Defense complexes

Experts on the main problems of the Russian military industry

The State Duma Committee on Industry, Construction and High Technologies at a round table discussed the problem of legislative support for structural changes in the defense industry complex and the development of defense industries. Deputies of both chambers of the Russian parliament, representatives of federal executive authorities, the government apparatus, the Military-Industrial Commission, the Chamber of Commerce and Industry and the Accounts Chamber, heads of defense holdings and other organizations of the defense-industrial complex were invited for the discussion. Today we give the floor to some of them.

“Without producing civilian products, defense industry organizations will continue to sit on the needle of state defense orders”

Martin SHAKKUM, Chairman of the State Duma Committee on Industry, Construction and High Technologies:

- Russia has all types of modern weapons, which are not inferior - so far - to their world counterparts. However, many problems have accumulated in its production. It is necessary to technically re-equip enterprises of the military-industrial complex (depreciation of fixed assets - 70%), preserve and develop critical technologies, some of which have been lost, the problem of bankruptcy of defense industry organizations requires solving, preservation and qualitative improvement of human resources (average age of workers 50-55 years ). The share of defense industry products under state defense orders does not exceed 20%. The number of unprofitable organizations in the defense complex has reached a level dangerous for national security. The volume of weapons and military equipment (WME) in monetary terms often increases not due to the quantity or new quality of goods, but due to changes in price. Prices for some types of weapons and military equipment have tripled or quadrupled in three years.

Defense industry organizations must become receptive to market conditions; professional managers are needed; the structure of production needs to be qualitatively changed, leaving competitive and market-demanded civilian and dual-use products as the basis. It is necessary to create conditions under which it is profitable to produce civilian products. Otherwise, defense industry organizations will continue to sit on the needle of state defense orders. And here we cannot do without private capital investment.

Defense industry enterprises need to be transformed into market-oriented and business-oriented enterprises. Large holdings with the necessary working capital and scientific and technological potential are capable of implementing such a policy. Such holdings will become investment attractive for the business community if the process of restructuring excess capacity is completed, assets are capitalized, scientific and technological potential is concentrated in priority areas, and the share of intellectual added value in the price of products is increased

Attempts to implement all this have been made more than once, but all of them were unsuccessful. For example, the federal target program for the reform and development of the military-industrial complex for 2002-2006 provided for the creation of over 50 integrated structures and 20 federal government enterprises. These latter have been created, but the plan for holdings has been seriously underfulfilled. In 2005-2006 they planned to create 21 integrated structures; only five were created.

"The share of foreign component base is off the charts"

Yuri KOPTEV, director of the department of the military-industrial complex of the Ministry of Industry and Energy:

-- In accordance with the program for the development of the military-industrial complex, a decision was made to create and subsequently expand large integrated structures that would unite more than 180 of the most important enterprises and organizations of the defense industry. However, the logic of creating such structures has fundamentally changed, and instead of vertically integrated structures in the main industries, horizontally integrated structures are now being created - for final products. In the last year and a half, a number of programs have been developed: on the national technological base, industrial disposal, destruction of chemical weapons stockpiles, the development of civil aviation equipment, the GLONASS global navigation system, a comprehensive federal space program and a program for the development of Russian cosmodromes, and a strategy for the development of the aviation industry have been approved.

However, their status as interdepartmental documents has not been determined, although each program is a set of activities aimed at supporting both civilian and military projects. One of the main ones is the promising fifth-generation aviation complex. It is also expected that in March a decision will be made on a program for the initial production of 150-180 civil aircraft by 2012. The United Aircraft Corporation (UAC) held consultations with 18 Russian carrier airlines, and as a result, the need for 160 aircraft of various brands was confirmed. In particular, the serial production program for the Tu-334 aircraft has been rehabilitated. Last year, the aviation industry demonstrated the highest rates of development, with an increase of 127.3% - more than any branch of the military-industrial complex.

The shipbuilding industry, taking into account foreign military contracts, also demonstrated very high rates of development. But last year this industry produced only 84% of the previous year. Today, the shipbuilding industry has only 5.8% of domestic orders from what our ship carriers place, mainly outside Russia.

