Tag Archives: Sevmash

Nyet Means “Not Yet”

Posted on November 4, 2011 | 2 comments

Fleet Admiral of the Soviet Union Kuznetsov (photo: Denis Abramov)

Russian aircraft carrier lobbyists — admirals and shipbuilders — define persistence.  To them, nyet means “not yet” or “keep trying.”

Izvestiya’s Denis Telmanov reported this week on future plans to build two new nuclear-powered aircraft carriers by 2027 — one for the Pacific Fleet and one for the Northern Fleet — along with 15-ship battle groups to surround them.

After years of arguing, the admirals reportedly decided they need carriers (not just nuclear subs and cruisers) to “broaden the Russian Navy’s zone of influence in the Pacific Ocean and North Atlantic.”

The Navy is reportedly completing the “technical tasks” for a new carrier, with a first design due next year, and the final one by 2017.  The first hull is supposed to be launched in 2023.  According to Izvestiya, sections and components will be built in several shipyards, but final assembly will be at Sevmash to save resources instead of building a new yard large enough to put a carrier together.

The article might be as much about where carriers would be built as if they will be.  There has been talk that the nascent New-Admiralty Wharves could get this work.

Izvestiya says land-based carrier trainers at Yeysk and Saki (NITKA) in Crimea will be used.  The paper also notes the new carriers will need new support bases because the lack of them “killed” or complicated the service lives of Soviet “heavy aircraft-carrying cruisers,” including the Kuznetsov.

One surmises that Russia’s coming experience with building, basing, and operating Mistrals will affect all this too.

But let’s rewind a bit . . . Navy CINC, Admiral Vysotskiy said in early 2010 that Russia plans to launch a carrier by 2020.  Defense Minister Serdyukov, however, has said twice in the last year that Russia has no plans to build carriers in the near future [by 2020].  On July 1, he emphasized that the Genshtab and Navy will decide on the need for an aircraft carrier after a “preliminary design” is complete.

No matter how much some say “Russia must have aircraft carriers,” it ain’t necessarily so. 

It ain’t so because (1) Russia may have more important requirements to fill with its limited resources, and (2) the people talking about carriers ain’t the same people who ultimately decide which requirements get met. 

Telmanov’s article is full of this:

“Strategists insist . . . .  The Navy has decided . . . .  The admirals have selected . . . .  In the military’s opinion . . . .  A Navy Main Staff representative explained . . . .  The military is deciding . . . .”

Not this:

“The president has decided . . . .  The government has selected . . . .  The VPK insists . . . .  The defense minister explained . . . .  In the General Staff’s opinion . . . .”

When we read that these types of people have decided to build carriers, it might really happen.

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Difficult Course to a Grand Fleet

Posted on October 6, 2011 | 1 comment

Konstantin Bogdanov sees reason for pessimism when looking at the course ahead for rebuilding Russia’s fleet.  Writing in Friday’s Nezavisimoye voyennoye obozreniye, he says, despite an intention to spend 4.7 trillion rubles of the ten-year GPV on the Navy, there are technical challenges, clearly impractical schemes, and failures in what he calls the “organization-financial plan” ahead. 

Bogdanov provides us a handy review of the state of Russian shipbuilding.

He points first to OSK’s insistence on seeing new aircraft carriers (with nuclear-powered destroyers in their battle groups) on the Russian Navy’s horizon.  But Defense Minister Serdyukov has only a cold rebuff for the idea.  Early R&D into what a new carrier might look like is as far as he’s being willing to go.  It was made pretty clear that a carrier isn’t part of this GPV.

Bogdanov says OSK may be looking for work for the New-Admiralty Wharves it sees on Kotlin Island in the future.  The 30- to 60-billion-ruble shipyard could be ready in 2016.  An aircraft carrier project would help launch this idea.

Then Bogdanov turns to the Navy’s more immediate needs — frigates and corvettes.  

Proyekt 22350 frigates are needed by tens, if not 30, or even 40, of them.  But Northern Wharf is having trouble building them.  Lead unit Admiral of the Fleet of the Soviet Union Gorshkov was five years in construction, and its underway testing isn’t complete.  Fleet Admiral Kasatonov was laid down just about two years ago.  Its SAM system, Poliment-Redut with 9M96 missiles isn’t ready, and will have to be fitted right to finished frigates.  But Bogdanov sees the frigates’ VLS — the Multipurpose Ship Fire System (UKSK or УКСК) as a positive step.  It could fire antiship, antisubmarine, land-attack cruise missiles, torpedoes, and possibly SAMs.

