What’s It Cost?

S-400

A reader recently asked:

What’s the cost of one division of the S-400 for Russia and for foreign customers?

Let’s call it a battalion (дивизион).  We’ll start with exports (for which there is actually data).  And we proceed from what was paid for the S-300.

Russia’s planned sale of the S-300PMU1 to Iran reportedly involved the transfer of five “battalion sets” for $800 million.  Some sources said as much as $1-1.2 billion.   

Let’s guess the “battalion set” has three firing batteries, with two launchers per, for a total of 30 TELs, 120+ missiles, and all associated radars, fire control systems, and vehicles.

If $800 million is accurate, the price for one battalion was $160 million.  The price for one S-400 system, four missiles on a TEL, was roughly $27 million.

This isn’t unlike what the Chinese paid for the S-300 in the 1990s and 2000s.  According to Sinodefence.com, they bought battalions for between $25 and $60 million at different times under different contracts.

That done, we make the leap from the S-300 price to the S-400 price.

A couple years ago, Vedomosti drew the scarcely precise conclusion that the price of the S-400 will double the S-300′s price (and the S-500 double the S-400′s). 

So perhaps a “battalion set” or a battalion of the S-400 will go for $320 million.  That would be one full-up launch vehicle for $40-50 million.

The only other shred of information is the widely-reported Financial Times story saying, if the Russians added the S-400 to a $2 billion arms deal with Saudi Arabia, the price of the sale would climb to $7 billion.  But lots of Russian reports say Moscow won’t be selling the S-400 abroad soon.  The military obviously hopes that’s true, so it can get first.

But not every customer is Iranian, not every one will have to pay a premium price, and not every customer is foreign.

Which brings the trickier question of what Russia’s Defense Ministry has to pay.  It’s simply impossible to guess.

Certainly a lot less than buyers abroad.  The military’s bought some S-400 systems so there is a going price.  OAO Concern PVO Almaz-Antey’s costs are a big question as is the level of profit the government is willing to tolerate.  

The government owns Almaz-Antey, so one part of government is selling to another.  It’s a prime example of angst over GOZ ”price formation” in recent years.  There was a similar big-ticket dustup over submarine prices with Sevmash.  It’s something of a Mexican standoff.  The buyer doesn’t have other supplier alternatives.  And the seller may not be allowed to sell elsewhere. 

The Defense Ministry, the government don’t want to pay a lot and have the power to refuse and yet still receive goods.  The question is how many.  That’s ECON 101, friends.

If those buyers set their price below equilibrium, Almaz-Antey will provide a lower than desired quantity more slowly than the buyers want.   And Almaz might have other buyers as an option, an advantage Sevmash lacks.  So “price formation” for the S-400 is all about agreement on Almaz’s costs and an acceptable level of profit.  That agreement is apparently not smoothly worked out yet.

General Trash

Late last week news services reported the Investigative Committee (SK) lodged serious allegations against former commander of the Special Designation Command (KSpN), retired General-Colonel Yuriy Solovyev.  The KSpN was a forerunner of today’s VVKO.

Retired General-Colonel Yuriy Solovyev

The gist of the story goes like this.  In 2006, Solovyev supposedly allowed a commercial firm, Proyekt Stroy to establish and operate an unregistered landfill on military property under his command.

Specifically, military unit 62845, which, according to Warfare.ru, is the 584th Guards SAM Regiment (5th PVO Brigade), near the settlements of Lytkino, Marino, and Povarovo in Moscow Oblast’s Solnechnogorsk Rayon.

Vicinity of Lytkino, Marino, and Povarovo

The regiment operates S-300PM (SA-20 / Gargoyle) SAMs.

The SK apparently plans to charge him for ”exceeding his authority with infliction of serious consequences.”  Gazeta.ru reports the 64-year-old ex-general checked into a hospital (where he can’t be charged or interrogated).  His alleged crime could bring a possible 3- to 10-year prison sentence.

According to Gazeta, Solovyev contracted with Proyekt Stroy to reclaim some land, but actually allowed it to use it for an illegal landfill.  The dump grew five times, from four to 20 hectares (about 50 acres or 1/5 of a square kilometer), during Solovyev’s tenure, according to the SK announcement.

Gazeta says specialists estimate the landfill has caused 8 billion rubles in environmental damages.  The investigation is continuing, and more names connected to the case are expected to emerge.

