Russia admits manufacturing weaknesses

The Russian government promulgated an interesting decree recently. It prohibits the import of foreign goods or work by foreigners for the Russian defense and security sectors, except in cases where the goods or labor is not available domestically. The accompanying list of goods that are exempt from the restriction because they are not produced in Russia nicely demonstrates the areas where Russian defense industry is weak.

Here’s a rough translation of the list:

  • Casting machines used in metallurgy
  • Machines that remove material by laser or other light or photon beam, ultrasonic, electric discharge, electrochemical , electronic beam, ionic – beam or plasma arc processes
  • Waterjet cutting machines
  • Machining centers and unit construction machines used for metal processing
  • Metal lathes
  • Machine tools for drilling, boring, milling, tapping, threading by metal removal
  • Machines for deburring, sharpening, grinding, honing, lapping, polishing or other finishing of metal or ceramic metal using grinding stones, abrasives or polishing products
  • Machines for planing, cross- planing, grooving , broaching, gear cutting , gear grinding or gear finishing , sawing, cutting- off and other machine tools for working metal or ceramic metals by removing material
  • Machine tools ( including presses) for working metal by volume stamping, forging or stamping
  • Metal working machines (including presses) for bending, folding, straightening, cutting,  punching or notching; presses for working metal or carbide metals
  • Other machine tools for working metal or ceramic metals without removing material
  • Machine tools ( including machines for assembly using nails, staples , glue or other means ) for working wood, cork , bone, hard rubber , hard plastics or similar hard materials
  • Measuring or checking instruments, including appliances and machines for measuring or checking geometrical quantities

I don’t know much about machine tools, so someone else will have to address the question of what fraction of machine tools commonly used in defense industry is found on this list. Even someone with little knowledge of the intricacies of industrial production can see that the list shows that there are significant weaknesses in Russian industry’s ability to produce high-tech tools for modern construction methods.

Secondly, the promulgation of the decree in the first place shows that protectionist impulses continue to dominate in the Russian government. To the extent possible, the government is seeking to produce domestically whatever equipment it can.

 

The modernization of Russia’s nuclear submarine forces

Yet another Oxford Analytica brief. This one from January. Planning to resume new posts in June, though there will be a couple more OA briefs posted in May.

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The nuclear-powered ballistic missile submarine (SSBN) Yury Dolgoruky officially became part of the Russian navy on January 10, more than a decade after it was initially contracted. It is the lead vessel of the Borey class, equipped with the new marine-launched ballistic missile system (SLBM) Bulava, which has a maximum range of over 8,000 kilometres. The Yury Dolgoruky was commissioned soon after the launch of SSBN Vladimir Monomakh, the third submarine in the series, in late December. These developments have led to conjectures that Russia may again pose a serious security threat to the United States and its NATO allies.

Impacts

  • Work on the Borey and Bulava projects will help Russia assess quality control issues and improve production in other areas.
  • The Russian defence budget will continue to prioritise nuclear weapons, limiting Moscow’s ability to modernise its conventional military.
  • Moscow’s defence upgrades will not have a major impact on US-Russian relations, which are increasingly focused on other issues.

ANALYSIS: In February 2011, Russia’s former deputy minister of defence announced the launch of the State Armament Programme 2020, stressing that the modernisation of Russia’s strategic nuclear weapons would be a top priority.

Motivating factors

Moscow’s decision to focus on nuclear modernisation is motivated by several practical and strategic considerations:

  • Outdated nuclear arsenal: The bulk of the arsenal is approaching the end of its service life.
  • Insufficient conventional forces: Russia’s non-nuclear forces cannot, on their own, deter potential conflicts with major powers.
  • Protection: A solid nuclear arsenal would help protect Russia’s interests, including its economic stakes in the Arctic.
  • ‘Superpower’ status: Nuclear forces are one of Russia’s few remaining claims to a prominent position in the international system.

Critically, modernisation efforts should not be misinterpreted as a serious new threat to NATO.

Strategic naval forces

The Russian navy currently operates a fleet of six Delta IV and three Delta III SSBNs.

