Russian Government is changing rules for awarding state defence contracts. The funding of some enterprises of the sector is increased while the funding of the others has been cut down by almost a half. The Defence Ministry is insisting on the reduction of purchase prices for arms. Industrialists blame the customer in the breakdown of the research and development work. The disagreements between the parties cannot be overcome entirely within the military industrial complex of Russia, as the RusBusinessNews observer has established.
The Union of Defence Industry Enterprises of the Sverdlovsk Oblast discussed the prospects of the arms production in 2010. Vitaliy Smirnov, the Director General of the Union, said that the state defence contract has not been formed yet. The only information available is that in absolute figures it will be smaller than in the last year since the Defence Ministry by a directive is reducing products prices by 15%. Also a redistribution of resources has occurred, in 10 out of 40 key enterprises the orders increased by 30% and in 11 - reduced by 40%. What was sequestered more than anything else were the budgets of enterprises making munitions.
The state contract for the only tank factory in Russia, OAO NPK Uralvagonzavod (Ural Railway Car Plant) has not been finalised yet, contrary to the statement made by Aleksandr Postnikov, the Supreme Commander of the Ground Forces, regarding the purchase of 261 tanks by the Russian Army. Industrialists have not confirmed this figure having said that so far the old contract with the Defence Ministry on purchasing 63 tanks annually is in force. When the new contract is going to be signed is unknown as Uralvagonzavod is not happy with the price for the goods offered by the military. Vitaliy Smirnov assumes that the contract will either remain as it was last year or be increased due to political reasons, that is for the sake of preserving the manufacturing facilities.
By: Brant
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