When proyekt 22350 didn’t come along quickly, Bogdanov says, the Navy went for its own proyekt 11356M frigates like those being built for India.  But, he notes, Baltic Shipbuilding Plant “Yantar” in Kaliningrad isn’t having an easy time constructing them for its Indian and Russian customers.  There are delays in the Indian units, but Admiral Grigorovich and Admiral Essen have been laid down for Russia, and Admiral Makarov should join them soon.  The contract for a second batch of three was just signed.  They’re supposed to be “localized,” but may actually be more like the Indian versions.  They’re slightly cheaper than the proyekt 22350 at 10 billion vs. 16 billion rubles per ship.

Northern Wharf has the order for nine proyekt 20380 Steregushchiy-class corvettes (with the proyekt 22350 frigates this comes to more than 220 billion rubles).  Soobrazitelnyy (proyekt 20381) began sea trials this year, Boykiy was launched, Stoykiy is under construction, and Provornyy (proyekt 20385) was laid down.  Sovershennyy (proyekt 20380) remains under construction at Komsomolsk-na-Amure.  Bogdanov says the proyekt 20385 ships will have an eight-cell UKSK.

Bogdanov notes, however, that Northern Wharf’s production won’t be steady until its ownership issue is finally resolved.  If OSK takes over, this could have a good or bad effect on fulfilling defense orders, but the current financial questions around Northern Wharf are even worse.

Turning to submarines, Bogdanov believes the situation is more transparent, but there are still questions.

The SSBN picture is pretty clear.  Proyekt 955 Borey-class SSBNs finally have a missile that looks like it works.  Yuriy Dolgorukiy has fired it, and Aleksandr Nevskiy might this year.  Vladimir Monomakh is under construction, and they’re preparing production materials for Saint Nikolay.

The problem, he notes, is units 1 and 2 used sections and components of proyekt 971 and 949A submarines never built.  Units 3 and 4 will be built from scratch, and it’s too early to say how this will be reflected in their cost.  Bogdanov concludes another battle over inflated prices awaits, and there is, of course, still no 2011 contract with Sevmash.

It’s less clear with the multipurpose proyekt 885, Yasen-class, of which the Navy wants ten by 2020.  But these boats have been the focus of the Defense Ministry’s familiar complaint about unjustified price increases.  Unit 1 Severodvinsk was built from materials and resources on hand, and its rising price was frozen at 47 billion rubles in 2005.  The Defense Ministry says Sevmash wants 112 billion for unit 2 Kazan. 

Bogdanov thinks it’s hard to tell who’s justified here.  There is structural industrial inflation, and a higher costs could be the result of the frozen handover price on Severodvinsk.

Bogdanov mentions the thought given to cheaper attack boats like the Victor III or Akula, or proyekt 957 Kedr which never left the design phase.  The Yasen is intended to replace Soviet-era SSNs and SSGNs, but Bogdanov thinks it’s too complex and expensive to be built in the numbers Russia may need.  Twenty years ago the Russian Navy was planning for not less than 30 [sized of course against the U.S. fleet], and currently it has not more than 30 SSNs and SSGNs, and this is considered insufficient. 

Despite the uncertainty above, Bogdanov says one still hears talk about the need to develop a fifth generation submarine, but it’s unknown if there will be any development work on one.
 

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GOZ War Winding Down?

Posted on September 17, 2011 | 3 comments

Vedomosti’s Aleksey Nikolskiy sees a possible end to the conflict between the Defense Ministry and industry over the production of strategic nuclear systems.  His OSK source claims a multiyear Defense Ministry contract with Sevmash for proyekt 955 Borey-class SSBNs will be concluded in the coming week.  This would reportedly leave OSK with just one contract remaining to be completed.

Conclusion of a 40-billion-ruble contract for three proyekt 11356M frigates was announced Wednesday.

Vedomosti’s source said the Defense Ministry and OSK also finished a deal for proyekt 885 Yasen-class SSNs several days ago.  The paper once again cites Konstantin Makiyenko’s 500 billion ruble price tag for the new SSBNs and SSNs.