The news site noted that the case stemmed from an MVD investigation back in March.  The MVD announced then that “an organized group consisting of former and current highly-placed RF Defense Ministry officials” was responsible for the dump.  At the time, it estimated 13 billion rubles in damages to the state.

The MVD said the pits Proyekt Stroy dug threatened Moscow’s reservoirs and groundwater sources.  Federal Water Resources Agency experts found concentrations of toxins elevated by more than 200 times at the site.  Vzglyad’s report on this story indicated mercury alone was found at 30 times the allowable level.  Proyekt Stroy reportedly cut 18 hectares of forest before digging the landfill.

Gazeta adds that locals described the dump as the size of five soccer fields and having a powerful stench of methane.  One talked of changes in the color of a nearby stream’s water.  He also estimated possible profit from the trash heap at  $100,000 per day, and confirmed that the military controlled access to the site.

Experts claim this isn’t a unique story, with more than 700 unsanctioned dumps located around Moscow.  They’ve been ignored, but the problem is catastrophic.  New Moscow Oblast Governor Sergey Shoygu has vowed to close illegal landfills, according to Vzglyad.

Kommersant’s March reportage indicated the dump was first reported by locals last September.  The paper claimed 50 “guest workers” work there and live in nearby barracks.  It added that the SAM regiment’s missile launchers were not more than 200 meters from the site.

Kommersant concluded ominously:

“Now the investigation will clarify exactly who in the Defense Ministry permitted the organization of a trash heap right next to militarymen and why they closed their auditing eyes to its operation.”

They’ve apparently found at least one person to blame.

Realities of Rearmament

Pantsir-S (photo: Topwar.ru)

RIA Novosti yesterday quoted a VVKO spokesman who indicated a second battery of Pantsir-S anti-aircraft gun-missile systems will go into service this fall around Moscow.  For the record, he stated:

“At present, alongside an A-150 missile defense [PRO] division, two    S-400 anti-aircraft missile regiments in two-battalion configurations, deployed in Elektrostal and Dmitrov, provide Moscow with anti-air and anti-missile defense.  One of them already has a ’Pantsir-S’ battery in its composition, in September-October, the second regiment will also receive the same battery complement.”

The spokesman added that, in August, the new Pantsir-S battery, along with its  S-400 regiment at Dmitrov, will be in Ashuluk to perform ‘test’ live firings against low-altitude targets.

Novosti has some video of the Pantsir as does a background piece by Arms-Expo.ru.

Let’s add things up as best we can.

First Deputy Defense Minister Sukhorukov has said the army will get 28 Pantsir-S systems in 2012.  The VVS CINC said there would be two more S-400 regiments (for a total of four) before the end of 2011.  But, there are, as the VVKO spokesman says, still only two.  The CINC also said the next six Pantsir-S systems would be for the Moscow area.  The first four went to Novorossiysk.

Recall there was some question whether ten delivered in 2010 were for Russian forces or some foreign customer.  Have we somehow lost track of six of those ten?

Now all these numbers are pretty low when there’s talk that 200, 600, or possibly (incredibly?!) as many as 1,000 Pantsir-S might really be required.

The case of the Pantsir-S is a good example of how, for all the worry about a massive Russian rearmament program, this rearming has been pretty slow thus far.

Zelin’s Update (Part III)

In the middle part of General-Colonel Zelin’s incredibly long NVO interview, he reacts to Defense Minister Serdyukov’s high command changes and other structural realignments over the last couple years.  He also shares thoughts on the state of VVS training.

Zelin speaks to interviewer Viktor Litovkin like a 58-year-old three-star who’s surprised to have stayed at his post as long as he has.  He speaks like he isn’t concerned about being retired.

Asked what he and his Main Staff do now that the VVS operate under the four MD / OSK commanders, Zelin responds that plans to create an automated C2 system (ASU) haven’t quite gotten there.  He talks and is online with the district commanders often.  But, he says:

“The main thing is combat training remains with the VVS Main Command. Organizational development (stroitelstvo or строительство) of the service and combat training.  And without combat training what kind of employment can there be?”

There were, he continues, arguments and unresolved issues:

“But during the decisionmaking I proved my point of view, my vision of present problems, sometimes they had to agree, sometimes they had to listen on several issues, but, since now decisions have been made, we have to fulfill them.  To get to work.”

But he grouses a bit more.  He sounds like a man with responsibility who lacks authority.

The ASU isn’t working, but service central command posts (TsKP or ЦКП) were eliminated.  Regardless, Zelin says he has to organize and control training.  Every day 70-80 units have aircraft flying, and they have to be tracked.  They can’t just be given a mission and forgotten.