Outdated fleet

The older Delta IIIs, based in the Pacific Fleet, are armed with 16 SS-N-18 missiles per boat, carrying three warheads each. These submarines first entered service in the late 1970s and are now approaching the end of their lifespan. The Delta IV SSBNs, which are based in the Northern Fleet, are each armed with 16 SS-N-23 Sineva missiles carrying four warheads per missile. They entered service in the mid-1980s and are gradually being overhauled in order to extend their lifespan by an additional ten years. The oldest submarines will be decommissioned in 2019 and the last of the class is expected to be retired by 2025. Because of the overhaul schedule, in recent years, between six and seven strategic submarines were on active duty at any one time.

Modernisation

The Delta IIIs are slated to be replaced by three Borey-class submarines, which are expected to be commissioned over the next two years. Following the commissioning of Yury Dolgoruky, the first of these SSBNs, earlier this month, the navy will be commissioning the Aleksandr Nevsky later in 2013 and the Vladimir Monomakh in 2014. Each of the nuclear-powered submarines will contain 16 launch tubes for the Bulava missile. Subsequent hulls — known as Project 955A — will be modified to carry 20 Bulava missiles.

According to the State Armament Programme, another five modified Borey submarines will be commissioned by 2020, bringing the total number of next generation SSBNs to eight. Since the six Delta IV submarines are slated to retire between 2019 and 2025, the construction schedule for the new submarines can be extended by up to five years without forcing the Russian military to reduce its current active fleet of eight SSBNs, which it perceives as the necessary minimum for maintaining Russia’s strategic deterrent capability.

Expansion

In the longer term, there is a chance that Russia will increase its SSBN fleet from eight to ten units either through the procurement of two additional modified Borey submarines or the construction of a new class of SSBNs. The ultimate decision to expand will depend on the availability of funding as well as the successful completion of the Bulava missile tests.

Missile problems

The Bulava is the sea-based version of the SS-27 and RS-24 missiles. In contrast to its land-based prototypes, its development ran into serious obstacles during the initial testing phases. In eight of the first twelve flight tests, the Bulava suffered critical failures.

Bulava problems rectified?

According to the weapon’s lead designer, the problems were due to lack of necessary equipment and insufficient oversight. Moreover, the Russian industry was unable to provide Bulava manufacturers with the necessary components in a timely manner. The production team has recently increased control over the production process, which appears to have paid off: since October 2010, there have been seven consecutive launches of the Bulava, all of them successful.

Further production issues

In July 2011, the Ministry of Defence announced its plans for the serial production of the Bulava. The next launch was expected to take place in October 2012. However, it was postponed until July 2013 because of unresolved problems with automated control systems for the launch mechanism. As a result, the Yury Dolgoruky submarine was commissioned with 16 empty missile containers. Without the missiles, the submarine has little practical value, which places a great deal of pressure on the defence industry to solve the outstanding problems as quickly as possible.

Implications

Since the end of the Cold War, nuclear arms have become largely peripheral to US-Russian relations. Instead, issues such as energy security, international terrorism and the future of newly independent states on Russia’s periphery have taken centre stage. The ongoing dispute with NATO concerning plans to erect a missile defence shield over the alliance’s territory appears to be primarily due to Russia’s perception of having been excluded from the European security infrastructure, rather than to fears of a nuclear attack by the United States or its allies.

CONCLUSION: The defence industry will endeavour to resolve the remaining technical problems with the Bulava, indispensable to the new generation of strategic submarines, which were designed simultaneously with the missile system. The missile will likely be fully operational by the end of 2013. Given that the new submarines are primarily intended to replace existing SSBNs that are nearing the end of their lifespan and that the role of nuclear arms has become less prominent in the US-Russian security relationship over the past decades, SSBN modernisation should not be misinterpreted as a new threat to NATO.

 

No more imports?

It seems that the new leadership team at the MOD has decided to stop using the threat of importing armaments from abroad to get Russian defense industry to improve the quality of its products. For a couple of years, this seemed to be a favorite tool for former Defense Minister Serdyukov, especially in his bid to improve the quality of Russian tanks and armored vehicles. I covered the topic on several occasions, in particular here and here. A recent report to the Military Industrial Commission’s Public Chamber also took up the question.