An industry source tells Vedomosti that all MIT’s ballistic missile contracts are complete.

While deals for renovating Russia’s strategic forces are apparently done at last, not all contracts for conventional armaments are finished, particularly those involving Rostekhnologii and its enterprises, according to the director of one of them.

What’s this mean?

The conclusion of submarine / SLBM / ICBM production contracts would be a relief to both sides since their absence has been the biggest GOZ news story.  If all this is done, or almost done, one would expect a major government or Defense Ministry press announcement soon.

If the submarine deals are worth 500 billion rubles, that is, once again, apparently closer to Defense Minister Serdyukov’s price than to OSK’s.

The proyekt 11356M frigates are updated Krivaks (or Talwars for India), and they aren’t exactly cheap.

The issue of incomplete contracts with Rostekhnologii’s enterprises is significant given the size and breadth of their work on weapons and military equipment.  People will ask which enterprises and systems are in question.  It also contradicts Serdyukov’s recent claims that only OSK deals needed to be inked, and implies there are lingering problems and issues in areas other than shipbuilding.

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The GOZ Last Week (Part II)

Posted on September 6, 2011 | Leave a comment

We looked at last week’s news.  What’s it mean?  There wasn’t a lot of commentary about it, but there were two very good pieces.

To backtrack a little, if it looks like Defense Minister Anatoliy Serdyukov might be (just might be)  getting an upper hand on forcing defense producers to his prices instead of vice versa, then the commentaries give insight into what is happening (or may happen) if Serdyukov succeeds in driving hard bargains with the OPK.

Moskovskiy komsomolets’ Olga Bozhyeva asked a general who worked on the GOZ to comment on this year’s situation:

“The Defense Ministry now lacks an organ with responsibility for contracting work, beginning with formation of initial prices and ending with accepting the results.  In the past, the chief of armament’s apparatus performed these functions, currently it’s been transformed into a department with unintelligible functions.  Tax organ officials who’ve come into the Defense Ministry’s key financial posts can’t connect the price of a product with the characteristics of the model being produced and its contribution to the country’s security.  In the Defense Ministry in recent years, three basic methods of calculating the cost of a product have been introduced, but not one of them factors in the substantive part of the work.  They are all built on the principle:  I have a certain amount of money, I want to give you this much of it.  But putting it to concrete use no longer interests anyone.  And it turns out that the methods of calculating prices in the Defense Ministry and in VPK enterprises are different.  The people speak different languages . . . .”

Bozhyeva concludes:

“In a market economy, you have to survive somehow.  Here is not America, where work for the Pentagon brings a good profit.  With us, it only allows you to survive.  And that is if they allow it.  But they don’t let everyone.”

“Here not long ago the Defense Minister got indignant, for example, that shipbuilders [Sevmash] had become so brazen that they also put the cost of kindergartens and other “social benefits” into the price of a missile-carrier [SSBN].”

“I’m not a taxman, evidently, since I don’t understand:  but where can they put it?  Let’s take Severodvinsk here.  It is completely dependent on “Sevmashpredpriyatiye.”  Like it or not, the kindergartens, schools, hospitals, clinics, housing – the factory has to maintain all of it.  And, naturally, they put the upkeep into their production cost.  How can it be otherwise?  If there aren’t kindergartens – there aren’t missile-carriers.”

Editorializing in Nezavisimaya gazeta, Viktor Litovkin writes:

“What are the causes of such an ‘inability to agree?’  In the fact, in my view, that it’s impossible to marry purely administrative approaches to the imposition of concrete military department prices on defense enterprises with largely market relationships which exist for the defense sector today.  With achieving that degree of Gosoboronzakaz profitability in which enterprises have the chance not just to survive, but also develop.  Several defense NII and factory directors, undoubtedly following the example of MIT General Designer Yuriy Solomonov, have already even stopped ‘fearing’ to publicize their disagreements with the Defense Ministry in front of journalists.  General Director of NII Instrument-building named for Tikhomirov, Yuriy Belyy told me ‘in the ordering structures of the military department people have come, who, to put it mildly, don’t understand anything about production and price formation’ (this, by the way, also means Anatoliy Serdyukov. – ‘NVO’ No. 25).  ‘Still they always demand the reduction of invoiced expenditures, reduction of profits, of labor input.  And often arbitrarily disregard prices on final goods.’  This, in his words, is happening all over the defense sector.”