Asked about the newly-established Aerospace Defense (VKO) Troops, Zelin claims interestingly, that only PVO brigades in Russia’s central industrial region — the old Moscow AD District, KSpN, or OSK VKO — went over to them.  He says MD / OSK commanders got the rest, and he equips and trains them for regional commands to operate.  His view seems to be VKO is limited to strategic and theater MD.  You can’t, he opines, have PVO without air defense aviation integrated into it.  According to Zelin, a single national system of air defense, including Troop Air Defense, is needed, but a decision’s been made and it’s left but to fulfill it.

Before talking more about training, Zelin reiterates that a single system of net-centric strategic C2 and decisionmaking is the goal, but they aren’t quite there.

He seems envious of the large-scale, largely automated airspace control systems he’s seen in the U.S., Europe, and Japan.

On training and flight hours, Zelin says he’s got no problems with material support (i.e. POL), but problems addressing aircraft service life support [ресурсное обеспечение].  He states frankly he worries about maintenance provided (or not) by civilianized, outsourced Oboronservis affiliate Aviaremont.  There is plenty of money for maintenance, but those responsible aren’t getting it done.  While the Glavkomat has heartache about aircraft serviceability:

“Our other structures for some reason are responsible only for financial flows.”

Zelin was asked earlier if 130 flight hours was the VVS goal.  He says last year pilots got 340,000 hours, or 90 per pilot.  That makes roughly 3,800 pilots, if they’re shared evenly (they’re not).  Eighty percent of young pilots got not less than 100. In some cases, it was harder and they got a little more than 50.  Zelin adds this is still better than the 1990s.

Where’s the Logic? (Addendum)

S-400 Launcher (photo: ITAR-TASS)

One shouldn’t ignore what doesn’t make sense . . . last week the Russian press reported again that the Baltic Fleet’s PVO units (Kaliningrad’s 3rd Aerospace Defense Brigade?) will receive their first S-400 launchers before year’s end.  The first report came in August.  ITAR-TASS cited a source this time – Baltic Fleet Commander, Vice-Admiral Viktor Chirkov.

Chirkov didn’t say how many the fleet will get, but he said the S-400 will replace old S-200 (SA-5 / Gammon) surface-to-air missiles.  He says his crews are currently conducting “acceptance-handover” launches, presumably at Ashuluk.

It doesn’t seem logical.  SAM brigades around Moscow can’t get S-400s on time and Chirkov is talking about putting them in Kaliningrad.  And his assertion he’ll get them this month seems odd given the loose schedules and passed deadlines associated with the program.

President Medvedev just finished saying one measure against European missile defense would be deploying the S-400 to protect SYaS.  But SYaS aren’t based in the Russian exclave.  It seems Medvedev would’ve announced it if the military intended to put the new SAMs in Kaliningrad.  Are S-400s going to intercept    SM-3s launched from Poland?  Are they going to protect Iskanders in Kaliningrad?

We’re left waiting to see the logic (and truth) in these reports.  Of course, there doesn’t necessarily have to be a logic compelling or sensible to outsiders.

Thirteen VKO Brigades

Thirteen VKO Brigades

A little additional on that westward-leaning VVKO . . . the 13 VKO brigades are only a part of VVKO, but here’s how they’re laid out. 

They’re numbered 1-12 and 14. Six are in the Western MD. One in the Southern. Three in the Central. And three in the Far East MD.

 

• 1st Aerospace Defense Brigade, Severomorsk, Western MD.
• 2nd Aerospace Defense Brigade, Khvoynyy, Western MD.
• 3rd Aerospace Defense Brigade, Kaliningrad, Western MD.
• 4th Aerospace Defense Brigade, Dolgoprudnyy, Western MD.
• 5th Aerospace Defense Brigade, Petrovskoye, Western MD.
• 6th Aerospace Defense Brigade, Rzhev, Western MD.
• 7th Aerospace Defense Brigade, Rostov-na-Donu, Southern MD.
• 8th Aerospace Defense Brigade, Samara, Central MD.
• 9th Aerospace Defense Brigade, Ob, Central MD.
• 10th Aerospace Defense Brigade, Chita, Central MD.
• 11th Aerospace Defense Brigade, Komsomolsk-na-Amure, Far East MD.
• 12th Aerospace Defense Brigade, Vladivostok, Far East MD.
• 14th Aerospace Defense Brigade, Yelizovo, Far East MD.

