Yelizaveta Dobkina, Elena Attikova, Ivan Petrov
June 4, 2014 Wednesday


Russia cannot receive the military hardware and other defense products ordered and even paid in Ukraine. Deputy Defense Minister Yury Borisov announced this on Saturday. At the end of the last week, Kakha Bendukidze recently appointed as advisor to the Ukrainian President, said that it was necessary to prohibit supply of missiles and aviation engines to Russia. Experts say that Russia will need a few years and dozens of billions of rubles to become independent from Ukrainian military industry.

Borisov announced that in May Ukraine adopted documents that prohibited supply of armament, military hardware and components to enterprises of the Russian military industrial complex. He said, "Cargoes in majority of cases paid and financed by up to 80% in advance are actually accumulated at customs offices."

Bendukidze, advisor to the President of Ukraine, proposed stopping of supply of missiles and aviation engines to Russia. In an interview to Ukrainskaya Pravda at the end of the last week Bendukidze said that "this is a strategically correct decision" and "if this is not done, if supply of armament to the Russian market is not stopped this is simply stupid."

On Friday, Deputy Prime Minister Dmitry Rogozin announced that the Ministry of Industry and Trade was preparing a plan for substitution of import of military products for the Russian defense industry. On June 10, the ministry will present an import substitution plan intended for 2.5 years. Heads of defense enterprise should already take steps to reduce dependence on Ukrainian plants.

Representative of state corporation Rostec says that in the current situation it will be necessary to follow the path of substitution of Ukrainian import and to create the necessary production in Russia. He adds that after creation of necessary facilities restarting of cooperation with Ukrainian enterprises will hardly be expedient. Along with this, representatives of Rostec presume that for Ukrainian enterprises the situation is more difficult because they export their hi-tech products mostly to Russia and reduction of cooperation with Russian partners will hit the hi-tech sector of Ukrainian economy first of all.

Last week, General Director of Motor Sich Vyacheslav Boguslaev said that any prohibition would incur damage on both parties. Without this Zaporozhye-based company Russian aircraft-building industry will have difficulties. Motor Sich is not afraid of a possible threat of stopping of supply to Russia. Boguslaev says that there are no problems in shipment and production now.

Representative of United Rocket Space Corporation reports that Russian enterprises of rocket space industry keep working with Ukrainian partners. He says that there are valid contracts obligations in the framework of which are being currently fulfilled and everyone is interested in continuation of cooperation but there are all opportunities to find a solution if necessary and to organize production of the products that are made by our partners now in Russia. Dnepropetrovsk-based Yuzhmash plant produced intercontinental ballistic missiles Voevoda (Satan according to NATO classicization). They are maintained by Ukrainian specialists still. However, their service life is coming to an end and ballistic missiles designed in Russia are being prepared to replace them. On Friday, spokesperson for Yuzhmash was not available for comments. Antonov and Ukroboronprom did not respond to inquiries.

Import substitution

According to a research report of Royal United Services Institute (RUSI) published in April of 2014, only 4.4% of Russian military import comes from Ukraine but some kinds of products are vitally important for Russian defense industry. The research report says, "30% of imported Ukrainian products are key components for use in intercontinental ballistic missiles SS-18 (RS-20 Voevoda) developed and produced by Ukrainian company Yuzhmash in Dnepropetrovsk. Homing systems of other intercontinental ballistic systems SS-25 Topol and SS-19 were developed and produced in Kharkov. About 20% of natural uranium used in Russian civil and military nuclear industries comes from the company in Zheltye Vody."

Since the Soviet time, military and civil ships have been equipped with gas turbines and reduction gears made in Nikolaev. Russia needs 60% of reduction gear of Ukrainian production for mounting on combat ships still. For Su-27, Su-30 and Su-35 fighters braking parachutes and hydraulic systems are produced in Ukraine. Production of the newest frontline bombers Su-34 depends on Ukrainian components too. Motor Sich plant located in Zaporozhye produced jet engines for various types of Russian transport airplanes including An-124 Ruslan, as well as Russian combat and transport helicopters.

Deputy Director of the Center for Analysis of Strategies and Technologies Konstantin Makienko presumes that Russia needs to spend tens of billions of rubles to put into operation import-substituting production facilities.

Source: RBC daily, June 02, 2014, p. 1


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