But just in the last week, there have been two indications that the MOD has turned away from imports and will return to the autarkic model of military procurement that has been more traditional for the country’s armed services. First, the commander of Russia’s Ground Forces announced that there will be no further orders of the Italian IVECO LMV65 armored vehicle, known in Russia as the Lynx. Under the previous regime at the MOD, an Oboronservis-owned plant in Voronezh was to produce these vehicles under license while undertaking an effort to use as many Russian components as possible. Just last July, the ministry had asked the government for permission to increase the order from 727 to 3000 vehicles. Now it appears that while existing contracts will be fulfilled, no more orders will be forthcoming and the ground forces will instead be equipped with the Russian-made Tigr vehicle, which is better armed but less well armored than the Lynx.

Just yesterday, Military-Industrial Commission Deputy Head Ivan Kharchenko called the Mistral deal absurd and argued that it has caused significant damage to the state and the Russian shipbuilding industry. Last month, the MOD announced that it is deferring plans to build the third and fourth Mistral ships in Russia, while continuing on with construction of the first two hulls in France. It seems that the only reason Russia has not canceled the contract altogether is that it would then be required to pay huge financial penalties to the French contractor.

All of this indicates that domestic defense industry has won its battle with the MOD over procurement policy. The conflict all along was between the real needs of the military for new equipment and the desire of defense industry to keep the money coming in regardless of whether or not it was able to provide the military with the equipment it needed in a timely manner. Instead, we may be returning to the old ways where the military is given little choice but to buy the equipment that the defense industry is producing, regardless of whether it fits the military’s needs. In some sectors, defense industry is well-positioned to fulfill the military’s needs. In others, imports seem to be the only solution, at least in the short to medium term. In a recent conversation, my colleague Ilya Kramnik noted that the An-26 light transport aircraft is soon to be retired, with no domestic replacements yet available. Neither the An-140T or the Il-112V are currently available, nor are they likely to be ready for serial production by 2016-17. In that case, Kramnik argues that the only possible replacements would be foreign planes such as the Alenia C-27J Spartan or the EADS CASA C-295. So the Russian military will have to consider the question of imports soon enough.

In the meantime, however, the defense industry’s defeat of Serdyukov reduces the likelihood that the military will get the equipment it needs. It will take time for the MOD to amass the political capital to fight back against the industry and its allies. The result will be that the industry will get its money, while the military will be promised new equipment that in many cases will not arrive on schedule. In a few years, the military’s situation will get even worse, while the MOD will have rebuilt some of its lost political capital. At that point the fight over imports versus domestic manufacture will resume  – but that won’t come for 3-4 years.

 

Taking armaments imports seriously, part 2

Yesterday, I discussed some of the findings of a report by Viktor Murakhovsky and Ruslan Aliev on the effectiveness of arms imports, international cooperation and technology transfer in Russia’s military industrial complex. Today, I conclude the discussion by looking at the parts of the report that examine specific examples of import deals, the risks of import dependence, and the report’s overall conclusions.

The report notes that the Russian procurement system has no way of determining the gaps in domestic procurement that have to be addressed through imports. It also has no way of choosing among alternative types of weapons systems when making foreign procurement decisions, given its lack of experience with open international tenders. Finally, it has little experience in formulating advantageous contracts with foreign defense firms through means such as offsets and joint R&D. Instead, decisions on imports are usually made because of the personal or political interests of key decision-makers in the MOD and at the highest levels of government. The report mentions a few examples:

  • Israeli UAVs that were purchased in 2009-10 are relatively outdated, have limited uses, and do not allow for the study and transfer of current technologies. This contradicts the stated purpose of the deal, which (in the words of former Deputy Defense Minister Popovkin were to transfer current technologies to our defense industry so that we can with their help develop our own prototypes of needed weapons and technology.”
  • IVECO LMV M65 “Lynx” armored vehicles, 10 of which were purchased in 2010 for testing. A contract to build 1775 of these armored vehicles at an Oboronservis/Iveco joint venture in Voronezh was signed in 2011, without any kind of open tender being conducted. Furthermore, it was signed before testing on the vehicles was completed and without a discussion of what role the vehicle would play in Russia’s military. According to the report, the likelihood that the plan to use 50% local components in the vehicles’ construction is very doubtful because many of the components belong to other foreign firms that have not agreed to license their production to Russian firms. The contract was signed without an open competition.
  • The Mistral amphibious assault ship has been criticized in Russia because Russia does not need such a ship, does not have the infrastructure to maintain the ship once it is built, and the government’s ability to finance  serial production is highly uncertain. The authors argue that there is no clarity on whether Russia will get useful technology, such as the SENIT 9  tactical combat information system and the SIC-21 battle group C2 system, as part of the deal. Other components, such as the power plant, come from European advances in civilian shipbuilding and could be acquired commercially for a Russian-built ship without any problems. The most attractive feature of the Mistral for the Russian Navy is its multifunctionality; it would be highly useful for the RFN to have a ship that can serve as an all-in-one barracks, HQ, hospital, helicopter carrier, and amphibious landing ship. But there are other options for these types of ships, and a tender could have led to a more advantageous deal.
  • The establishment of a training center in Mulino by the German Rheinmetall Defense Company is the one positive example of foreign procurement cited in the report. In this case, there are well-defined Russian subcontractors on board, the offsets are included in the contract, and Russian companies will benefit from the experience of technical integration by being involved in the project. (There’s no mention of open tenders here, though. I’m not sure why the authors don’t care about this factor in this one case — DPG)

The report’s final substantive section addresses the risks and benefits of dependence on imports of military technology. Risks include the possibility that the selling country will not be able or willing to supply needed parts or armaments in wartime and even blocking functionality of electronic systems and components should the purchasing side get involved in a conflict with an ally of the selling country. Excessive dependence on imports would also have negative consequences for domestic defense industry. However, if done right, imports would provide a number of benefits for Russia, including the ability to study and adopt the technical solutions used in foreign equipment, the ability to quickly fulfill the needs of the military in areas where domestic defense industry is weak, the possibility of establishing joint production of some types of equipment that could then be sold at a profit to third countries. The authors then spell out a number of factors that would allow Russia to have an effective system for importing military equipment. These include open tenders, offsets, requirements for tech transfer and local licensed production, the establishment of clear rules that apply to all decisions on import of foreign military equipment, guarantees that support for imported equipment would be provided regardless of future circumstances, and the depoliticization of future deals. They highlight three criteria for importing equipment: 1) it must be needed by the military, 2) it must not have suitable domestic analogs, and 3) it must not be critical for the military’s needs, reducing the risks of a breakdown in deliveries. Based on these criteria, the types of equipment that Russia might want to import in the near future include communications and navigation systems, aircraft engines, sniper equipment, and UAVs. France and Italy are listed as the most suitable partners, due to the qualifications of their defense enterprises and past experience in cooperation.

The report ends with a set of overall conclusions:

  • The military needs to import arms and equipment because of the prevalence of outdated equipment in the military and the defense industry’s inability to produce equipment of all types.
  • The import of military equipment carries significant risks for security and for the future of domestic defense industry.
  • The import of military equipment must be organized so that all decisions are made according to a single set of rules, with the involvement of both the state and domestic defense industry representatives. Tenders, offsets, and guarantees of support must be part of all contracts.
  • In most areas of military production, there is no need for imports. In some areas imports are needed in order to study foreign experience so as to improve future domestic production.
  • Tech transfer and joint production are of greatest interest for Russia.
  • Laws on the import of high tech components need to be simplified.
  • The MOD must take the needs of defense industry into account in formulating its procurement and import policies, in order to ensure that defense industry capabilities are maintained and improved.
  • Russian defense industry needs to be subjected to a technology audit in order to clearly formulate its problems and goals. This audit would help in formulating an import strategy.
  • All import contracts need to be audited to ensure that they are financially and technically sound. Doubtful contracts should be suspended.
  • Institutional imbalances between the MOD and defense industry need to be corrected.

 

 

Taking armaments imports seriously, part 1

The Military Industrial Commission’s Public Chamber is considering a report on the effectiveness of arms imports, international cooperation and technology transfer in Russia’s military industrial complex. The report is authored by Viktor Murakhovsky and Ruslan Aliev. The report addresses the history of Russian military imports, going back to World War I. It also looks at the comparative experience of other major military produces around the world, especially the US and France. It then plunges into the issues surrounding the Russian MOD’s recent forays into importing military technology, concluding with recommendations on how to make the process more effective. The entire report is quite long, 25 pages, so I’ll just focus on some of the highlights, including the conclusions and recommendations.

