Tag Archives: Sevmash

Ambitious Sub Building Plans

This news is dated, but wasn’t picked up widely (if at all).

Sevmash is a Busy Place, Likely to Get Busier

Sevmash is a Busy Place, Likely to Get Busier

Russia will start construction on eight nuclear-powered submarines in 2014-2015, according to the chief of Sevmash.

In 2015, Russia will lay the first sections of two Borey-class nuclear-powered ballistic missile submarines (SSBNs) and three Yasen-class attack submarines (SSNs), Sevmash General Director Mikhail Budnichenko told ITAR-TASS on 7 February.

Speaking at Defexpo 2014 in New Delhi, Budnichenko indicated that Sevmash will begin construction on two Borey SSBNs and one Yasen SSN in 2014.

The Borey SSBNs will be modernized Proyekt 955A submarines, reportedly stealthier than the first three Proyekt 955 boats. The Yasen SSNs will be improved Proyekt 885M submarines.

If Russia keeps to the schedule outlined by the Sevmash chief, it will put all remaining units of eight planned Borey SSBNs as well as seven Yasen SSNs into build.

The total number of Yasen-class submarines has been reported at six or seven at various times. They would include Severodvinsk (Proyekt 885) and either five or six Proyekt 885M boats.

Submarine Update

С новым годом ! !  Happy New Year ! !

To finish 2013, here’s some submarine news for anyone who might be a bit behind.

Oscar II SSGN Smolensk (K-410)

Oscar II SSGN Smolensk (K-410)

Yesterday Mil.ru and Interfaks reported Oscar II-class SSGN Smolensk has returned to Zaozersk, its Northern Fleet base, following two years of overhaul and modernization at Zvezdochka shipyard in Severodvinsk.

Its commander said the 24-year-old submarine successfully completed “tasks of the first phase of factory underway trials” as well as the transfer back to home base.

He said, in 2014, Smolensk will operate in “distant ocean areas” and surface at the North Pole to plant a Russian national flag and Navy ensign.

During the overhaul, the “technical readiness” of all systems, including hull and power plant, was reestablished.  Radioelectronic and navigation systems were modernized, according to Mil.ru.

An overhaul of Voronezh was completed in 2011, and Orel just arrived for refit.

The Oscar II overhauls indicate Russia is investing to keep its third generation nuclear sub numbers up, as Dmitriy Rogozin said it would in early 2012.

Shifting gears to proyekt 885 SSN Severodvinsk, RIA Novosti reported an industry source claimed this first unit of new attack submarines would be accepted at Sevmash on 30 December.

Didn’t happen.  But could soon.

Unit two, proyekt 955 Borey-class SSBN Aleksandr Nevskiy, however, officially joined the fleet on 23 December, according to RIA Novosti.

Aleksandr Nevskiy (photo: Sevmash)

Aleksandr Nevskiy (photo: Sevmash)

Mil.ru covered the acceptance ceremony.  Navy CINC Admiral Viktor Chirkov reconfirmed that Nevskiy will eventually report to the Pacific Fleet’s 25th DiPL at Vilyuchinsk.

But Russianforces.org yesterday covered the arrival of Nevskiy and unit one Yuriy Dolgorukiy at the Northern Fleet’s Gadzhiyevo base.  There, of course, they await the resolution of issues with their primary armament, the Bulava SLBM.

Nevskiy will test fire a Bulava again in 2014.

Unit three, Vladimir Monomakh, is supposed to enter the force in 2014.

Apparently, there was something to the General Staff source who told RIA Novosti that Nevskiy (and Monomakh) would be accepted without their complement of Bulava missiles.

Special Steel

Yasen Rollout in June 2010

On Thursday, Argumenty nedeli published a short article citing a source claiming Russia’s specialty steel makers aren’t very interested in supplying metal for new submarines planned for the Navy.

Argumenty’s record is interesting.  Sometimes they go out on a limb and don’t quite get a story right; other times they nail it or catch the gist of what seems to be happening.  Can’t say which it is this time.  But the paper has a tradition of looking closely at different parts of defense industry.

