Russian Nuclear Submarine Contracts ‘Underpriced’

Borey-class ballistic missile submarine Yury Dolgoruky

MOSCOW, June 7 (RIA Novosti) – Former Russian Defense Ministry officials forced shipbuilders to underprice nuclear submarine contracts, which nearly scuttled the 2011 State Defense Order, a senior Russian official said Friday.

Deputy Prime Minister Dmitry Rogozin, who oversees the defense industry, said the contracts were for Borey- and Yasen-class ballistic missile submarines, and the underpricing almost scuttled the order, which was eventually signed under former Defense Minister Anatoly Serdyukov.

Serdyukov, who had held the post of Defense Minister since 2007, was sacked in November and replaced by Sergei Shoigu amid a series of ongoing corruption scandals that have rocked Russia’s defense sector.

Defense Ministry officials had claimed that the shipbuilders’ contract prices were too high, which led to a protracted wrangling over prices. In 2011, the contracts were only signed in November, in the presence of then-Prime Minister Vladimir Putin.

Whereas the original price of the Yury Dolgoruky submarine was more than 20 billion rubles (about $70 million), it subsequently increased to 50 billion.

Rogozin said the work on the new submarines was currently going according to schedule but the underpriced contracts were resulting in additional costs. “We are thinking of how to tackle that problem,” he said.

Rogozin said in late May that Defense Ministry contracts signed under Serdyukov were to be thoroughly examined and, if necessary, audited. Those contracts were “largely detrimental,” he said, adding that the Russian government was ready to step in to sort out the crisis in Russian naval shipbuilding that is threatening to derail the defense procurement program.

He made his comments on the same day it was revealed that the state-run United Shipbuilding Corporation (USC) was looking for money allocated to complete the Nerpa nuclear submarine for India’s navy. A total of 500 million rubles ($15.9 million) went unaccounted for, the Kommersant business daily reported.

USC’s previous board of directors “bears full responsibility for nodding their heads, signing unworkable documents and concluding contracts at prices that were obviously below market levels,” Rogozin said at the time.

President Putin has been briefed on the issue, and the implementation of the arms procurement program will be discussed in late July, Rogozin said. Putin ordered USC’s management to submit a report by October 15 on measures to improve the situation in the industry.

Doubts about the ability of the industry to deliver warships on time and within budget prompted Serdyukov to order Mistral-class amphibious assault ships from France in 2011. That deal has subsequently been criticized by Rogozin and other senior defense industry officials.

The Russian Navy is expected to receive 24 submarines and 54 surface warships of various classes by 2020, according to the Defense Ministry.

Putin said last year that the procurement of new warships and submarines for the Navy would be a priority over the next decade. The Russian government has allocated 5 trillion rubles ($166 billion), or a quarter of the entire armament procurement budget through 2020, for this purpose.

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Russia Tests ‘Missile Defense Killer’

Kapustin Yar testing site (archive)

MOSCOW, June 7 (RIA Novosti) – The US missile defense system is no match for the new intercontinental ballistic missile (ICBM) that Russia tested this week, a senior Russian official said Friday.

Deputy Prime Minister Dmitry Rogozin, who oversees the defense industry, hailed Thursday’s tests as a success and dubbed the new ICBM a “missile defense killer.”

“Neither current nor future American missile defense systems will be able to prevent that missile from hitting a target dead on,” he said, during an event organized by the ruling United Russia party.

The Russian Defense Ministry was more modest in its appraisal of the test, carried out by the Strategic Missile Forces at the Kapustin Yar testing site, between Volgograd and Astrakhan, on Thursday.

“The test launch was a success as the [simulated] warhead hit a designated target within the set time frame,” said a Defense Ministry statement issued Thursday.

The US missile defense system in Europe, which NATO and the US say is aimed at countering threats from North Korea and Iran, has been a particular source of friction in US-Russian relations for a number of years.

Russia and NATO formally agreed to cooperate over the European missile defense system at the 2010 NATO summit in Lisbon, but talks foundered, in part over Russian demands for legal guarantees that the system would not target its strategic nuclear deterrent.

In mid-March, the US announced that it was modifying its planned missile defense deployment to Poland, dropping plans to station SM-3 IIB interceptors in the country by 2022.

Russian officials responded by saying that this did nothing to allay their concerns over US missile defense in Eastern Europe, and reiterated their demand for legally binding agreements guaranteeing that Russia’s strategic nuclear forces would not be targeted.

Although analysts were quick to interpret the US change in plan as a concession to Russia, possibly intended to pave the way for further bilateral talks on nuclear arms reduction, US officials repeatedly refuted this suggestion.

Speaking after a bilateral meeting with the Polish foreign minister on Monday, US Secretary of State John Kerry stressed the United States’ continued commitment to that element of the missile defense system.

“We are on track to deploy a missile defense site in Poland by 2018 as part of NATO’s modernized approach to our security,” Kerry said.

Russia to Base French-Made Assault Ships in Far East Ports

mistral-class

MOSCOW, April 16 (RIA Novosti) – Russia will base its French-made Mistral-class amphibious assault ships in the Far East ports of Vladivostok and Petropavlovsk-Kamchatsky when they enter service, a senior Defense Ministry official said in an interview.

Russia signed a 1.2-billion euro deal with a French shipyard in 2011 for two Mistral-class ships, the first of which is due for delivery in 2014 and the second in 2015.

“There are several options [for their location], but the choice fell on Vladivostok due to its existing transport infrastructure,” Roman Filimonov, head of the Defense Ministry’s construction department, told RIA Novosti.

“In future, we should create conditions for a short-term base equipped for storage replenishing, loading and unloading troops and crew rest in Petropavlovsk-Kamchatsky,” Filimonov said. Other possible bases for the ships are still being considered, he added. A navy spokesman told RIA Novosti in 2011 one of the ships could be based with Russia’s Northern Fleet.

Filimonov said the necessary infrastructure for the two ships is due to be built in the Primorsky Krai by 2015.

He also noted it is more convenient to dock the ships near major cities to provide housing for the crew and their families. The Mistral-class is capable of carrying 16 helicopters, four landing vessels, 70 armored vehicles, and 450 personnel.

Procurement of the Mistral-class ships has been the subject of considerable controversy within the defense community in Russia. In January this year, Deputy Prime Minister Dmitry Rogozin criticized the decision to buy the ships after it was revealed they needed high-grade fuels and lubricants which were not produced in Russia in order to operate in cold temperatures.