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2016 February 10

Maxim Kochetkov: “Sanctions have not considerably affected the level of technical infrastructure at Russian shipyards”

Maxim Kochetkov, Director of Shipbuilding Industry and Marine Facilities Department at RF Ministry of Industry and Trade, tells IAA PortNews about state measures to support shipbuilding and import substitution in Russia. 

- Mr. Kochetkov, what is your opinion about the competitiveness and technological infrastructure of Russian shipyards focused on civil shipbuilding today, more than a year after introduction of international sanctions?

- When speaking about technological infrastructure of civil shipyards one should remember that most of our shipyards have historically been focusing on naval ships and continue participating in implementation of state defence orders. Therefore, the last decade has seen modernization of the majority of shipyards supported by the state.

We monitor the situation within the current investment projects. The key challenge today, a year after, is the exchange rate fluctuations resulting in revising of the projects’ cost parameters. As for supplies of technological equipment from the countries that had imposed sanctions on Russia, we see slight delays in implementation of the projects and finally select alternative suppliers.

So, it is too early to speak about any significant impact on the level of technological infrastructure at our shipyards. Meanwhile, the sanctions have given an impetus to the search of diversified canals for supplies of equipment and determination of the crucial equipment which should be manufactured in Russia to escape further technological blackmail. Therefore, the programme on import substitution in shipbuilding industry (approved by the Ministry of Industry and Trade on March 31, 2015, Decree No 661), like in other industries, contain a special section dedicated to the development of technologies. For instance, the programme provides for the development of technologies for automated pipe cutting lines, manufacture of equipment for thermal cutting of flat rolled stock and T-bar production lines, production of single welding stations and other technological equipment.

- How many vessels were built in Russia in 2015, which of them would you mark? 

- In 2015, the companies of shipbuilding industry built about 50 average and large capacity vessels. I would not separately mark anyone as almost all vessels are unique in this specific industry. Even within the same project, customers change their payload demands and raise performance requirements. For example, the year of 2015 saw the delivery of 17 MW diesel-electric icebreaker Vladivostok of Project 21900М, the third ship of this project.  2 more icebreakers are to be delivered in 2016. Project 21900М is an improved continuation of Project 21900. Its structure has been changed due to expansion of the tasks imposed on the ship. In particular, the crew has been expanded, there is a possibility to accommodate special personnel, there is a heavy lift crane and the propulsion capacity has been increased to 17.5 MW. So, the Vladivostok is the most powerful diesel-electric icebreaker operating in the Russian Federation today.

- What are the payments arrears under Government Decree No 388 as of the end of 2015? Is there financing foreseen under this Decree for 2016? 

- They are not actually the payments arrears as the mechanism of subsidy provides for selection of applications within the limited budget allocations. The question should be asked about the sufficiency of budget allocations to meet all the applications from the ship owners? We have to admit that this subsidy is getting more and more popular and we could cover only half of the applications in 2015. Therefore, despite the challenging economic situation in the country, financing of this subsidy will be increased in 2016 (Federal Law No 359-FL On Federal Budget 2016, dated December 14, 2015): loan subsidies – RUB 704,348,000; leasing subsidies – RUB 1.056 bln.

- When will the programme on Ship Utilization Grant start working? Has the legal framework been developed for its implementation? 

- The new mechanism to support ship owners through ship utilization grants is to be launched from 2017. For this purpose, state programme “Development of Shipbuilding and Equipment for Offshore Fields in 2013-2030” provides for allocation of RUB 11.7 bln through 2030. Its future will depend on the mechanism efficiency in 2017 (RUB 400 mln).

We are currently elaborating detailed rules and required legislative framework together with transport companies.

- We know that state financing of a project for river-going passenger ship in 2016 is under consideration today. When is it likely to be approved and what mechanism is expected?

- You are right, throughout the year of 2015 we were developing measures to support passenger fleet, and cruise ships in particular. In fact, Russia has never built ships of this class before. By today, a cruise ship project has been developed and supported by ship owners. Project PV 300 initiated by Moscow River Shipping Company OJSC was developed by Marine Engineering Bureau specially for Russia’s river system: the ship is intended for operation at inland water ways of Russia with a possibility to enter the Black Sea, Azov Sea and Caspian Sea.

As a support measure we have foreseen a targeted subsidy of USC for implementation of special leasing programmes. We are currently busy with elaborating the rules for selection of leasing programme participants under the following principles: parallel application of a utilization grant (up to 10% of the new build cost); final rate for a ship owner should be set at 8–10%; extension of leasing programmes to 15 years and more; ability to use financial or operational leasing.

Interviewed by Nadezhda Malysheva.