News on New Almaz-Antey Plants

According to TsAMTO, the press-service of OAO Concern PVO ’Almaz-Antey’ says the firm will sell supplemental stock this month, and some of the extra working capital will be used to finance construction of two new surface-to-air missile assembly plants.  Hat tip to VPK.name for highlighting the story.

Specifically, Almaz-Antey intends to spend more than 3.5 billion rubles to finance the new factories.  Four and a half billion rubles in federal budget money was already allocated to this effort in 2010 in exchange for additional government shares in the company.  And Almaz-Antey is also using government-backed credit in the expansion. 

The assembly facilities will be in Nizhniy Novgorod and Kirov.  They are supposed to be complete in 2015.

Where’s the Logic?

A ”highly-placed” Navy source has told RIA Novosti that S-400 / Triumf surface-to-air missile systems are arriving in the Baltic Fleet.  The source claims fleet air defense personnel are going to Ashuluk for training.

The news agency said a ”highly-placed Baltic Fleet staff representative” confirmed announcements from several media outlets about the fleet receiving two S-400 battalions before the end of 2011.

Perhaps some healthy skepticism is in order.

The S-400 isn’t exactly bursting out the factory gates.  A second S-400 regiment hasn’t appeared at Dmitrov, and a third has already been promised for Moscow’s outskirts. 

There’s also a little matter of earlier spurious reports about where the S-400 would appear.  Recall General Staff Chief Makarov’s remark that it was deployed in the Far East in 2009.  Since then, there was talk of using it to defend the Kurils or Kamchatka, but Air Forces generals have spoken of the system strictly in terms of protecting Russia’s “central administrative and industrial zones,” i.e. Moscow and adjacent oblasts. 

Maybe it would make some sense to protect the country’s northwestern approaches from ever-dangerous Germans, Swedes, Finns, etc.  But it’s not really logical to do so until Moscow’s air defenses are modernized.

And it’s certainly not logical (from a bureaucratic viewpoint) for the VVS or VKO Troops (VVKO?) to let these precious new systems slip from their hands into the Navy’s control.  A second service operator at this point would complicate training and maintenance.

Maybe it’s another tactic for negotiating with the U.S. over missile defense in Eastern Europe (like deploying Iskander SSMs in Kaliningrad).

For its part, Interfaks (according to TsAMTO) reported the Navy S-400s would be placed in Russia’s Baltic exclave.

At any rate, there would seem to be few persuasive arguments and little sense behind a deployment of the S-400 in the Baltic Fleet any time soon.

Who Will Own VKO (Part II)

Returning to former General-Major Tazekhulakhov’s article in NVO . . . to make VKO an integral organism under unitary leadership and command and control, with personal responsibility for solving the tasks laid on the system, Tazekhulakhov believes it best, in the current Armed Forces structure, to concentrate troops (forces) and VKO system resources in one service or troop branch.

The ex-Deputy Chief of VPVO then reviews five possibilities:

1. Give VVS PVO (including air defense aviation) to KV, and turn KV into a new branch called VVKO.
2. Disband KV, give RKO to the VVS and space launch, monitoring, and other supporting structures to RVSN.
3. Using KV as the base, create a new branch VVKO by including those VVS forces and resources currently in OSK VKO (the old KSpN, Moscow AVVSPVO, Moscow Air Defense District, etc.).
4. Without transferring or resubordinating any of VVS or KV, establish a Strategic Command of VKO (SK VKO), and designate a commander to whom every MD / OSK, and every PVO, RKO, and REB resource would be subordinate for VKO missions in peace and wartime.
5. Divide VKO along the existing MD / OSK lines with each of the four commanders responsible for the mission with common command and control exercised by the RF Armed Forces Central Command Post (ЦКП ВС РФ).

Tazekhulakhov says none of these possibilities is ideal.  Currently, VKO elements belong to different services, troop branches, Armed Forces structures, and even civilian departments.  PVO and RKO forces and resources aren’t evenly distributed throughout the RF.  And some are operationally subordinate to regional MD / OSK commanders and others (RKO and REB) to the center.  Triple subordination — administrative, operational, and support — violates one-man command for the VKO system.

Tazekhulakhov says the first three variants ask service or branches to perform missions outside their traditional competence.  Variant four would require agreement on the authorities of the VVS CINC, MD / OSK commanders, and the SK VKO commander.  Variant five makes it hard to find one commander responsible for VKO.