The story maintains Sevmash is trying to scrape together the specialty steel needed for new boats, and is short of what it needs for Borey- and Yasen-class hulls.  The paper’s OPK source notes, of course, that those boats already launched were assembled from existing sections of older submarine classes.

The source concludes rather direly:

“If the issue of steel isn’t resolved, then you have to forget about further production of our missile-carrying submarines.”

He continues:

“. . . it’s unprofitable for suppliers to produce.  Their own cost is high, but the Defense Ministry is buying a miserly quantity and trying to drive down the price on the finished item and, accordingly, on the components.”

Argumenty ends its short piece by reminding readers about the conflict between the Defense Ministry and United Shipbuilding Corporation (OSK) on the one hand and Sevmash on the other over pricing and contracts which lasted most of 2011.

That year-long battle ended in mid-November when Prime Minister Putin supervised the signing of seven submarine contracts worth more than 280 billion rubles in Severodvinsk.  There aren’t precise details on what the deal covered except nuclear-powered submarines — the modernized proyekt 955 Borey and proyekt 885 Yasen (or 955A and Yasen-M).

If Argumenty’s story is accurate, it suggests future disputes over submarine production and profit margins for Sevmash’s sub-contractors and suppliers.  Perhaps Putin’s deal was only a temporary end to the government-industry conflict.

Serdyukov Year-Ender (Part III)

A good day to finish old business . . . this covers the second half of Defense Minister Anatoliy Serdyukov’s Rossiyskaya gazeta interview.  Serdyukov, while remaining on message, seems tired or uninspired in giving this interview.  He reviews old ground rather than breaking any new.

Serdyukov talks about coming to grips with large existing stockpiles of tanks, BMPs, BTRs, guns, and automatic rifles, and indicates he’s waiting for the defense sector to propose some fundamentally new systems.  In regard to Kalashnikovs, the Defense Ministry is open to new developments from private firms but isn’t eschewing future AK purchases from its traditional supplier either.

On Mistral, Serdyukov tells RG the French will decide where it’s best to produce units 3 and 4, and Sevmash is the likely place.  But he wants them to come in cheaper than number 1 and 2 being built in France.  He expects Russia to acquire leading edge shipbuilding techniques in the process.

Serdyukov shows a flash of interest when asked about conclusions from Russia’s recent space launch failures:

“One conclusion — we have to change our approach to military acceptance.  And we’re occupied with this.  Next year we want to reformat it.  There’s already understanding about what has to be done in training units for military acceptance specialists, their incentives, and technical equipping.”

“Generally, this is a serious question.  We haven’t devoted the due attention to military acceptance because of various obstacles.  Now we are smoothing out the situation.  Not so long ago the prime minister had a conference, and Vladimir Vladimirovich Putin gave a whole series of instructions on price formation and tracking contracts.  Acceptance and production quality was one issue.  Today this task is being worked, and we are preparing proposals by the end of the year [2011].”

Serdyukov says voyenpredy can be civilians, but they should be former military men with lots of practical experience.

The last significant point in the second half of Serdyukov’s interview is his call for differentiated training for new professional sergeants — 3 or 4 months for those in motorized rifle units and 2 years or more for EW or communications specialists, for example.  The comparison he gives is training equivalent to technical secondary school or old school for warrant officers.  He indicates he’s not afraid future NCOs will become “eternal students.”

Dyachkov’s Interview

Andrey Dyachkov (photo: RIA Novosti / Sergey Safronov)

As General Director of both Sevmash and TsKB MT Rubin, Andrey Dyachkov’s a pretty significant individual when it comes to submarines.  What follows are highlights from his RIA Novosti interview last Friday.

Some blurbs have been published, but one frankly hasn’t had time to see if they captured the importance of what Dyachkov said.  Hence this summary.  It has less elegance (or perhaps fluff) than you may be accustomed to reading on these pages.

