Development of a promising State armaments program for the period from 2024 to 2033
April 16th, 12:18
In the "Rossiyskaya Gazeta" under the heading "Arsenal under the order. In the new state program of armaments to allocate at least 21 trillion rubles," published is interesting to interview the first deputy chairman of the Board of the Military-Industrial Commission (MIC) of the Russian Federation Andrey Elchaninova of arms perspective of the State program development for the period from 2024 to 2033.
The coronavirus pandemic could not but affect the economy, so many previously laid down financial indicators began to be revised downward. But the defense industry is not in danger of being cut. There are no plans to reduce the state armament program for the period from 2024 to 2033. At least 21-22 trillion rubles will be allocated for it. These figures are comparable to the previous two similar state programs. Andrey Yelchaninov, First Deputy Chairman of the Collegium of the Military-Industrial Commission (MIC) of the Russian Federation, spoke in an interview with Rossiyskaya Gazeta about the beginning of work on the draft of a new weapons state program .
Andrey Fyodorovich, please tell us who decides what kind of weapon our servicemen will be armed with in the future and what equipment will they use to protect the interests of our country? After all, as far as I understand, the state armaments program is a document about this and about the amount of weapons to be purchased? Can we say that all these issues are to be considered by the collegium of the Military-Industrial Commission?
Andrey Elchaninov: The task of the Collegium of the Military-Industrial Commission at the current stage is to align the interests of customers with the capabilities of enterprises of the military-industrial complex. Speaking of customers, I primarily mean the Ministry of Defense. After all, it is there that the appearance of modern and promising weapons and military equipment is determined. By September 1, we expect from them and other main customers the structure of the new state program.
Then the document "The main directions of the development of weapons, military and special equipment for the period up to 2038" will be born. It is also prepared by the military department. It will include the main samples, the creation of which scientists and engineers are just thinking about. In the future, they will determine the shape of the armed forces for the future until 2033. But potentially we are looking further - until 2038.
As of the end of March of this year, unified methodological materials have been agreed upon for the formation of basic approaches to the goals and objectives of both the new state armaments program and the new version of the state program for the development of the military-industrial complex. And the role of the collegium of the Military-Industrial Commission is to combine these documents and methodological approaches at the earliest approaches. To ensure their relationship, both in terms of financial indicators and time parameters.
By September 1 of this year, the Collegium of the Military-Industrial Commission will prepare a report to the President of Russia with an analysis and assessment of security threats until 2053. It will be linked to the forecast of the financial and economic development of Russia for the period up to 2035. This document should be submitted by the Ministry of Economic Development to the Collegium of the Military-Industrial Commission by July 1 of this year. As a result, we will get some kind of financial assessment against the background of national threats.
Until September 1, 2022, proposals from all customers will be received, which will pass through the filter of our collegium. We will work with the relevant ministries. First of all, with the Ministry of Industry and Trade - to confirm the capabilities of defense enterprises. There will be a need to ensure that the requests of major customers can be met. And as a result, on July 1, 2023, a report is planned to the President of Russia on the basis of the newly formed state armaments program.
And what about the numbers? Will there be less money?
Andrey Elchaninov: We are guided by the fact that the financial indicators of the new state program, despite all the peculiarities of the economic situation in the country, will not be less in absolute terms. The provision of a similar state program for the period 2010 - 2020 amounted to 21.2 trillion rubles. The current state program (2018 - 2027) is 21.7 trillion rubles. Based on these dynamics, we expect the level of the new state armaments program to be at least 21-22 trillion rubles.
The Russian army has already reached the 70 percent level set by the president for equipping with modern weapons and equipment. Do you plan to increase this indicator and at what rate?
Andrey Elchaninov: Indeed, at the end of 2020, the level of modernity of the fleet of weapons, military and special equipment amounted to 70.1%. The task for the near future is not only to maintain the achieved this high level. But also the further provision of the armed forces with modern models of weapons and equipment that will correspond to foreign counterparts or surpass them. Naturally, this will be done taking into account the state's economic and technological capabilities.