The dynamically developing aviation and space industries rely on serious financial support from the state, which amounts to many hundreds of billions of rubles within the framework of federal targeted programs and individual events. Until recently, the shipbuilding industry did not have such support and was limited only to participation in the implementation of the program for the development of the military-industrial complex. At a meeting of the State Council Presidium in February, First Deputy Prime Minister Sergei Ivanov proposed subsidizing shipbuilding - as is done all over the world. In mid-March, a decision was made to create a united shipbuilding corporation, but it will take at least a year to evaluate the assets of the enterprises included in the holding.

However, the basis of the entire defense-industrial complex is the electronics industry. It is no secret that today, both in civilian products and in products of state defense orders, the share of foreign component base is off the charts - more than 60-70%. Within the framework of the “Development of the National Technological Base” program, a subprogram for the development of the domestic electronic component base is being implemented. By order of the President of the country and the decision of the Security Council, this subprogram is being transformed into an independent program, focused on the period until 2015 and covering not only microelectronics, but also radio and instrument making.

Work is underway on a strategy for the development and reform of the ammunition industry in special chemicals. The basis is the creation of state-owned enterprises. This will significantly improve the situation in the industry. In 2007, according to the plan, 22-23 state-owned enterprises will be created - mainly the most critical powder and ammunition ones. It is there that there are very large fixed production assets that are not yet used, but which have to be maintained. The Military-Industrial Commission approved these actions, and the defense industry will submit the final version of the document to the government by this summer.

In the general weapons industry, proposals are also being developed to create integrated structures. Partially, these proposals were submitted for consideration to an interdepartmental government commission headed by the head of the Ministry of Industry and Energy Viktor Khristenko.

The government has reviewed a package of documents on the draft federal law “On the procedure for making foreign investments in commercial organizations of strategic importance for national security in the Russian Federation.” This can significantly accelerate the development of the defense industry. The government has already taken a number of measures to prevent the bankruptcy of defense enterprises. A special commission was created, which showed at the first steps that it could significantly stabilize the situation. The Ministry of Energy, in accordance with the instructions of the government, has developed a procedure for determining the composition of costs, which will make it possible to formulate unified approaches to determining the cost of defense industry products.

The Military-Industrial Commission demanded a review of the schedule for legislation in the defense industry. A draft document of 30 points has already been prepared; it covers almost all areas of enterprise activity, including tax, land legislation, and issues of placing a defense order. It is likely that several more bills will be developed in the near future.

“Microelectronic production in Russia ended up in private hands”

Yuri BORISOV, head of the department of radio-electronic industry and control systems of the Federal Agency for Industry:

-- The global radio-electronic complex in monetary terms is 4.4 times larger than all oil and petroleum products. In Russia, these proportions are not yet observed. Among the final products of our defense industry in the field of electronics, we can name only a few air defense and control systems. Today, the radio-electronic complex of Russia unites 366 enterprises (although there are more than 600 of them in the register of the military-industrial complex), over 300 thousand workers, of which 100 thousand are scientific. The volume of production for 2006 was 112 billion rubles.

In the military field, we produce over 20 thousand different products: microelectronic, microwave technology (vacuum, solid-state and semiconductor devices), passive components, power electronics, and so on. By the beginning of the 90s, Russia's lag in technology was approximately one or two orders of magnitude: if world electronics operated at the level of 0.5 microns, then Russian ones operated at the level of 1.0 microns. By 2004, this gap was already three to four orders of magnitude. The time lag is 5-6 and 15-20 years, respectively. There is a regression. By 2005, the elemental component base on the Russian market had developed in the following proportion: 65% - imports, 35% - domestic products. And in microelectronics this balance was 10 to 90. We are talking about the technological and information security of Russia, whose electronics industry is in a deep structural and technological crisis.

Starting in April last year, the President, the Military-Industrial Commission, and the government were presented with a strategy for the development of the electronics industry in Russia and specific program measures related to the resuscitation of the industry. The main thing in this strategy is to gain a position in new markets, to win back from Western producers the share that Russia has practically lost. The electronic components market (ECB) is projected to triple by 2011 and amount to over $3 billion, and new niches are emerging in it. At the same time, the market for special, that is, military, electronics will narrow to approximately 25-30% and will not, as before, play a key role and will not ensure the utilization of radio-electronic complex enterprises.