“’If we had the GOZ alone, the enterprise would have died long ago,’ Yuriy Belyy told me.  ‘There are practically no resources remaining for development after GOZ fulfillment.  It isn’t understood that wages take according to some kind of averaging principle.  Invoicing expenses also.  So goes the practical strangulation of the defense sector.  In the country’s leadership they say that the OPK’s profitability is the locomotive of industry, should be not less than 15%, but in fact it’s not more than 5-7%.  And, the main thing, not understood, is with whom to talk in the Defense Ministry.  Completely incompetent people have arrived.  Their mission is not the development of industry, not increasing the country’s defense capability, their mission is to save money by any means.’”

“An enterprise producing a final product, like ‘Dolgorukiy,’ which buys metals, nuclear reactors, various components at market prices from the monopoly producers of these products, can’t give away the good created by its workers lower or a little, one-two percent, higher than its own cost, or lower than its profitability level.  It can’t buy new machine tools, technology, reequip its production line, train and select new highly-qualified personnel, provide them housing . . . .  It can’t not think about tomorrow.”

“And from the other side, if it’s possible to pay the French one and a half billion Euros for ‘Mistrals’ we need or don’t need, then why does ‘Sevmash’ have to give away a strategic submarine extremely essential to the Navy and Russia for free?!”

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The GOZ Last Week (Part I)

Posted on September 4, 2011 | Leave a comment

Let’s start with the news.  In short, Defense Minister Serdyukov told the press all GOZ-2011 contracts, except ones with OSK, were signed.  But most news outlets concluded he failed to meet Prime Minister Putin’s August 31 deadline for finishing the contracting process.

ITAR-TASS reported the Defense Ministry signed its fourth contract with OSK on August 29.  It was with Baltic Shipbuilding Factory “Yantar” for three Proyekt 11356M frigates.  Kommersant reported others are with Admiralty for three Proyekt 636 diesel-electric submarines and with Zvezda Shipyard in the Far East for nuclear submarine (probably OSCAR II-class) repairs and modernization.

But the largest and most important contracts with Sevmash for Proyekt 955 Borey-class SSBN and Proyekt 885 Yasen-class SSN production are still not signed.  The contract is supposed to cover two of the former and one of the latter that are already (or almost) complete.  Kommersant says the contracting delay means a fourth 955 and second 885 won’t be laid down until sometime in 2012.

ITAR-TASS concluded there are still differences over pricing although there is progress in the negotiations.  The wire service writes that Sevmash refuses to make concessions taking below a minimum profitability level, while the Defense Ministry calls price increases unjustifiable, and says it will only pay for concrete items regardless of the producer’s profitability.

On September 1, ITAR-TASS reported Serdyukov’s announcement that, on the whole, the Prime Minister’s order to conclude all GOZ contracts had been fulfilled.  It provided some choppy, weaseling quotes from Serdyukov:

“We are reprogramming for other requirements – precision weapons mainly, aviation, air defense . . . some suppliers because of some obstacles can’t provide their products.  . . . now we’re making changes – on the order of 30 billion [rubles].  . . . in essence, this is a formality  . . . .  Essentially, we’ve been through the entire agreed part.  The signing itself occurred yesterday-day before yesterday.  Only the United Shipbuilding Corporation contract remains.  Perhaps that’s all.”

Kommersant added Serdyukov’s comment that:

“We, unfortunately, can’t accept the figures which industry gives us.  For the most part, they are simply unjustified.”

Kommersant’s sources maintain, in addition to OSK, contracting with OAK and MIT remains incomplete, and no one’s willing to guess when this still-difficult process will end.

On September 2, Kommersant’s source said part of MIT’s contracts are done, but it would be premature to say the process is complete.

ITAR-TASS added that Sevmash’s contract is now supposed to be signed in mid-September.  The factory reportedly will agree to current prices for its submarines in exchange for some kind of “coefficient” to offset their rising costs starting in 2013.  The wire service also claimed there are now 6 of 13 OSK contracts signed.  And it put the cost of a Borey-class SSBN at a somewhat hard-to-believe 23 billion rubles.  OAK and MIT sources also told ITAR-TASS their contracts aren’t complete.