The history section has three conclusions, as follows:

  • Russia has always been an active importer of military hardware (including from the US during WWII and from Warsaw Pact countries throughout the post-war period).
  • Excessive dependence on imports at the start of the 20th century had a negative impact on national security and was one of the primary causes of Russia’s failures in World War I.
  • During the industrialization period, the wide use of various forms of import (including samples, equipment, and technologies) allowed for the rapid development of domestic defense industry. This positive example should be taken into account during the current “new industrialization” period.

The comparative section lists the following conclusions:

  • Military production around the world is becoming increasingly integrated, for both economic and political reasons.
  • At the same time, foreign states retain firm control over the transfer of military technologies and production.
  • Strong competition on the international arms market is partially caused by strong protectionist measures of leading states in military production.
  • States that conduct independent foreign and domestic policies (Russia, China, Latin America) are subject to even stricter export controls by the governments of these states.
  • Russia can derive practical benefit from following France’s example, both in terms of institutions and in terms of import policy.
  • The European market for arms suggests the benefits of using offsets that allow countries to import military technology on more advantageous terms.

The report’s discussion of the French example is interesting. The authors highlight the responsibility placed on the French Defense Ministry for supporting national defense industry and note that this is done primarily through Europe-wide cooperation in military R&D and high tech projects. They focus on the annually updated 30 year plan for military needs and future procurement, developed by the main directorate for armaments. The technical characteristics of new military technology is formulated by the defense industry council, which is headed by the defense minister and includes the heads of the major defense enterprises. They highlight how French efforts to use defense procurement to support national R&D and the country’s industrial base are close to what Russia needs.

The rest of the report focuses on Russia’s recent history of importing military technology, with the first section addressing the institutional structure for concluding import deals. They note that reform of the various structures responsible for military procurement have been undergoing reform for the last decade. The common thread is that until quite recently none of these structures were able to function. First Rosoboronzakaz, then the Military Industrial Commission, and then Rosoboronpostavka were all launched with great fanfare but failed to turn into agencies that could develop a full-fledged procurement policy or to conduct it. Between 2007 and 2010, a procurement system was created, with the exception of the development of mechanisms to formulate a long-term procurement policy (which would establish the role of imported equipment in the procurement plan). The lack of a long-term policy has meant that each import decision has been made based on political considerations, rather than an overall vision of the Russian military’s needs and the domestic defense industry’s gaps in fulfilling those needs.

Here are the report’s conclusions on this section:

  • Until 2000, there were no procedures in place for armaments procurement. The system remained incomplete through 2007.
  • In 2010, procurement and supervision over procurement were both concentrated at the MOD. Without a planning mechanism, decisions were made based primarily on political considerations. The imbalance of power in favor of the MOD led to a political crisis surrounding the fulfillment of the State Armaments Program for 2011-2020.
  • Importing various weapons systems is a completely acceptable scenario for Russia as long as the criteria are formulated in advance.
  • Existing import deals do not meet the needs of the military and do not match the interests of the state’s industrial and technological policies.
  • They key problem for the import of military equipment revolves around finding the optimal balance between the interests of the MOD and of defense industry.
  • This requires the reconstruction of the existing system of requirements planning and military strategy formulation at the MOD.
  • The government, probably through the Military Industrial Commission, should take on the role of analyzing the needs for future weapons systems and making decisions on whether to import them or produce them domestically.

Tomorrow, I will discuss the parts of the report that examine specific examples of import deals, the risks of import dependence, and the overall conclusions.

Predictions on future Russian air force procurement

In a post on his blog, Ilya Kramnik today made a set of predictions regarding upcoming procurement plans for the Russian air force. Here’s a translation:

Combat aircraft:

  • a second contract for 48 Su-35s in 2014 or 2015, with deliveries in 2016-20.
  • a second contract for 24-32  Su-30SMs for naval aviation in 2013-2014, with deliveries in 2015-18.
  • accepting the option on 16 more Su-34s, in addition to 124 already ordered, with deliveries through 2020. An additional large contract may be concluded after 2015, so that the air force has a total of 180-200 Su-34s by 2025.
  • a contract for 48-72 MiG-35s in 2014-15, with deliveries through 2020. Without such a contract, MiG may have to be shut down.
  • a second contract for 12-16 MiG-29Ks for naval aviation is also likely.
  • a contract for 32-40 Su-25SM(or TM)/UBMs, with deliveries in 2017-22.
  • two contracts for T-50 fifth-generation fighter jets. First one would be 8-12 aircraft for the Lipetsk combat training center. That contract is likely to be concluded in 2013, with deliveries in 2014-16. A second contract for 40-60 aircraft is likely to be concluded in 2015, with deliveries scheduled for 2016-22.