Dyachkov said the following:

  • Sevmash and the Defense Ministry signed a contract for the modernized Yasen, or Yasen-M this year.  It will be five units; Severodvinsk plus five.  Severodvinsk will be delivered next year; there were problems with some components obtained from suppliers and the Kalibr missile system needs to complete state testing.  About six months are needed for all this.
  • This year’s huge contract problems were a result of a changed Defense Ministry approach toward price formation Sevmash wasn’t ready for.  But times have changed, and Sevmash recognizes money has to be used more effectively, and ways have to be found to cut production expenditures.
  • Rubin has a contract to design the modernized proyekt 955, Borey, the Borey-A.  The contract should be signed by early 2012.  The lay-down of the first improved Borey will happen next year, and Saint Nikolay is still the working name for the first unit.  No word from the Sevmash chief on the final number of boats until after the contract is signed.  They’ve started laying down Saint Nikolay, but the official ceremony’s still to come.
  • Seventy percent of sub costs are reportedly to pay suppliers.  The main thing is getting them to reduce the cost of their products.  The Defense Ministry might even consider foreign component suppliers for some SSBN components.
  • Sevmash will take on construction of two diesel-electric proyekt 636 from Admiralty Wharves.  This will lighten the workload of the latter, and use excess capacity at the former.
  • Severnoye PKB has a contract to figure out how to modernize Kirov-class CGN Admiral Nakhimov (proyekt 1164, Orlan).  First and foremost, it needs new missiles (Kalibr and Oniks) to replace its Granit.  They are talking only about Nakhimov at this point.
  • Sevmash won’t be repairing CV Admiral Kuznetsov in 2012.  The shipyard is prepared to build a future carrier.
  • Modified Typhoon-class SSBN Dmitriy Donskoy will be kept active at the White Sea Naval Base for sub-on-sub trials of new boats.  Northern Fleet subs won’t be diverted for this task.
  • KB Malakhit has developed repair and modernization plans for the Akula-class (Proyekt 971, Bars).  Money’s been allocated and Zvezdochka will do the work. 
  • Russia may offer up the Amur-1650 diesel sub in next year’s Indian tender.  It could have air-independent propulsion, but Russia doesn’t seem really high on the idea.
  • They want to test Proyekt 677 Lada and its sonar in deeper waters next year.

Perhaps the Borey and Yasen mods reflect the problems of restarting construction that had been dormant (or at least very slow) for a long time and of using newly-made components rather than older ones.

Nyet Means “Not Yet”

Fleet Admiral of the Soviet Union Kuznetsov (photo: Denis Abramov)

Russian aircraft carrier lobbyists – admirals and shipbuilders – define persistence.  To them, nyet means “not yet” or “keep trying.”

Izvestiya’s Denis Telmanov reported this week on future plans to build two new nuclear-powered aircraft carriers by 2027 — one for the Pacific Fleet and one for the Northern Fleet — along with 15-ship battle groups to surround them.

After years of arguing, the admirals reportedly decided they need carriers (not just nuclear subs and cruisers) to “broaden the Russian Navy’s zone of influence in the Pacific Ocean and North Atlantic.”

The Navy is reportedly completing the “technical tasks” for a new carrier, with a first design due next year, and the final one by 2017.  The first hull is supposed to be launched in 2023.  According to Izvestiya, sections and components will be built in several shipyards, but final assembly will be at Sevmash to save resources instead of building a new yard large enough to put a carrier together.

The article might be as much about where carriers would be built as if they will be.  There has been talk that the nascent New-Admiralty Wharves could get this work.

Izvestiya says land-based carrier trainers at Yeysk and Saki (NITKA) in Crimea will be used.  The paper also notes the new carriers will need new support bases because the lack of them “killed” or complicated the service lives of Soviet “heavy aircraft-carrying cruisers,” including the Kuznetsov.

One surmises that Russia’s coming experience with building, basing, and operating Mistrals will affect all this too.

