The version for the print

  • 2013 August 27

    Ministry without portfolio

    The Marine Board, an advisory body of RF Government, is turning into a “ministry without portfolio” destined to coordinate the activities on the development of domestic shipbuilding in the segment of large capacity vessels. The United Shipbuilding Corporation and the Ministry of Industry and Trade are put to the back burner.

    All power to the colleagues

    The decree No 723 signed on August 21, 2013, considerably reforms the Marine Board of RF Government. Earlier, it was an advisory body while today it is actually turning into a ministry in charge of building large capacity vessels with a permanently operating presidium and apparatus. Read more at the website of IAA PortNews >>>>

    Earlier, Deputy Chairman of RF Government Dmitry Rogozin made a corresponding proposal. In his opinion, United Shipbuilding Corporation OJSC fails to manage all the projects. Most of all he criticized the delay in creating large capacity shipbuilding complex in Bolshoy Kamen on the basis of Zvezda shipyard. In the result, the proposal of Rosneft and Gazprombank on creation of a consortium to build this complex was approved. United Shipbuilding Corporation is to be on of the partners in the consortium.

    Dmitry Rogozin also spoke in favor of direct state control of USC companies. So, the Marine Board will to a great extent replace the management of the corporation being a kind of a superstructure above it.

    Besides, the Marine Board will somewhat downgrade the role of the Ministry of Industry and Trade which can focus on the construction of small-size and medium-size vessels, the development of which was covered earlier >>>>

    According to the media, the Ministry of Industry and Trade is against this centralization. It supports Krylov State Research Center in its struggle with USC for the right to supply to off-shore projects. Dmitry Rogozin has opposed this. He believes it is necessary to centralize these aspects within USC with inclusion of Krylov Center into its perimeter. In this regard it should be noted that according to the source in Krylov Center, its head Andrey Dutov has been approved by the Government as a chairman of USC Board of Directors.

    Higher management level in the industry should, in our opinion, be associated with the imperial-patriotic views of Dmitry Rogozin himself and general trends of the state policy focused on reinforcement of the Navy as well as the creation of a shipbuilding base for the coming off-shore projects and development of the Northern Sea Route.

    Revival of state planning?

    In fact, amid geopolitical ambitions of a superpower, Russian Navy is not strong enough to support them. Being inferior to the key geopolitical rivals, Russia has nothing to set against the USA in the situation with Syria – the power of the USA Navy in the Mediterranean is incomparable with the Black Sea fleet of Russia. Even deployment of warships from other fleets is not likely to change considerably the balance of forces. The situation in this region is aggravated for Russia with the necessity to take the Black Sea fleet out of Sevastopol amid Ukraine’s strivings to associate with the EU and consequently with NATO. In this connection, permanent fleet base is being built in Novorossiysk. Besides, Rogozin thinks it is necessary to build ship repair yards there to service the fleet.

    Apart from the quantity lag, technological gap is a much deeper problem. The USA has commenced the construction of new generation ships and backup means based on unmanned and automated technologies providing the American fleet with undeniable advantage against the other states’ fleets not fitted with similar equipment.

    The government seems to believe that the situation with the Navy can be improved with centralized management of shipbuilding companies.

    As for the construction of large capacity civil vessels, there is a technological gap here as well. Former management of USC was going to solve this problem with the attraction of foreign partners to the construction of new shipyards. There was a plan to build Zvezda DSME and Vostok Raffles in the Far East jointly with the DSME (S.Korea) and Raffles (Singapore). However, the crises developments in global shipbuilding prevented these plans from implementation. Instead, all the efforts were targeted at the construction of the above mentioned complex on the basis of Zvezda shipyard.

    The notorious project on the transfer of the Admiralty Shipyards facilities (Saint-Petersburg) to the Kotlin island (Kronshtadt) seems to fall into oblivion as well.  This project was supposed to be implemented with the attraction of foreign partners.

    Meanwhile, Russia needs state-of-the-art, hi-technology vessels, primarily arctic ones. Adequate development of the Northern Sea Route and off-shore fields is impossible without the powerful shipbuilding facilities in this sector.

    Since Russian shipyards specializing in large capacity shipbuilding are owned by the state (via state-owned USC) and the majority of orders are financed by the government or state companies, direct centralized control seems to be logical. The state planning principle is being revived within a separate industry.

    Vitaly Chernov

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