Transport and special aircraft:

  • Contract for 30-40 Il-76MD-90As in 2013, with deliveries in 2016-20.
  • Contract for 10 An-124-300s in 2015, with deliveries in 2018-22.
  • Contract for 30-40 An-70s in 2015, with deliveries in 2019-25.
  • 25-30 special purpose Tu-204/214s, with deliveries in 2015-25.
  • Contract for 100 multi-functional transport aircraft in 2015, with delivery of the first 30 in 2019-25.
  • Contract for 40 light transport aircraft in 2015, with deliveries in 2019-24. Strong possibility that these will be foreign aircraft, such as the Italian C-27J Spartan, assembled in Russia under license.

Kramnik further notes that the recent discussion of delays in fulfillment of the State Armaments Program will most likely affect the air force least and the navy the most. I tend to agree. The aircraft industry is in much better shape than the shipbuilding industry (or the tank/artillery industries, for that matter). And the Russian military is less likely to scale back its ambitions for the air force than it is for the navy, which has already largely been consigned to the role of a coastal protection force for the foreseeable future. A delay in the development and construction of new destroyers won’t really affect the functioning of the navy too much at this point (given its current set of missions), as long as it can get its corvettes and frigates more or less on time and the Borei strategic submarines still get built.

Aircraft sales do provide the largest part of the Russian defense industry’s export earnings, however. So the question that arises for me is whether the industry will have the capacity to build all these aircraft in the expected time frame. Here we should distinguish between MiG, which (as Kramnik indicates) is desperate for orders in the aftermath of losing the Indian MMRCA tender, and Sukhoi, which has lots of orders for both the Russian military and foreign customers. Will Sukhoi be able to build all those planes at the same time? Possibly, but it will depend to some extent on the company’s success in modernizing its production facilities.

Defense industry news

Every Wednesday, Voenno-Promyshlennyi Kurier publishes a new issue that includes short news items about the Russian military. I’m going to experiment with providing occasional translations of these news stories, without commentary. Not sure if  it’ll become a permanent feature or not. It will depend on how much time it takes and whether I feel it takes away from my time to write longer analytical pieces here. But I’ll try it for at least the next few weeks.

–Severnaia Verf is planning to build three support vessels for the Russian Navy, capable of being used in northern environments. The first of the ships will be built by 2014, with the last to be handed over in 2016. They will go to the Northern, Pacific, and Black Sea Fleets.

–Admiralteiskie Verfi is building a rescue ship, to be called Igor Belousov, that will be used primarily for rescue operations involving submarines. It is expected to be commissioned in 2014.

–President Putin noted that four trillion rubles, i.e. almost a quarter of all GPV-2020 funding, has been allocated to rebuilding the air force and army aviation.

–The first new Il-476 transport plane will be rolled out on July 5 in Ulyanovsk. Russian military transport aviation hopes to acquire up to 100 of these planes.  There are discussions of selling 36 more, plus four Il-478 tanker planes based on the same fuselage, to China. These would replace the Il-76 and Il-78 planes that were not sent to China because of problems at the previous assembly plant in Tashkent.

–Dmitry Rogozin stated that Russia and Israel are discussing developing a joint venture to build UAVs that could be used by both countries, with construction to take place in Russia. In the meantime, Russia may sign new contracts to purchase 48-72 UAVs from Israel, in addition to the ones already purchased in the past.

– Vladimir Putin, in the meantime, noted that Russia is planning to spend 400 billion rubles through 2020 to develop a fully indigenous UAV capability.

–Sevmash is on track to transfer the Vikramaditya aircraft carrier to India on December 5.  The ship has been undergoing sea trials in the Barents Sea since June 8.