But interesting segments are emerging in the civilian market. First of all, these are radio frequency and modification tools. In more understandable language - electronic passports, electronic tags, electronic documents. In addition, Russia is switching to a digital broadcast format - DVD. By 2015, this segment of the Russian market is estimated at $25 billion. Of these, only five are professional equipment: a network of receiving and transmitting centers throughout the country. The remaining 20 billion is the consumer market.

Another segment of the electronics market is the global satellite navigation system (GLONASS). Its value for manufacturers lies in the quantity and cost of navigation equipment sold, with the help of which the consumer can determine his location on the ground. This market segment is projected to reach 700 thousand devices by 2011.

In the industry development strategy, priority directions have been chosen based on ensuring the information and technological security of the country. Among the priorities are microwave technology. It cannot be purchased on the open market, since this technology determines the characteristics of military systems - location stations, air defense systems, aviation (more than half of a fifth-generation fighter consists of avionics). A new direction is microsystems engineering. Russia is known to be a space and nuclear power. And it is in these areas that a special element base is required. We have a real chance to play in this segment, especially since the technological standards here are not ultra-modern - at the level of 0.35 microns.

The main assets of microelectronic production in Russia are in private hands, so the principle of public-private partnership looks very relevant. Considering the national projects currently underway and the role of electronics in them, it would be necessary to build more than one or two electronic factories in Russia. And a modern electronics factory starts from at least 1-3 billion rubles. Such production becomes profitable when it is mass produced. Another new direction is nanotechnology. It is also planned to create a network of design centers. It is in them that intellectual property and design documentation for future products are formed.

The radio electronics industry showed 115% growth in 2006 versus 108% in 2005 and lagged behind only the aviation industry. But in order to ensure balanced development of other industries, the rate of radio electronics as a base for the rest should be 20-25%. In 2007, having introduced medium-scale microelectronic production, we will immediately overcome several stages of the backlog. Having brought the technological level to 0.09 microns in 2008-2009, we will no longer be at the tail end of world electronics. But we need zero rates of VAT and customs duties on technological equipment not produced in Russia. Otherwise, the payback on our projects will increase by an average of a year.

“After integration comes monopolization”

Nikolay PERVUSHIN, employee of the directorate of the chief of armaments of the Russian Ministry of Defense:

-- The Office of the Chief of Armaments of the Russian Ministry of Defense, as a customer of military products, is concerned about increasing the mobilization readiness of industry. The first problem here is monopolization, which unwittingly follows the integration process. In a number of cases, monopolists, by unreasonably raising prices, actually disrupt the contractual campaign. Although the current legislation allows one to get out of this situation, the procedures are very time-consuming and quite confusing.

We are for long-term, 3-4 year government contracts. Article 72 of the Budget Code prevents the placement of state defense orders on the basis of long-term contracts. The restrictions it contains allow such contracts to be concluded only for products with a technological production cycle of more than one year. It is planned to make changes to this article, but as it turned out, with an increase in this period. If this is so, then all the customer’s plans may remain good wishes.

“Today there are no non-problematic contracts”

Alexander BRINDIKOV, head of the group of advisers to the general director of FSUE Rosoboronexport, president of the League for Assistance to Defense Enterprises:

- Defense industry enterprises are no longer able to fulfill the number of orders offered by customers - law enforcement agencies. The situation with the quality of products produced by the defense industry is also threatening. Today, in fact, there are no non-problematic quality contracts. Moreover, production deadlines for certain products are not met. The domestic industry cannot meet the requirements set by the customer. The technological re-equipment of domestic industry is long overdue. A dangerous trend has already emerged - the participation of Western suppliers of components and element base.

Today there is a restriction on the stay of products in the customs territory - two years. And a number of repair and construction works in the interests of foreign customers (mainly in the shipbuilding industry) exceed these deadlines. As a result, problems will begin in the work on the aircraft-carrying cruiser Admiral Gorshkov sold to India this summer. The draft law, which allows staying in the customs territory for more than two years, passed the first reading in the Duma and was sent to the government for approval of some positions, and again there was a delay.

An analysis of the current state of the defense industry shows: in order to have a competitive industry, Russia has 3-4 years.