Vedomosti cited Konstantin Makiyenko on long-term submarine production costing 500 billion rubles.  If that’s eight Borey– and eight Yasen-class boats, it’s a $17 billion contract, basically $1 billion per submarine.  Thirty billion rubles a boat is a lot closer to 23 billion than the 47 or 112 billion that Serdyukov complained about in July.

Despite indications to the contrary, one has to wonder if Serdyukov isn’t very slowly winning his battle with the OPK.  But ultimately, it’s hard to say before we see what gets delivered, when, and how good it is.

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Latest on GOZ Woes (Part II)

Posted on August 28, 2011 | Leave a comment

To review this week . . . Prime Minister Putin’s current deadline for completing GOZ contracts is August 31, but it’s unlikely to be met, even by loyal Deputy PM and OSK Board Chairman Igor Sechin.  Deputy Finance Minister Siluanov said Defense Ministry contracts are being made on credits and government-backed financing rather than cash.  Putin said the price tag for GOZ-2011 is 750 billion rubles, but 30 percent of projected procurement still isn’t covered by contracts as the final third of the year begins.

How did the government, Defense Ministry, and OPK arrive at an August 31 deadline that’s unlikely to be met?

The latest round of this year’s GOZ woes started in early July when MIT General Designer Yuriy Solomonov told Kommersant that GOZ-2011 was already broken, and Russia’s strategic missile inventory is not being renewed as necessary.  He said there’s no contract for the RS-24 / Yars ICBM, and the late arrival of money makes it impossible to salvage 2011.

President Dmitriy Medvedev responded by calling Defense Minister Anatoliy Serdyukov on the carpet.  According to RIA Novosti, he told him:

“Sort out the situation.  If there’s information that the state defense order is broken, it’s true, organizational conclusions are needed in connection with those who are responsible for this, regardless of position or rank.”

“If the situation is otherwise, we need to look into those who are sowing panic.  You know how according to law in wartime they dealt with panickers — they shot them.  I’m allowing you to dismiss them, do you hear me?”

RIA Novosti reported Serdyukov’s opinion on the “wild growth” in the price of military products, especially from MIT and Sevmash.  He said MIT is asking 3.9 billion and 5.6 billion rubles respectively for Topol-M and Yars ICBMs.  Serdyukov put GOZ-2011 at 581 billion rubles [different from Putin’s figure!], and added that only 108 billion, or 18.5 percent, was not yet under contract.  He said everything would be done in 10 days.

At virtually the same time, Deputy PM and VPK Chairman, Sergey Ivanov told ITAR-TASS 230 billion rubles were not yet contracted out.  OSK piled on Serdyukov, claiming contracts for 40 percent of the Navy’s share of the GOZ weren’t finalized.

In late July, it looked like Northern Wharf (which reportedly produces 75 percent of Russia’s surface ships, and is not part of OSK) might be made into an example for other “GOZ breakers.”  While prosecutors talked vaguely about the misuse of GOZ money, the shipbuilder’s representatives apparently mounted a vigorous defense, asserting that the enterprise has been right on time, even though it’s underfinanced by the Defense Ministry.

Main Military Prosecutor Sergey Fridinskiy said prosecutors uncovered 1,500 GOZ-related legal violations during the preceding 18 months.  He indicated there were 30 criminal convictions, and state losses amounted to millions of rubles in these cases.  The most egregious example  was the theft of over 260 million rubles given to OSK’s Zvezdochka shipyard to repair Kirov-class CGN Petr Velikiy.  Fridinskiy indicated the enterprise director and his close associates apparently had 40 million of the money in their own names.  Recall Fridinskiy earlier said 20 percent of defense procurement funding is stolen.

According to Rossiyskaya gazeta, Defense Minister Serdyukov claimed he was on the verge of signing contracts with MIT for Topol-M and Yars production.  Once again, he said all contracting would be finished in two weeks.

In mid-August, OSK enterprises Sevmash, Admiralty Wharves, and Zvezdochka said they would soon be forced to cease work unless the Defense Ministry signed contracts with them.  Putin, Sechin, and Serdyukov met and launched a special interdepartmental commission to set prices for the Navy’s remaining 40 billion rubles in GOZ contracts.  And, according to Kommersant, everyone was once again reassured that all contracts would be completed in two weeks.

And it’s not just all ICBMs, ships, and submarines . . . Kommersant wrote that the Defense Ministry eschewed contracts for 24 or more MiG-29K and more than 60 Yak-130 trainers at MAKS-2011.

