Ptichkin writes that Rostekhnologiya’s Sergey Chemezov and FSVTS’ Mikhail Dmitriyev have concluded that the purchase of foreign arms for the Russian Army is a ‘done deal’ at this point.  Dmitriyev said in particular that the political decision to buy Mistral has been made, and the contract will be signed this fall.

Ptichkin concludes:

“In connection with this, by all appearances, a large number of domestic military programs are being rolled up.  Billions are needed to support the import of ships and weapons.”

Chemezov also said, reluctantly, that Russian armor really doesn’t meet the Defense Ministry’s sharply increased requirements, therefore purchases from Germany are justified.  Ptichkin wonders what Rostekhnologiya’s [Chemezov’s] specialty steel holding will do if Germany supplies Russia’s defense industries.

Media sources alluded to past statements by Deputy Defense Minister, Chief of Armaments, Vladimir Popovkin to the effect that foreign purchases would only be to ‘patch holes’ in the Russian Army and OPK.  They imply that either arms imports have expanded beyond ‘hole patching,’ or the ‘holes’ are bigger than originally thought.

Nezavisimaya gazeta writes that buying armor abroad will be catastrophic for Russian metallurgy.  Without part of the GOZ, they reportedly won’t be able to modernize.  Uralsib metals analyst Nikolay Sosnovskiy said, without state orders, enterprises which still produce something won’t be able to survive.  He said buying foreign armor for BTRs and BMPs will lead to buying it for tanks, which is much more costly.  Sosnovskiy says armor orders were ‘second tier’ for the past 20 years, so no one was working on new types.  On the other hand, Aleksandr Khramchikhin thinks the competition posed by foreign armor will force the Russian industry to improve.

Despite this little uproar, it seems unlikely that the Defense Ministry or Russian government are suddenly ardent fans of free trade in all things.  Moscow’s economic management remains more paternalistic and state-directed than that.  Rather purchases abroad are probably viewed as the only way to:  (a) rearm Russian forces quickly with badly needed high-quality arms and equipment; and (b) shake the OPK enough to get it started on the road to competitiveness.