“Nobody knows what two thousand scientific institutions are doing”

Evgeniy KABLOV, General Director of FSUE VIAM:

- The situation of science, which is engaged in research related to the dual use of military and special equipment, is very difficult. There is no clear definition of what the public sector of science is, its composition, structure and principles of state support. And what is corporate science? Although the government has approved the development strategy of science and innovation. It is believed that, for example, FSUPs a priori belong to the state sector of science. But this is wrong. The institution should be attributed to the state sector based on the functions that the state gives a particular scientific organization. There are more than 2 thousand of them in Russia now and no one knows exactly what each of them does. Although the president instructed to conduct an inventory of scientific organizations and approve their state register, this was not done. Now in the Duma amendments to the Federal Law "On Science and Scientific and Technical Policy" are being prepared. The Association of State Scientific Centers has prepared an appropriate proposal.

In December 2006, the President instructed the Government to prepare proposals to create large national research centers, which should be all responsible for the development and research in the priority areas of science and technology. But attempts are already being made to replace these centers with corporate science, excluding completely a public sector. However, the business will never invest in long -term and promising research. Therefore, studies that determine the defense capacity and development of military equipment should be funded through the public science sector.

The key issue in the development of the military-industrial complex is the training and consolidation of highly qualified scientific personnel, specialists of the highest and middle level. The state released him from control. In the USSR, in each Union Ministry there was a personnel training department. After all, technological re -equipment of the enterprise is possible if specialists are able to perceive new equipment and technologies. Professional technical education was transferred to the subjects of the Federation, and these educational institutions began to train lawyers, economists, accountants ... Professional and technical schools should be returned to their previous profile.

It is necessary to adopt the law "On the targeted contract training of personnel for the military-industrial complex." The university and the OPC enterprise conclude an agreement: the student after graduation will work at this enterprise for 4-5 years. The company additionally pays the university for adjusting the curriculum, increasing the volume of teaching under a special program, and the student receives an additional scholarship. A young specialist participates in a preferential mortgage. A similar system is now being introduced by the Ministry of Defense.

The defensemen are more persistent against the two -level education system (bachelor and master). For an engineering training system, this is a fatal path. It is necessary to maintain a single -level system for training engineering personnel up to five years. It is necessary to maintain the Soviet engineering training system for defense enterprises.

"All programs for reforming shipbuilding ended in complete fiasco"

Mikhail Kheifitz, General Director of OJSC "Concern of Medium and Lesser Shipbuilding":

- Shipbuilding has been reformed since 1993. The current program is the fifth. All the others ended in complete fiasco. New economic conditions today are formed mainly not for enterprises of the shipbuilding industry, but for carriers, shipowners and large companies that may be potential customers. The proof is the composition of the taxes of the shipyard. These are 26 direct taxes of federal and municipal significance, 12 federal taxes, ten more taxes have a double purpose, part goes to the federal budget, part to the municipal budgets, the remaining taxes are indirect, which local authorities want to come up with, they want to cancel. Plus land tax.

All of them lie down overwhelming a burden on the shoulders of shipbuilding. In order to facilitate this burden, it is necessary to reduce VAT and customs duty on the imported equipment - otherwise they are transferred to the price of the order. All these are the means that could be renovated and re -equipped with fixed assets, the modernization of production. And the state would not even notice the lack of land tax, because the enterprise would indirectly return it - an increase in production, employment, social issues, direct taxes.

Our concern produces platforms, chimovya tankers, tugboat-rescuers, unique seismic exploration vessels, a whole range of supplies and auxiliary vessels. But not a single ship, not a single ship is built on the Russian project, according to the Russian documentation, and on any of these ships there is no Russian bolt, pump or any equipment. The conditions of tenders and competitions are arranged so that Russian enterprises and designers are powerless. Civil shipbuilding dies. Having lost civilian shipbuilding, Russia will lose military shipbuilding.

Over the past nine years, $ 27 billion has been spent on the development of the shelf. The return could be more. Often the numbers that are presented for reports are false. For example, a Russian company receives a contract of several tens of million dollars. And the company is two chairs and a table. She takes the largest Western company by the counterparty, and all the money goes there, and according to the report, that the Russian resident won. Such is Russian participation.

