7 years later

7 years after a decree on establishment of the United Shipbuilding Corporation, it was charged with working out the development strategy through 2030. Actually, the corporation is turning into a “shipbuilding ministry” distributing state orders and orders of state companies.

Putin’s order

Frequent changes of USC managers have finally resulted in the order of RF President Vladimir Putin to work out the Corporation development strategy through 2030. The task given to Vladimir Shmakov, the new head of the United Shipbuilding Corporation, at the meeting held on May 21, 2013, is to be implemented till September 1, 2013 with the report ready by October 15, 2013.

Vladimir Putin set forth major directions to focus. First of all he emphasized naval shipbuilding.

“There are still problems with the timing and quality of orders, including for the defence industry. In particular, there have been unjustifiable delays in the construction and supply to the Navy of several nuclear submarines and ships,” – Putin said. According to him, “Significant funding has been allocated for the comprehensive re-equipment of the Navy and, naturally, the Navy has the right to expect that the arms will be supplied promptly according to schedule and to the required standards. That is, in addition to keeping to the terms stipulated in the contract, the prices must be competitive and reasonable”.

The focus on naval shipbuilding has been quite obvious in Russia’s state policy recently. In March 2013, Deputy Chairman of RF Government Dmitry Rogozin, well known for his statist commitment, visited Novorossiysk and announced the need to speed up the creation of a Naval base there. He stressed that not only military ship repair facilities but also shipbuilding ones are supposed to be created in Novorossiysk.

“It is necessary to create everything necessary for the Black Sea Fleet here so that it could be repaired according to the existing plans and to accept new vessels,” Deputy Chairman said.

The need to build naval ships comes from a gap in this sphere when compared with other potential enemy states (Turkey) as well as from Russia’s accession to a ‘big game’ for influence in strategically important Mediterranean region and at the Middle East where there is nothing to do without a powerful fleet.

“Once again, in the future you must ensure that the corporation’s work on building military ships is stable and fast-paced, and that is one of the main challenges facing the new leadership of the United Shipbuilding Corporation,” Putin stressed the naval construction.

As for the civil shipbuilding, the President demands to develop the production of icebreakers and various high-tech vessels, which are of “strategic importance for our country”.

“This will determine the success of our efforts to expand Russia’s presence in the Arctic and other regions of the World Ocean, the development of natural resources of the Far Eastern and northern seas, and increased economic efficiency of oil and gas projects on the continental shelf,” Putin explained.

Putin also believes it would be right to establish closer cooperation between the USC, Gazprom and Rosneft.

Dreams that never come true

However, neither Putin nor Shmakov touched projects widely announced earlier, like the construction of New Admiralty Shipyard in St. Petersburg or shipyards Vostok-Raffles and Zvezda-DSME in the Far East. No wonder if we take into consideration the drop of interest from foreign partners to them, as we wrote earlier >>>> , as well as weak project feasibility especially that of New Admiralty Shipyard.

According to Vladimir Shmakov, in the sphere of civil shipbuilding, the United Shipbuilding Corporation OJSC would pay special attention to the project on creation of a multi-purpose shipbuilding complex on the basis of the Far East shipyard Zvezda, which is delayed according to Dmitry Rogozin. >>>> 

The USC head marked the necessity to concentrate on technological advance and to arrange work on advanced development of both military and civil facilities for their further introduction. One of the key ways to implement the above tasks should be closer cooperation between the Corporation and the leading scientific centers of the industry and the country, like Krylov State Research Center and Shipbuilding & Shiprepair Technology Center.

It is not an easy task, however. With the crisis developments in global and national economy the state is just not able to finance its all ambitious projects.

As Atomflot Director General Vyacheslav Ruksha said at the round table meeting within the framework of the Murmansk Region Day held in Moscow on May 23, 2013, no decision on state financing of nuclear icebreakers construction has been made by RF Ministry of Finance yet. He says it is explained by the requirement to attract non-state financing. “We will get the first icebreaker in 2017 while the tenders for construction of the second and the third ones are postponed,” said Ruksha. The nuclear icebreaker is under construction at the Baltiysky Zavod in St. Petersburg now.

Besides, Russian shipbuilding companies having no access to ‘long’ money, with low productiveness, high power supply costs etc., will hardly be able to compete with the yards of leading shipbuilding countries in the segment of large capacity construction. Actually, the construction of small-size and medium-size vessels is intensely developing in Russia and it has nothing to do with USC, the more so, as those are mostly private shipyards.

So, a picture is beginning to emerge with USC being not a company striving to take a worthy place at the global shipbuilding market but a kind of a ‘shipbuilding ministry’ distributing state orders (mainly naval ships) and orders of state mineral companies (Gazprom, Rosneft). 

Vitaly Chernov