According to the plans of the Ministry of Defense, by the end of 2023 the level of modern weapons and equipment should increase to 72.9%.
In the course of work on the formation of a new state armaments program, the main directions for the further development and equipment of the armed forces will be determined and new ambitious tasks will be set for the law enforcement agencies and enterprises of the military-industrial complex. The Collegium of the Military-Industrial Commission of the Russian Federation has already started this together with the interested departments.
Recently, the Rostec state corporation announced plans for a major restructuring of the country's entire aviation industry. The reform will affect all leading aircraft manufacturing enterprises - Sukhoi, MiG, Tupolev, Ilyushin and Irkut corporation. It was proposed to unite them into a corporate aircraft building center. As an aviation specialist, what can you say about this?
Andrey Elchaninov:The so-called transition to a single share will potentially provide financial transparency of all transactions. This means, to understand the role and place of the United Aircraft Corporation in the world market. Its capitalization, financial rating, and, accordingly, performance as a joint stock company.
It is no secret that today none of our design bureaus has a set of competencies to ensure the development and certification of a model of aircraft from scratch to series. Therefore, the consolidation of design potential and the optimization of the utilization of production sites is an inevitable process in the aircraft industry. Incidentally, this is a global trend, not our know-how.
United Aircraft Corporation intends to minimize possible damage to design and production processes. Revolutions during the covid period are of no use to anyone. It should not be forgotten that the aviation industry has been hit hardest by the pandemic. And against this background, additional shocks - staff or organizational - are definitely useless. They will definitely negatively affect the execution of contracts with government customers, both military and civilian. Therefore, now there is not a revolutionary process, but fine tuning. And Rostec confirmed this by its decision to change the composition of the Board of Directors of the United Aircraft Corporation.
Was there a need to unite the design bureaus under one roof?
Andrey Elchaninov: The decision to unite the design potential and merge the design bureaus "Mig" and "Sukhoi" is a forced measure. Which in no case should lead to the erosion of these two schools. The position of our collegium is to preserve both schools as much as possible, thereby ensuring an alternative view of the development of aviation technology. But at the same time, it is necessary to optimize the administrative superstructure of these organizations and, accordingly, reduce costs. Designers must remain an unshakable link, and administrative staff must be optimized. That's how it will be right.
Doesn't it threaten the designers to move to the regions where the aircraft building enterprises are located?
Andrey Elchaninov: We believe that this is redundant. Moving a legal entity to a different address will not radically change the situation for the better.
Will they return to this question in a few years?
Andrey Yelchaninov: The development strategy of PJSC United Aircraft Corporation for the period up to 2035 has already been formed. It was discussed at the board of directors of the corporation and will soon be submitted to the board of directors of Rostec. In this edition, there is no question of moving constructors. In the summer, we will publicly present this strategy at a conference on the prospects for the development of the aircraft industry.
And finally, the last concern - will the glorious brands be retained? After the merger of the companies, will there not be a desire to come up with a new name for their products?
Andrey Yelchaninov: The Sukhoi and Mig brands should be preserved. The products that are born under these brands have prospects for their further existence. It is extremely short-sighted to neglect a history that has been taking shape for more than 60 years. It is not worth exchanging world famous brands for something new.
The Sukhoi and Mig brands must be preserved. To exchange world famous brands for something new is shortsighted
Here we can recall, by the way, about the reform of the helicopter industry. On the basis of the Mil Design Bureau and the Kamov Design Bureau, a single design bureau was formed, which is now transformed into the National Center for Helicopter Engineering. At the same time, no one says that their brands will be blurred under some other abbreviation.
Sukhoi, Mig, Ilyushin, Tupolev, and all other brands should have the same fate. Everyone should have their place in the sun and in the product line of the United Aircraft Corporation.