But let’s rewind a bit . . . Navy CINC, Admiral Vysotskiy said in early 2010 that Russia plans to launch a carrier by 2020.  Defense Minister Serdyukov, however, has said twice in the last year that Russia has no plans to build carriers in the near future [by 2020].  On July 1, he emphasized that the Genshtab and Navy will decide on the need for an aircraft carrier after a “preliminary design” is complete.

No matter how much some say “Russia must have aircraft carriers,” it ain’t necessarily so. 

It ain’t so because (1) Russia may have more important requirements to fill with its limited resources, and (2) the people talking about carriers ain’t the same people who ultimately decide which requirements get met. 

Telmanov’s article is full of this:

“Strategists insist . . . .  The Navy has decided . . . .  The admirals have selected . . . .  In the military’s opinion . . . .  A Navy Main Staff representative explained . . . .  The military is deciding . . . .”

Not this:

“The president has decided . . . .  The government has selected . . . .  The VPK insists . . . .  The defense minister explained . . . .  In the General Staff’s opinion . . . .”

When we read that these types of people have decided to build carriers, it might really happen.

Difficult Course to a Grand Fleet

Konstantin Bogdanov sees reason for pessimism when looking at the course ahead for rebuilding Russia’s fleet.  Writing in Friday’s Nezavisimoye voyennoye obozreniye, he says, despite an intention to spend 4.7 trillion rubles of the ten-year GPV on the Navy, there are technical challenges, clearly impractical schemes, and failures in what he calls the “organization-financial plan” ahead. 

Bogdanov provides us a handy review of the state of Russian shipbuilding.

He points first to OSK’s insistence on seeing new aircraft carriers (with nuclear-powered destroyers in their battle groups) on the Russian Navy’s horizon.  But Defense Minister Serdyukov has only a cold rebuff for the idea.  Early R&D into what a new carrier might look like is as far as he’s being willing to go.  It was made pretty clear that a carrier isn’t part of this GPV.

Bogdanov says OSK may be looking for work for the New-Admiralty Wharves it sees on Kotlin Island in the future.  The 30- to 60-billion-ruble shipyard could be ready in 2016.  An aircraft carrier project would help launch this idea.

Then Bogdanov turns to the Navy’s more immediate needs — frigates and corvettes.  

Proyekt 22350 frigates are needed by tens, if not 30, or even 40, of them.  But Northern Wharf is having trouble building them.  Lead unit Admiral of the Fleet of the Soviet Union Gorshkov was five years in construction, and its underway testing isn’t complete.  Fleet Admiral Kasatonov was laid down just about two years ago.  Its SAM system, Poliment-Redut with 9M96 missiles isn’t ready, and will have to be fitted right to finished frigates.  But Bogdanov sees the frigates’ VLS – the Multipurpose Ship Fire System (UKSK or УКСК) as a positive step.  It could fire antiship, antisubmarine, land-attack cruise missiles, torpedoes, and possibly SAMs.

When proyekt 22350 didn’t come along quickly, Bogdanov says, the Navy went for its own proyekt 11356M frigates like those being built for India.  But, he notes, Baltic Shipbuilding Plant “Yantar” in Kaliningrad isn’t having an easy time constructing them for its Indian and Russian customers.  There are delays in the Indian units, but Admiral Grigorovich and Admiral Essen have been laid down for Russia, and Admiral Makarov should join them soon.  The contract for a second batch of three was just signed.  They’re supposed to be “localized,” but may actually be more like the Indian versions.  They’re slightly cheaper than the proyekt 22350 at 10 billion vs. 16 billion rubles per ship.

Northern Wharf has the order for nine proyekt 20380 Steregushchiy-class corvettes (with the proyekt 22350 frigates this comes to more than 220 billion rubles).  Soobrazitelnyy (proyekt 20381) began sea trials this year, Boykiy was launched, Stoykiy is under construction, and Provornyy (proyekt 20385) was laid down.  Sovershennyy (proyekt 20380) remains under construction at Komsomolsk-na-Amure.  Bogdanov says the proyekt 20385 ships will have an eight-cell UKSK.