Of all variants, Tazekhulakhov finds variant two best.  It keeps the current integrity of VVS, and cuts one branch and reduces command and control organs.

But he’s found another problem not yet addressed — how to treat operational-tactical PVO and PRO of the MDs and fleets.  For it to operate on the same territory and with the same missions as strategic VKO, reconnaissance and warning information exchange and command and control and REB coordination has to be worked out.  And MD / OSK commanders won’t want to subordinate their forces, plans, and responsibilities to a VKO commander.

Lastly, Tazekhulakhov steps back to look at a bigger picture.  Why develop VKO?  With whom and how is Russia preparing to fight?  He concludes, from all appearances, U.S. missile defense won’t seriously impede Russian strategic nuclear forces, and, to some extent, Moscow has wasted time worrying about it:

“Russians need to stop getting harnessed, it’s time to get moving, and not simply waddle, but race full speed.  The result of our procrastination is obvious:  Russia is still trying through negotiations to find a compromise between its and NATO’s positions on missile defense, under cover of the protracted negotiating process, the American missile defense system in Europe is already approaching very close to Russia’s borders.  Evidently, it doesn’t do to waste time, hope and focus on NATO.  It’s essential to take serious military-political decisions and do what’s needed and useful for Russia, without looking at others.  No one, first and foremost the U.S., will give us anything, especially in the armaments area.  We have to rely only on ourselves.  Russia, undoubtedly, has no other way.”

Who Will Own VKO (Part I)

Retired General-Major Aleksandr Tazekhulakhov – Deputy Chief of Troop Air Defense in 2005-2009 — has written on military reform (and on VKO) before, but his piece in Friday’s Nezavisimoye voyennoye obozreniye caught one’s attention.

Let’s get to the main points of his very long, but interesting, article.

Essentially, Tazekhulakhov asks whether trying to decide which service or branch will own VKO isn’t the most expensive and useless project.

The former air defender suggests that, if the character of future wars, dangers, and threats are considered:

“. . . it is essential to give priority to the development and improvement not of separate services and troop branches of the Armed Forces, but of strategic and operational-strategic reconnaissance-combat (offensive and defensive) systems, which are being established on the basis of troop (force) groupings on strategic axes with concrete combat missions.”

Tazekhulakhov says President Medvedev is looking for a unified VKO system, while Defense Minister Serdyukov is planning to deliver VKO Troops [войска ВКО].  The former one-star says:

“Considering that the creation of a system of aerospace defense (VKO), or of VKO Troops could turn out to be the most visible, expensive and at the same time most senseless and useless project, it’s essential to review once more the existential problems and variants for solving this complex mission.”

He stresses that the national missions of VKO can only be resolved according to a common concept and plan, under united command and control.  And he argues against near- or medium-term thoughts of providing equal defense for all Russian territory and borders.  He cautions against thinking the combat potential of VKO systems might someday compare with that of strategic nuclear forces:

“No country in the world today has or can foresee in the medium-term future a missile defense [ПРО] system which would be capable of repulsing a mass (counterforce) missile-nuclear strike, or even a strike consisting of several ICBMs.  Therefore it’s expedient to limit the scale of employing VKO systems to the following framework:  repulsing strikes employing single or small groups (3-5) of ICBMs, IRBMs, operational-tactical missiles, tactical missiles, single, group, or mass strikes by other means of air attack, destruction (suppression) of satellites and other space objects.  Limiting the scale of VKO system employment will allow for reducing expenditures on its maintenance, for making combat missions specific, and for concentrating efforts on developing the most important system components.”

Establishing the VKO system, according to Tazekhulakhov, is a two-fold task. 

Firstly, PVO, PRO, PRN, and KKP [air defense, missile defense, missile attack early warning, and space monitoring] systems have to come under unitary command and control.  This, he says, is an administrative and organizational task that can and should be done in the timeframe indicated by Medvedev.

Secondly, and more troublesome, is the process of uniting the various supporting elements of VKO – what Tazekhulakhov calls the “hidden part of the iceberg” or the “horizontal system components.”  They include reconnaissance and warning, fire and functional defeat (suppression), command and control, and material support.

He claims, however, that, for 30 years, state leaders, military leaders, military scientists, and industry representatives have tried without success to resolve this problem.  It has administrative, functional, technical, algorithmic, and programming aspects requiring resolution on a state level rather than a departmental [Defense Ministry] one.

Thus, Tazekhulakhov limits his discussion to the possibilities for solving the first (“tip of iceberg” or “vertical system components”) problem.

To be continued.