At what stage are the joint tests of the Su-57 fighter and the S-70 Okhotnik heavy attack drone at?
Andrey Elchaninov: The Su-57 aircraft, known as a promising front-line aviation complex, is in the second stage of joint state tests. This is the final part - the home stretch with an exit to the final result. It is gratifying that in 2020 deliveries of serial machines to the Russian Aerospace Forces have already begun. A total of 76 vehicles will be delivered.
The Su-57 is not only the most advanced fighter, the 5th generation complex, but also an extremely promising platform. Work on its development will, of course, continue.
Simultaneously with the transition of the Su-57 to the state of a mature aviation complex, Russian aircraft manufacturers issued the next advanced development - the heavy S-70 Okhotnik unmanned aerial vehicle. He is still going through certain stages of his creation and improvement. But it is already clear that the complex will also be at the cutting edge of technology. During its creation, the developments obtained during the development of the Su-57 are used. This is a natural design process. The best solutions will migrate to the C-70. The capabilities of artificial intelligence, which were actively practiced on the Su-57, will be used.
These aircraft and drones can interact not only with each other, but also in various types of battle formations. Unmanned aerial vehicles are capable of operating under the control of a pilot piloting an aviation complex. In the near future, it will be possible to control several Okhotnik drones from the cockpit of the Su-57. The function of target distribution between these aircraft is being worked out.
Group use of guided aircraft and unmanned aerial systems is not far off. And the first flights are proof of this. In the future, it is planned that, when used together, the Okhotnik drone under the control of a leading manned vehicle will solve any tasks for air and ground targets. In this connection, we see great prospects and a build-up of the combat potential of the Russian Aerospace Forces.
What are the prospects for the production of new drones in Russia? For what purposes do you see their application in Russia in the future?
Andrey Elchaninov: Unmanned aerial vehicles are one of the key areas for the development of the aviation industry, and there are serious developments here. We are by no means lagging behind global trends. We have our own technical solutions and our own products. They are currently being actively tested. And a number of such samples will be demonstrated this year at the International Aviation and Space Salon and at the Army-2021 forum.
We see where the world is going. What changes are being made to the rules for the use of airspace abroad. We analyze all this experience. And at the level of the collegium of the Military-Industrial Commission, we are interested in matching the interests of military and civilian unmanned potential. And to ensure the entry into the market of high-quality new products. In any niche - both heavy and light drones.
Some Russian companies, mostly private ones, have created high-quality unmanned systems, albeit mostly of a small class. Our power structures have already shown interest in them. The development of heavy attack drones - the largest and most complex systems - is being carried out by aviation firms all over the world. And here Russia is no exception. So, work on the creation of the above-mentioned strike complex "Okhotnik" is being carried out by "Sukhoi". It is planned to start delivering the Hunter to the troops in 2024.
As for the regulatory framework, I hope that within 21-22 years we will nevertheless remove all existing issues. And we will work out an approach that will allow realizing the possibility of unmanned systems access to the airspace of the Russian Federation.
Will Il-114-300 retain its unique flight characteristics after modernization? When can we expect the first orders for it?
Andrey Yelchaninov: The plane made its first flight last December. Quite long flight and certification tests are ahead. We expect the first flight of the aircraft this summer in a guise that meets the needs of the market. Il-114-300 is oriented primarily towards the domestic market. The aircraft has its own unique niche; it will be used on regional routes, including in the inaccessible regions of the Far North, the Far East and Siberia. Where air traffic is critical for the life of the population, its mobility, delivery of food and cargo. We are already seeing interest in it from regional airlines.
The aircraft can land on short and unpaved runways at airfields with poor technical equipment. And yet, unfortunately, this is not uncommon in our country. Equipped with modern equipment, it will be able to replace outdated An-24, Yak-40 aircraft and imported aircraft of a similar class in carrier fleets.
Further development of the IL-114-300 universal platform, including for the needs and tasks of special customers, is also possible. It is important that the aircraft is created from domestic components, entirely in Russian cooperation. We are not at all dependent on foreign suppliers.