So what does the mid-year GOZ picture look like? 

The president and prime minister have fumed and set a series of deadlines, not met thus far.  And the defense minister and deputy prime ministers have assured them they would meet each deadline in turn. 

More interesting, and somewhat unnoticed, is the fact that the prime minister and defense minister (among others) seem to be consistently working from different sets of numbers on the size of the GOZ, and how much has been placed under contract.  The GOZ hasn’t captured this kind of leadership attention at any time in the past 20 years.

Producers are being honest when they say late state contracts mean they can’t do anything (or at least what the Defense Ministry wants them to) in what remains of the year.

Picking up the pieces of GOZ-2011, and trying to put GOZ-2012 on a better footing will occupy the rest of this year.

Lost in everything is what will the Russian military get eventually by way of new hardware, and when will they get it?  And how good will it be?

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Failure to Launch

Posted on August 22, 2011 | Leave a comment

SSBN Yuriy Dolgorukiy (photo: RIA Novosti / Sergey Guneyev)

Not the same as a failed launch, of course . . .

Interfaks reports proyekt 955 Borey-class SSBN Yuriy Dolgorukiy cancelled a Bulava test launch on Saturday.  According to Sevmash, the power supply to one of Dolgorukiy’s systems malfunctioned.  The submarine returned to the factory to investigate.  The Interfaks source said the state commission supervising Bulava testing indicated the launch would be put off until late this week.

The source emphasized there aren’t issues with the Bulava, which was fully ready for launch.  Interfaks recalled the 15th launch scheduled for last December was delayed until June because Dolgorukiy wasn’t ready, although the official reason was White Sea icing.  The June launch from the submerged Dolgorukiy was successful.

In Moskovskiy komsomolets, Olga Bozhyeva’s source says the problem was a sensor in a system needed to prepare the missile for launch.  They postponed until later Saturday, but, when they couldn’t fix it, the SSBN returned to port Sunday morning.  The source says the state commission will probably delay the next launch attempt until September.

RIA Novosti provided a more official spin on the cancelled test.  It emphasized there was no unsuccessful launch.  The news agency’s state commission source stressed that, when submarines go to sea for system testing, the commission makes its decisions based on many factors and conditions.  And the source stated the Bulava flight test program will be completed in the established time frame.

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Severodvinsk Trials and GOZ Tribulations

Posted on July 14, 2011 | 1 comment

Severodvinsk (photo: RIA Novosti / Vladimir Rodionov)

Your typical good news, bad news story . . . happily for the Russian Navy, the Severodvinsk is nearing its first at-sea testing, but the new submarine has also been held up as a prime example of outrageous price increases in this year’s state defense order.  Final delivery of this SSN, as well as the first two Borey-class SSBNs, represents a big part of troubled GOZ-2011.

RIA Novosti reports new fourth generation Yasen-class (proyekt 885) SSN Severodvinsk will soon head into the White Sea for two months of underway testing, according to Malakhit Design Bureau General Director Vladimir Pyalov.  He added that, after this at-sea period, the final phase of state testing will take place.  

A very precise Mr. Pyalov says Severodvinsk is currently 98.9 percent complete.  He thinks the Navy will accept the new boat before year’s end and, in all, six of these multipurpose submarines will be built.  The second proyekt 885 Kazan is slated for delivery in 2015. 

RIA Novosti says proyekt 885 is a double-hulled, single-shaft boat with a reduced acoustic signature.  The conning tower has a streamlined, oval shape.  The boat is divided into ten compartments. 

For the first time, according to RIA Novosti, Russian designers put the submarine’s torpedo tubes amidships to allow for a new bow-mounted sonar system.  Proyekt 885 has eight vertical launch tubes for supersonic cruise missiles.  It has new communications and navigation systems as well as a fundamentally new nuclear power plant, according to the news agency’s report.  The new submarine is said to be first in noise reduction and stealth among attack submarines worldwide.

But the Severodvinsk couldn’t evade detection in the furor over breakdowns in the state defense order.

Earlier this month, RIA Novosti reported on disputes between the United Shipbuilding Corporation (OSK), submarine-builder Sevmash, and the Defense Ministry over naval construction in this year’s GOZ.  In particular, the military accuses the builder of doubling its prices for proyekt 955 Yuriy Dolgorukiy and proyekt 885 Severodvinsk.