"Russia cannot compete with all components with the whole world"

Givi Dzhandzhgava, president of Avionic Concern OJSC:

- We have an industrial mentality, and it is necessary to build an industrial industry- to invest in an innovative process, new technologies, and new types of production. It is advisable to reduce existing programs for state defense orders, military-technical cooperation and civilian products into a single coordinated program. This will create a harmonious cooperative scheme of interactions of enterprises, specialize the production of unified products, reduce its costs, reduce the nomenclature of products, optimize resources, including finances.

It is clear that Russia will not be able to compete for all components with the whole world. Something less significant must be purchased abroad. In some reasonable cases, it should be allowed to purchase (with preferential tax and customs tariffs) components of the Air Forces created on technologies that are not supported by the state. Or magnetic memory carriers: 2-3 countries of Southeast Asia provide them with the whole world.

Today the inflation coefficient for VVT is 1.06. It is far from reality, even on average, and such a high -tech area as the OPC has at least five processing levels. This average indicator has nothing to do with high technologies.

Enterprises loaded with more than 50% of military products, regardless of the form of ownership, must be exempted from the call of their employees to the armed forces. It is necessary to develop a normative act on the inclusion in the price of depreciation products for maintaining the staff, its training, attracting and consolidating specialists. Today, depreciation includes only the deductions necessary for the restoration of production. That is, the machines are aging, but the frames do not get old?

"We need the law" On integrated structures "

Maxim Petrov, Director of the Law Department of JSC United Aircraft Building Company:

- The concept of "integrated structure" today is not defined normatively. Unless only in the methodological recommendations for the creation of integrated structures in defense industries. At the same time, in the process of creating an aircraft manufacturing corporation, we were faced with the need for a more clear legislative definition of this term-when using it in tax legislation, in the legislation on military-technical cooperation, and state defense order. Perhaps all this should be prescribed in the special Federal Law "On Integrated structures".

The exemption from VAT of operations performed on a state defense order is good tax stimulation. The lifting of the restriction of shares in the field of military-technical cooperation among foreign participants may also be stimulating. Now the law "On the implementation of foreign investment" is being prepared. Perhaps these mechanisms should be transferred to special regulatory acts. The permission in the law "On the State Defense Order" could also be effective to finance execution at the expense of the company's own funds with subsequent compensation at the expense of the federal budget.

"It will soon be impossible to buy a single machine in the Russian Federation"

Sergey Chukukukkinov, Deputy General Director of NPO Saturn:

- Vertically integrated structures are needed by the state only as a tool for consolidating companies for a specific task for the current period. Today we must already talk about some adaptive forms of industrial organizations, about the global integration of all industry processes. Without this, Russia will again remain a backward country. In the radio industry, the volume of taxes is only 15 billion rubles. There are 500 enterprises in total, of which the “living” 10-15. Well, what is this industry? In mechanical engineering, 15 enterprises, of which only 5-6 produce machines. In these machines, as in shipbuilding, radio industry, 60% of components from the west. What production of machines in Russia can we talk about? Well, let's recognize this truth and stop inserting the phrase "Equipment that is not produced in the Russian Federation." In the territory of the Russian Federation, it will soon be impossible to buy a single machine. And the CNC machine with a distribution control system always has a control system made in the West.

Any equipment that is imported to Russia should be freed from all customs duties. Any enterprise that invests its own profit in the modernization of production should be exempted from income taxes. Any enterprise that starts at least some modernization at its factory to enter the market, internal or external, is exempted from taxes. The budget will not suffer from this.

Federal target programs are yesterday. You need to finance other mechanisms. The only locomotive of innovative development in the country can only be a military-industrial complex-there is no other product in the country that would be sold to 61 countries. Therefore, it is not necessary to develop shipbuilding, aviation, engineering-we need a comprehensive program, the country's industrial development strategy for 10-15 years. And the State Duma should create relevant laws for this. A simple example: in order to take out Russian energy equipment to Vietnam, you need to pay so much money to the budget that export becomes disadvantageous. Our aircraft builders fight for the same market among themselves. The same is in shipbuilding. Let the law prohibiting the competition of manufacturers in foreign markets come out.

The page was prepared by Nikolai Prochov