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  • 2023 May 16

    Vladimir Gutenev: a state programme focused on engine building development is under discussion

    Given the restrictions caused by sanctions Russian civil shipbuilding faces problems with equipping the fleet under construction with engines and propulsion systems. Vladimir Gutenev, Chairman of RF State Duma Committee on Industry and Trade, tells PortNews about measures being worked out at the level of the executive and legislative authorities of Russia aimed at the development of domestic engine building in the interests of the shipbuilding industry.

    – Mr Gutenev, what is the situation with the production of engines for the civil fleet? What can be offered and is offered by the domestic industry?

     There are many manufacturers of marine engines in Russia. First of all, it is Kolomna Plant, which produces medium-speed marine engines: a marine diesel generator of the D42 type – 1,500-1,650 kW, the D49 series of a wide power range - from 800 to 4,500 kW, D500 of up to 7,350 kW. Medium-speed engines are also manufactured by Volga Diesel named after Mamin.

    There are enterprises that produce high-speed engines. Zvezda JSC manufactures marine diesel engines and diesel gear units of up to 7,360 kW, diesel engines for high-speed sea and river vessels of various purposes, marine diesel generators of 300-800 kW.

    A line of high-speed engines is also offered by Ural Diesel Engine Plant. It is a new family of diesel engines, DM-185, with power ranging between 750 and 4,500 kW, marine diesel generators ADG-630, 1,000, 1,600 kW.

    However, unfortunately Russia does not currently produce heavy marine low-speed engines with a capacity of over 7,500-8,000 kW required for large-capacity vessels.

    “Russia does not produce heavy marine low-speed engines with a capacity of over 7,500-8,000 kW”

    Was it low-speed powerful engines that were mainly imported or are there problems with less powerful marine engines?

     Unfortunately, not only powerful ones. It has been an established practice to build civil ships of foreign designs which normally foresee the installation of foreign equipment including engines. Therefore, until recently, the main suppliers of engines and diesel generators were companies from the USA, Japan, Germany, Finland, and Sweden. Now all these countries seem to be not just unfriendly, but hostile.

    So, the development of many segments by domestic companies was for a long time not encouraged amid the limited demand. It should also be recognized that we do not have a decent production base for all items. In particular, Russia does not have enough facilities for casting ductile iron needed for production of diesel engines.

    Besides, there are problems with the production of high-quality packages of crankshafts in the segment of diesel engines. There are issues related to modern fuel equipment for the production of diesel engines and pipe compressors for the production of engines.

    There are problems, of course. The federal authorities are aware of the needs in the shipbuilding and ship repair industries. Underway is the development of a package of measures aimed at solving those problems.

    – What is the focus of this work? 

     We believe that the way out of this situation would be a requirement that state customers of all civil ships oblige designers to use domestically produced propulsion equipment for main and auxiliary power plants. This approach should be applied in both the existing projects and in future ship designs. This will stimulate the demand and promote the development of domestic ship engine building.

    – But it is rather an administrative lever. There should also be financial and economic incentives...

     Of course, there should be a package of measures. After all, it is necessary not only to improve the existing line of engines and equipment, but also to develop new ones, creating conditions for the production of large series. Thus, initial focus should be not only on the needs of the domestic market, but also on the world market. It should be a competitive product, which is very difficult to ensure when launching a new engine that has not yet reached its design production capacity. Without state support, it is a difficult task.

    At a recent meeting on preparations for the State Council on Industry, Denis Manturov, head of the Ministry of Industry and Trade, gave an illustrative example. Suppose our engine, relatively speaking, costs 40 million at the start of mass production and, for example, a Chinese engine costs 32, and a German one costs 36. Obviously, if not five but ten engines are produced per year, the price will be different, 20 million, and the costs, will be less, accordingly.

    Therefore, it is important to ensure serial production of engines rather than manufacture single engines of small batches of them. So, it is necessary to create conditions for the growth of demand.

    – Who should be supported in this case?

    - It is extremely important to understand what mechanism of privileges should be formed and for whom: a buyer or a manufacturer. For example, in the industry of agricultural machinery, the customer support mechanism proved to be effective with 15-20% of the costs covered for those buying domestic agricultural machinery. In a very short period of time, the share of domestic equipment purchases increased from 19-21% to 62%.

    Perhaps, privileges and subsidies provided to manufacturers will work in engine building. It is an open question so far.

    The only thing is evident: without a serious state support, without a dedicated state programme, it is hard to count on the breakthrough which we need to solve the tasks set by the president and by the time.

     – What programme do you mean?

    The launching of a decicated programme “Development of engine building” with a financing from the federal budget is under discussion.

    “Russian authorities are looking into launching of a decicated programme “Development of engine building” with a financing from the federal budget

    It is to be considered and probably foreseen at this phase of the budget adjustment so that some additional subsidies could be provided to the domestic shipbuilding companies.

    Besides, it is important to create a stable and predictable demand for the products of engine manufacturers. The managers should see when and what number of engines will be required.

    It is also necessary to solve a problem of local production of components for engine manufacturer. Despite certain success in localization, the industry of machine building still depends on supplies of foreign components such as crankshafts, fuel equipment, components of connecting rod and piston group, cylinder blocks etc.

    – What is the scope of resources foreseen to support local production of components?

     The programme of the Ministry of Industry and Trade for 2022-2025 foresees the allocation of about RUB 110 billion. This programme will be implemented involving the mechanism of Industry Development Fund (IDF). In April, State Duma Committee on Industry and Trade and the Ministry of Industry and Trade discussed the ways to increase the financing of this area.

    Under discussion is the increase of IDF by additional RUB 100 billion. As a source of financing, it is proposed to transfer to the IDF 10-15% of the amount from the sale of assets of the departed foreign businesses.

    –  It is important to ensure both the production of engines and their maintenance. Is there work in this direction?

     The creation of a service base is the task of the next level. In our opinion, it is necessary to create a consolidated maintenance service able to ensure prompt repair of high quality for a wide range of manufacturers basing on a unified system of warehouses and repair centers or agreements with foreign repair centers.

    More about Russian shipbuilding is in IAA PortNews’ annual analytical report “Shipbuilding in Russia” >>>>

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    More about the conference >>>>

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Tatiana Vilde