Bogdanov notes, however, that Northern Wharf’s production won’t be steady until its ownership issue is finally resolved.  If OSK takes over, this could have a good or bad effect on fulfilling defense orders, but the current financial questions around Northern Wharf are even worse.

Turning to submarines, Bogdanov believes the situation is more transparent, but there are still questions.

The SSBN picture is pretty clear.  Proyekt 955 Borey-class SSBNs finally have a missile that looks like it works.  Yuriy Dolgorukiy has fired it, and Aleksandr Nevskiy might this year.  Vladimir Monomakh is under construction, and they’re preparing production materials for Saint Nikolay.

The problem, he notes, is units 1 and 2 used sections and components of proyekt 971 and 949A submarines never built.  Units 3 and 4 will be built from scratch, and it’s too early to say how this will be reflected in their cost.  Bogdanov concludes another battle over inflated prices awaits, and there is, of course, still no 2011 contract with Sevmash.

It’s less clear with the multipurpose proyekt 885, Yasen-class, of which the Navy wants ten by 2020.  But these boats have been the focus of the Defense Ministry’s familiar complaint about unjustified price increases.  Unit 1 Severodvinsk was built from materials and resources on hand, and its rising price was frozen at 47 billion rubles in 2005.  The Defense Ministry says Sevmash wants 112 billion for unit 2 Kazan

Bogdanov thinks it’s hard to tell who’s justified here.  There is structural industrial inflation, and a higher costs could be the result of the frozen handover price on Severodvinsk.

Bogdanov mentions the thought given to cheaper attack boats like the Victor III or Akula, or proyekt 957 Kedr which never left the design phase.  The Yasen is intended to replace Soviet-era SSNs and SSGNs, but Bogdanov thinks it’s too complex and expensive to be built in the numbers Russia may need.  Twenty years ago the Russian Navy was planning for not less than 30 [sized of course against the U.S. fleet], and currently it has not more than 30 SSNs and SSGNs, and this is considered insufficient. 

Despite the uncertainty above, Bogdanov says one still hears talk about the need to develop a fifth generation submarine, but it’s unknown if there will be any development work on one.
 

GOZ War Winding Down?

Vedomosti’s Aleksey Nikolskiy sees a possible end to the conflict between the Defense Ministry and industry over the production of strategic nuclear systems.  His OSK source claims a multiyear Defense Ministry contract with Sevmash for proyekt 955 Borey-class SSBNs will be concluded in the coming week.  This would reportedly leave OSK with just one contract remaining to be completed.

Conclusion of a 40-billion-ruble contract for three proyekt 11356M frigates was announced Wednesday.

Vedomosti’s source said the Defense Ministry and OSK also finished a deal for proyekt 885 Yasen-class SSNs several days ago.  The paper once again cites Konstantin Makiyenko’s 500 billion ruble price tag for the new SSBNs and SSNs.

An industry source tells Vedomosti that all MIT’s ballistic missile contracts are complete.

While deals for renovating Russia’s strategic forces are apparently done at last, not all contracts for conventional armaments are finished, particularly those involving Rostekhnologii and its enterprises, according to the director of one of them.

What’s this mean?

The conclusion of submarine / SLBM / ICBM production contracts would be a relief to both sides since their absence has been the biggest GOZ news story.  If all this is done, or almost done, one would expect a major government or Defense Ministry press announcement soon.

If the submarine deals are worth 500 billion rubles, that is, once again, apparently closer to Defense Minister Serdyukov’s price than to OSK’s.

The proyekt 11356M frigates are updated Krivaks (or Talwars for India), and they aren’t exactly cheap.

The issue of incomplete contracts with Rostekhnologii’s enterprises is significant given the size and breadth of their work on weapons and military equipment.  People will ask which enterprises and systems are in question.  It also contradicts Serdyukov’s recent claims that only OSK deals needed to be inked, and implies there are lingering problems and issues in areas other than shipbuilding.

