The state defense order: an arms race gets off to a heavy start


MOSCOW. (RIA Novosti military commentator Ilya Kramnik) - The state defense order is the lifeblood of the army. It is approved by the federal budget and it is within its limits that the state pays for all purchases (from food to nuclear ammunition) and all works (from construction of heating mains to development of the latest weapons) for the army.

A balanced order is essential for the fulfillment of delivery plans, but, as the past few years have shown, the defense order remains sometimes unfulfilled in some respects, which is particularly critical amid the continuing world financial crisis.

The causes of such irregularities in recent years have been the sharply increased military equipment prices and the inability of some firms to fulfill their orders on time and with required quality.

Growing prices prompted the Defense Ministry to complain as early as 2007. This resulted in the government resolution on prices for armaments and military equipment, which set the profit rate at 25%. Under the new rules, prices for military products must be registered with the Federal Tariff Service for the entire production cycle, or for a calendar year if the cycle exceeds one year.

Prices for nuclear munitions must be registered with the Federal Nuclear Power Agency, and can be revised only if there are increases in prices for stock materials and components.

Still, weapons and equipment prices continue to grow. The price of a Be-200CS aircraft, for example, purchased for the Emergencies Ministry, has risen from 700-750 million rubles to a billion, a T-90 tank has increased from 42 million rubles to over 60 million, and a Project 20380 ship - the corvette Steregushchy - has gone up in price during its construction from 1.8 billion to 5 billion rubles.

Such ballooning prices can have a serious effect on the 2006-2015 State Armaments Program, which plans to allocate nearly five trillion rubles for the re-equipment of the armed forces with new and upgraded arms. Put together in 2005 and based on the prices valid at that time, the program today cannot keep up with rapidly mounting costs and risks falling back amid the current economic crisis.

An equally serious threat is the increasing deterioration of production facilities at some defense plants, making them in many cases incapable of producing military hardware. A glaring example is last year's scandal involving the modernization of the aircraft carrier Admiral Gorshkov for the Indian Navy. Most experts agree that a shortage of engineers and skilled workers at the shipyard, coupled with rising component prices, caused the fallback. This raises doubts that the yard, which is working on a large submarine building program, can also shoulder an aircraft carrier construction program being pushed on it.

There are many examples of failure to fulfill the state defense order: delivery of Su-34 aircraft and Mi-28N helicopters is well behind schedule, the missile-carrying submarine Yury Dolgoruky is certain not to be launched in 2008, and the second submarine in the series is unlikely to hit the water in 2009, as scheduled, either. At the same time, there is some good news: the timeline for Topol-M deliveries to troops is being scrupulously followed, although it is not known whether it will be kept when another new missile - the RS-24 - starts to be mass-produced.

It is understandable that defense sector plants cannot solve their problems by themselves, as these have taken twenty years to pile up. A way out must be found in the near future, and must involve state support, not only in the form of financial injections and bylaws regulating profit rates. It must above all be a state program for retooling defense plants, providing them with up-to-date equipment and staffing them with highly-trained workforce. And while the first problem can be addressed by imports from abroad, the second one will take years and require an overhauling (actually re-establishing) of a system of vocational training. Aside from other factors, there is also the psychological one - the appeal of a worker's job in the post-Soviet era has substantially diminished in Russia.

Defense order problems are not endemic to Russia alone. The number of programs to make purchases for the US Armed Forces that failed or were terminated because of exorbitant prices defy listing. Among the latest and largest, mention should be made of the winding up of a program to build LCS class warships, a program to build Zumwalt-type destroyers, a program to build the Comanche reconnaissance helicopter and a program to build the ARH-70 reconnaissance helicopter.

The models that have made it to the production stage are also plagued by problems. The U.S. Navy, for example, is dissatisfied with the quality of San Antonio class landing craft, whose tactical fitness is under threat because of a host of defects, while the Marine Corps has refused to adopt for service the newest EFV amphibious vehicles, which have likewise proved to be unreliable and costly.

The resumption of an arms race following a long pause is proving too heavy for both key participants, although is unlikely to "call off the competition."

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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