Russia is mature enough to purchase armor abroad

14.10.2010 — Analysis

The only tank manufacturer in Russia, SPC Uralvagonzavod OJSC may lack orders in 2011. Professionals say that even one year downtime will result in loss of technologies and staff. Experts say that due to degradation of the military industrial complex, Russia will have to purchase armor abroad. According to a RusBusinessNews observer, this way defense companies will have to pay for their former whitewashing and today's failure to promote their products under conditions of sever competition.

Management of SPC Uralvagonzavod OJSC that manufactures T-72 and T-90 tanks notified the trade union of the company about serious decrease in volume of military equipment production in 2011. Lack of a State defense order will result in reduction of staff. UVZ Administration is going to repurpose a part of workers of mechanical assembly production for manufacturing civil products. In particular, there is possibility that railway machinery and equipment will be produced in the "tank" shops.

Press Secretary of Uralvagonzavod, Alexey Zharich told RusBusinessNews that in December 2010 expires the three-year contract with the Ministry of Defense under which the Russian Army is supplied with 63 tanks per year. No new orders have come in yet. Since export contracts expire as well, the company management decided they should be ready for a large-scale displacement of tank-manufacturing employees. Managers rest assured that orders for railroad cars will nothing but grow in 2011. As A.Zharich said, economics is coming to life, number of carriers is increasing, and as a result, the plant will not be able to satisfy all requests for the cars. Thus, displaced employees will come in useful in the civilian production. In all appearance, the company does not count on any State defense orders any more.

Expert of the Centre for Analysis of Strategies and Technologies (CAST), Andrey Frolov supposed that after the three-year contract would have had expired, the plant would have started manufacturing a new tank T-95. However, the project was frozen and now UVZ will supposedly be taking care of upgrading the old T-72Bs. Such supposition was confirmed by the Deputy General Director of the Ordnance Factory No.9, Nikolay Kozlov. According to the manager of the company that supplies tank barrels to UVZ, the issue of the State defense order is still not settled, and manufacturers are forced to be focused on tanks renewal and upgrading. However, there were no instructions let alone orders from the Ministry of Defense. So, plants are welcome to upgrade their machines at their own peril and risk.

FSUE Uraltransmash which is a manufacturer of self-propelled artillery vehicles, has got no contracts with military either. As says Director of Marketing and Foreign Economic Activity, Nikolay Bedniakov, formerly contracts were never signed before March either, but back then it was known at least by the end of the year how many items the Ministry of Defense is supposed to order next year. Now it's not clear at all. Figures change every month, and nobody would guarantee that the company will get the order at all since the military have not decided yet which war they will be gearing themselves for.

Meanwhile, Chairman of the Defense Committee of RF State Duma, Victor Zavarzin recently said that expenses for purchasing weapons and military equipment will increase by 25% next year. In 2011, 460 billion rubles will be spent; in 2012 this figure will amount to 596 billion, and in 2013 Russia will spend 980 billion rubles for that purpose. Research and development work will be financed separately. Share of expenses for that sector in the military budget of Russia will slightly reduce, but the absolute figure will still increase from 107 billion rubles this year to 115 billion in 2011.

Growth of expenses for weapons and military equipment is due to the decision of the state authorities to increase the share of expenses for purchasing new weapons in the total defense budget up to 70% in 2013. Such goal resulted in the Ministry of Defense closing a range of dead-end research and using the released funds to do a follow-up revision of the ballistic missile Bulava, make missile launching vehicles Angara and Rus', new satellites, fighter T-50 and some other projects.

All armor fell under dead-end category since manufacturers of tanks and self-propelled vehicles could offer nothing new. Nikolay Bedniakov says that new projects appearance is related directly to financing. Nowadays they are both gone, due to which Uraltransmash has been upgrading the same single item over the past years. Machinery may be renewed and upgraded if the share of expenses for R&D is not less than 10% of the amount of the State order. And that, as the manager claims, has never happened during the post-soviet years. And nobody knows what is going to happen with research work in 2011.

Experts think that in many respects it is manufacturers' fault that this situation exists. Doctor of Science Mikhail Rastopshin published in the mass media a range of articles where he showed that engineers of Soviet tanks deluded the government by actually falsifying the test results. Namely, manufacturers claimed that the vulnerable range of a T-72 armor (on the basis of which T-90 later on was created) is more than 1,500 meters. However, as the Expert says, even back in 1983 range practice showed that an Israeli tank M48A5 drills a hole in a tank's front armor with a 105 mm shell from the distance of 2,000 meters. Ural engineers were able to persuade everybody in the alleged vulnerable range only because during acceptance trials for T-72, a shell was used that was not similar to the foreign armor-piercers.

Tricks used in Soviet time, fail today. The Ministry of Defense avows that T-90 is an old tank and it is useless to even try to upgrade it. However years of work in the Soviet economy prevent SPC Uralvagonzavod OJSC from promoting advanced technologies. In particular, there was no call from the military for a Tank Support Fighting Vehicle (BMPT) created in competitive market environment. In opinion of the Head of Analytical Department of the Institute of Political and Military Analysis, Alexander Khramchikhin, UVZ managers could not have lobbied this rather promising product through the ministerial chairs. It is obvious that all new machines make the military ponder on where and how they will use it. The plant management could not explain what purposes the new product was created for.

The lack of the State order for tanks is not going to ruin Uralvagonzavod, but there will be serious consequences. Qualified personnel will leave, and the equipment will come out of order. As A. Khramchikhin thinks, everything points to the fact that Russia will purchase armor abroad. And this will happen whether the Russian authorities agree to do that or not. In addition, Russia will soon lose its warships as well. Only aviation equipment will stay national because in this sector, R&D money was spent in a worthwhile manner which preset a high lobbying potential of the air companies' management. It was already announced that by 2015, 70 T-50 fighters and about 400 new and renewed combat assault transport helicopters would be purchased. The military will also purchase Il-112, Il-476, Il-76M and An-70 aircrafts.

Executive Director of the Union of Enterprises of Defense Sectors of Industry of the Sverdlovsk region Vladimir Kukarskikh thinks it will be possible to discuss specific orders only after government arms program for 2011-2020 will be approved. But even now it is clear that the bid is placed on space, rocket and aviation equipment.

Such a decision, as experts think, totally does not mean manufacturing tanks will be completely stopped since armors are always required for close-up action. Lack of a State order and of "tank" prospects is a failure of managers and specialists of SPC Uralvagonzavod OJSC who were not able to work in the circumstances of severe competition at the arms market.

Vladimir Terletsky