The GOZ Last Week (Part II)

We looked at last week’s news.  What’s it mean?  There wasn’t a lot of commentary about it, but there were two very good pieces.

To backtrack a little, if it looks like Defense Minister Anatoliy Serdyukov might be (just might be)  getting an upper hand on forcing defense producers to his prices instead of vice versa, then the commentaries give insight into what is happening (or may happen) if Serdyukov succeeds in driving hard bargains with the OPK.

Moskovskiy komsomolets’ Olga Bozhyeva asked a general who worked on the GOZ to comment on this year’s situation:

“The Defense Ministry now lacks an organ with responsibility for contracting work, beginning with formation of initial prices and ending with accepting the results.  In the past, the chief of armament’s apparatus performed these functions, currently it’s been transformed into a department with unintelligible functions.  Tax organ officials who’ve come into the Defense Ministry’s key financial posts can’t connect the price of a product with the characteristics of the model being produced and its contribution to the country’s security.  In the Defense Ministry in recent years, three basic methods of calculating the cost of a product have been introduced, but not one of them factors in the substantive part of the work.  They are all built on the principle:  I have a certain amount of money, I want to give you this much of it.  But putting it to concrete use no longer interests anyone.  And it turns out that the methods of calculating prices in the Defense Ministry and in VPK enterprises are different.  The people speak different languages . . . .”

Bozhyeva concludes:

“In a market economy, you have to survive somehow.  Here is not America, where work for the Pentagon brings a good profit.  With us, it only allows you to survive.  And that is if they allow it.  But they don’t let everyone.”

“Here not long ago the Defense Minister got indignant, for example, that shipbuilders [Sevmash] had become so brazen that they also put the cost of kindergartens and other “social benefits” into the price of a missile-carrier [SSBN].”

“I’m not a taxman, evidently, since I don’t understand:  but where can they put it?  Let’s take Severodvinsk here.  It is completely dependent on “Sevmashpredpriyatiye.”  Like it or not, the kindergartens, schools, hospitals, clinics, housing – the factory has to maintain all of it.  And, naturally, they put the upkeep into their production cost.  How can it be otherwise?  If there aren’t kindergartens – there aren’t missile-carriers.”

Editorializing in Nezavisimaya gazeta, Viktor Litovkin writes:

“What are the causes of such an ‘inability to agree?’  In the fact, in my view, that it’s impossible to marry purely administrative approaches to the imposition of concrete military department prices on defense enterprises with largely market relationships which exist for the defense sector today.  With achieving that degree of Gosoboronzakaz profitability in which enterprises have the chance not just to survive, but also develop.  Several defense NII and factory directors, undoubtedly following the example of MIT General Designer Yuriy Solomonov, have already even stopped ‘fearing’ to publicize their disagreements with the Defense Ministry in front of journalists.  General Director of NII Instrument-building named for Tikhomirov, Yuriy Belyy told me ‘in the ordering structures of the military department people have come, who, to put it mildly, don’t understand anything about production and price formation’ (this, by the way, also means Anatoliy Serdyukov. – ‘NVO’ No. 25).  ‘Still they always demand the reduction of invoiced expenditures, reduction of profits, of labor input.  And often arbitrarily disregard prices on final goods.’  This, in his words, is happening all over the defense sector.”

“’If we had the GOZ alone, the enterprise would have died long ago,’ Yuriy Belyy told me.  ‘There are practically no resources remaining for development after GOZ fulfillment.  It isn’t understood that wages take according to some kind of averaging principle.  Invoicing expenses also.  So goes the practical strangulation of the defense sector.  In the country’s leadership they say that the OPK’s profitability is the locomotive of industry, should be not less than 15%, but in fact it’s not more than 5-7%.  And, the main thing, not understood, is with whom to talk in the Defense Ministry.  Completely incompetent people have arrived.  Their mission is not the development of industry, not increasing the country’s defense capability, their mission is to save money by any means.’”

