01 November 2011, 20:12 Politics

The Ministry of Defense has solved the problem of government orders

Igor Vorobiev

The Russian Ministry of Defense and the United Shipbuilding Corporation ( USC ) have finally agreed on the price of nuclear submarines under contracts within the framework of the state defense order for 2011, RIA Novosti reports, citing anonymous sources in the Ministry of Industry and Trade of the Russian Federation . According to them, contracts are expected to be signed by the end of this week.
On Tuesday, at a meeting led by Russian Deputy Prime Minister Igor Sechin , “a major compromise was reached,” as a result, it was possible to agree on prices for all remaining unsigned contracts - for the Yasen and Borei nuclear submarines, a source told RIA Novosti.

source An ITAR-TASS explained that the agreements are based on a fundamentally new approach. “When concluding contracts under the State Defense Order, it is envisaged that shipbuilders will choose their own subcontractors and, accordingly, will be independently responsible for the execution of contracts, while previously subcontractors were chosen by the Ministry of Defense ,” the source clarified. Financing the agreement with subcontractors accounts for about 70% of the contract value.

In mid-October, First Deputy Minister of Defense of the Russian Federation Alexander Sukhorukov said that significant disagreements with the United Shipbuilding Corporation remained on the issue of concluding contracts for the construction and repair of nuclear submarines. “When USC representatives present us with documentation reflecting the price formula, we will check and understand that it is justified, and we will immediately sign the contract. “Until now, however,” he complained, “we do not have all the documents on pricing for the construction of nuclear submarines and surface ships from USC.”

In turn, USC President Roman Trotsenko said then that the United Shipbuilding Corporation cannot reduce the price of building new nuclear submarines for the Russian Ministry of Defense. “The Ministry of Defense is not satisfied with the final price for the construction of ships and demands that the contract price be reduced by 30%. We understand his desire, but with all due respect we cannot meet him halfway,” Trotsenko said, Interfax reports. “We have the technical appearance of the ship with the contractors attached to it. The share of our work in the field of orders from the Ministry of Defense is 30-35%. Our overall profitability is 6-7%. If we give in to the Ministry of Defense, then the overall percentage of profitability will be minus 24%,” he explained.

At the same time, on September 1, Defense Minister Anatoly Serdyukov, at a meeting with President Dmitry Medvedev in Stavropol, reported on the conclusion of contracts within the framework of the 2011 state defense order. According to the head of the Ministry of Defense, agreements have been concluded with all defense enterprises, with the exception of the United Shipbuilding Corporation (USC).