An OSK spokesman defended Sevmash saying the cost of its work on Severodvinsk is only 30 percent of the total price, with the balance being the cost of armaments and components supplied by several dozen enterprises.  He blamed inflation in the industrial sector and the economy more generally.

Summarizing his discussion of submarines with OSK, RIA Novosti reports, Defense Minister Serdyukov said:

“They are giving us an increase in prices on new orders, and, naturally, we don’t agree with this.”

But, he added he’s convinced the Defense Ministry will persuade the producer to lower its prices.

Izvestiya mentioned that Severodvinsk was originally intended for a production run of 30 submarines, now reduced to six more than 20 years later.  As recently as March, the Navy still publicly hoped for ten.

Serdyukov told the paper:

“. . . it’s incomprehensible what the price of the ship [sic] consists of, if the cost of the lead boat was 47 billion rubles ($1.7 billion), but the next, exactly the same is now 112 billion ($4 billion).”

“Of course, the price will grow if, in the cost of one ship [sic], they include all accompanying expenditures on other enterprise projects in no way connected with it, like maintaining kindergartens, infrastructure, etc.”

“We’re prepared to pay, but on the condition that the price formation process will be transparent.  As practice shows, if all articles in the contracts are “decoded,” then it seems it’s possible with confidence to deduct up to 30% from the final cost of a finished product.”

These must be bitter words for an enterprise that went many, many years without completing its trademark product — a nuclear-powered submarine.

A Sevmash source says the cost of submarine construction is directly related to higher prices for materials, energy, and integration:

“The entire range of equipment for a submarine is supplied by monopolistic companies trying to dictate their prices.”

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Dolgorukiy Returns to Sea

Posted on June 7, 2011 | Leave a comment

This morning ITAR-TASS reports that fourth generation Borey-class SSBN Yuriy Dolgorukiy is at sea for testing.  This is the boat’s first underway period of 2011. 

At the close of last year’s Arctic navigation season, Dolgorukiy returned to the hall at Sevmash, where it was prepared for the concluding phases of its state underway testing.  Sevmash says the submarine should be officially handed over to the Navy within the next few months.

Recall the Russian press reports that modified Typhoon SSBN Dmitriy Donskoy will be the launch platform for this year’s first Bulava SLBM test.

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Nikolskiy on GOZ-2010 Failures

Posted on March 3, 2011 | Leave a comment

On Tuesday, Vedomosti’s Aleksey Nikolskiy wrote about breakdowns in last year’s State Defense Order (GOZ).  He notes that concern about failures started with Roskosmos, but it isn’t limited to that part of the defense sector.

Nikolskiy recounts Deputy Prime Minister Sergey Ivanov’s session with the Roskosmos collegium.  The space industry only produced five of 11 satellites specified in GOZ-2010, and 6 civilian launches were postponed.  The three GLONASS satellites lost to a “childish mistake” [in filling the rocket’s tanks] cost 2.5 billion rubles.  But we’ll return to Russia’s space woes another day. 

A Defense Ministry source tells Nikolskiy GOZ failures are constant. 

Bulava SLBM delays kept Yuriy Dolgorukiy from entering service [remember the new SSBN itself had to return to Sevmash for work while it awaits the next Bulava test].  Introduction of the new Severodvinsk SSN has been put off until much later because of construction defects.  A United Shipbuilding Corporation (OSK) source tells Nikolskiy the Defense Ministry has stopped financing completion of a proyekt 677 diesel-electric sub, and work on two others laid down at Admiralty Wharves is in question.

Nikolskiy says the Air Forces’ assimilation of Yak-130 trainers is delayed by last March’s crash.  And there’s a serious delay in the testing of the Su-35 fighter, according to a Defense Ministry officer [Sukhoy was reportedly testing two Su-35s last August].  One enterprise manager claims reforms in the Defense Ministry purchasing system are holding back contracting for aircraft deliveries this year. 

CAST’s Konstantin Makiyenko says government and Defense Ministry criticism of industry for its GOZ failures could be followed by personnel changes.  In Roskosmos’ case, the situation is almost “overripe.”  But Makiyenko defends other Russian arms producers by noting that delivery delays are common even for U.S. and European manufacturers.

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