“An enterprise producing a final product, like ‘Dolgorukiy,’ which buys metals, nuclear reactors, various components at market prices from the monopoly producers of these products, can’t give away the good created by its workers lower or a little, one-two percent, higher than its own cost, or lower than its profitability level.  It can’t buy new machine tools, technology, reequip its production line, train and select new highly-qualified personnel, provide them housing . . . .  It can’t not think about tomorrow.”

“And from the other side, if it’s possible to pay the French one and a half billion Euros for ‘Mistrals’ we need or don’t need, then why does ‘Sevmash’ have to give away a strategic submarine extremely essential to the Navy and Russia for free?!”

The GOZ Last Week (Part I)

Let’s start with the news.  In short, Defense Minister Serdyukov told the press all GOZ-2011 contracts, except ones with OSK, were signed.  But most news outlets concluded he failed to meet Prime Minister Putin’s August 31 deadline for finishing the contracting process.

ITAR-TASS reported the Defense Ministry signed its fourth contract with OSK on August 29.  It was with Baltic Shipbuilding Factory “Yantar” for three Proyekt 11356M frigates.  Kommersant reported others are with Admiralty for three Proyekt 636 diesel-electric submarines and with Zvezda Shipyard in the Far East for nuclear submarine (probably OSCAR II-class) repairs and modernization.

But the largest and most important contracts with Sevmash for Proyekt 955 Borey-class SSBN and Proyekt 885 Yasen-class SSN production are still not signed.  The contract is supposed to cover two of the former and one of the latter that are already (or almost) complete.  Kommersant says the contracting delay means a fourth 955 and second 885 won’t be laid down until sometime in 2012.

ITAR-TASS concluded there are still differences over pricing although there is progress in the negotiations.  The wire service writes that Sevmash refuses to make concessions taking below a minimum profitability level, while the Defense Ministry calls price increases unjustifiable, and says it will only pay for concrete items regardless of the producer’s profitability.

On September 1, ITAR-TASS reported Serdyukov’s announcement that, on the whole, the Prime Minister’s order to conclude all GOZ contracts had been fulfilled.  It provided some choppy, weaseling quotes from Serdyukov:

“We are reprogramming for other requirements – precision weapons mainly, aviation, air defense . . . some suppliers because of some obstacles can’t provide their products.  . . . now we’re making changes – on the order of 30 billion [rubles].  . . . in essence, this is a formality  . . . .  Essentially, we’ve been through the entire agreed part.  The signing itself occurred yesterday-day before yesterday.  Only the United Shipbuilding Corporation contract remains.  Perhaps that’s all.”

Kommersant added Serdyukov’s comment that:

“We, unfortunately, can’t accept the figures which industry gives us.  For the most part, they are simply unjustified.”

Kommersant’s sources maintain, in addition to OSK, contracting with OAK and MIT remains incomplete, and no one’s willing to guess when this still-difficult process will end.

On September 2, Kommersant’s source said part of MIT’s contracts are done, but it would be premature to say the process is complete.

ITAR-TASS added that Sevmash’s contract is now supposed to be signed in mid-September.  The factory reportedly will agree to current prices for its submarines in exchange for some kind of “coefficient” to offset their rising costs starting in 2013.  The wire service also claimed there are now 6 of 13 OSK contracts signed.  And it put the cost of a Borey-class SSBN at a somewhat hard-to-believe 23 billion rubles.  OAK and MIT sources also told ITAR-TASS their contracts aren’t complete.

Vedomosti cited Konstantin Makiyenko on long-term submarine production costing 500 billion rubles.  If that’s eight Borey- and eight Yasen-class boats, it’s a $17 billion contract, basically $1 billion per submarine.  Thirty billion rubles a boat is a lot closer to 23 billion than the 47 or 112 billion that Serdyukov complained about in July.

Despite indications to the contrary, one has to wonder if Serdyukov isn’t very slowly winning his battle with the OPK.  But ultimately, it’s hard to say before we see what gets delivered, when, and how good it is.