Could this new aircraft be useful to the military?
Andrey Elchaninov: There is already interest from the military. It is due to the unique flight characteristics of this aircraft. This is the possibility of a long continuous stay in airspace - at least 8 hours. What is needed to conduct various types of reconnaissance, relay signals, surveillance.
Long-term stay in the air with minimum fuel consumption is a unique characteristic. It is also important that the Il-114-300 is a universal platform, on the basis of which it is possible to create aircraft of various classes: cargo, cargo-passenger, medical.
Government customers will make decisions on the purchase of this aircraft based on the results of its certification.
At what stage are the research work on the creation of a promising aviation complex for military transport aviation (PAK VTA). Has its appearance, tasks, dimensions already been determined?
Andrey Yelchaninov: During this year, the work on defining the appearance for the needs of the military will be completed. After that, it will move into a specific channel and will be implemented within the framework of the next GPV. Design bureaus and production sites within the United Aircraft Corporation have the necessary competencies in the creation of transport aircraft, including a significant technological backlog in the segment of super-heavy transport aircraft. Upon receiving an order for the development and production of a super-heavy aircraft, the industry will be able to fulfill it.
I want to note that when implementing such a large-scale project, it is necessary from the outset to provide for the possibility of using the aircraft for the needs of a variety of customers, including civilians, not being limited to the needs of the military only. Customers who are interested in the transportation of oversized cargo on super-heavy ramp vehicles may be interested in such an aircraft.
What is the future of the Armata tanks? Tests by the manufacturer, according to the press, are underway, but at the same time materials are published about the unwillingness of the military to acquire it due to its high cost.
Andrey Elchaninov:In 2022, the first prototypes of "Armata" combat vehicles will go to the troops for trial operation. This will make it possible to determine the forms of application of new samples, as well as to eliminate possible design and manufacturing flaws. Based on the results of these tests, the Ministry of Defense will make decisions on the number of vehicles to be purchased. I think this issue will be reflected in the new state armaments program.
Are there any plans to adjust the established indicators, taking into account the difficulties that have arisen at defense enterprises due to coronavirus restrictions?
Andrey Elchaninov: Not a single enterprise of the military-industrial complex stopped work during the pandemic. All the necessary sanitary measures were organized at the enterprises, the work schedule was optimized. This somewhat slowed down the rate of release to final products. But according to reports from the field, this situation did not radically affect the execution of the state defense order. At the state level, these circumstances were not recognized as force majeure.
At the same time, in order to financially stabilize in 2020, the budget allocations from the federal budget were redistributed to the reserve fund of the government of the Russian Federation. In particular, as a result of this redistribution, financing of the measures of the state program "Development of the Defense Industrial Complex", implemented within the framework of the state defense order, was reduced by 14 percent. At the same time, the tasks of the state defense order aimed at implementing the current state armament program were retained in full.
Under these conditions, the Russian government took measures aimed at ensuring timely contracting and achieving the highest possible level of advance payments for concluded and renewed contracts. These include the adoption of a decision on a one-time increase to 80 percent of advance payments for already concluded and newly concluded government contracts. And also about allowing government customers in 2020 to conclude government contracts at approximate prices without registering with the FAS Russia. This allowed us to significantly reduce the time spent on posting such tasks.
According to preliminary data, this approach allowed last year to achieve placement and financing targets for state defense orders even exceeding the level of 2019. So, last year this figure amounted to 98.6 percent of the planned value (in 2019 - 97.5 percent), while the volume of funds transferred by state customers to prime contractors amounted to 94.6 percent (in 2019 - 92, 5 percent).
Earlier, the President set the task of increasing the output of high-tech civilian and dual-use products by defense industry enterprises. Do you manage to complete the task? Is there something that hinders active diversification in the country? Give examples of defense enterprises and new "non-military" products that they have already started or are planning to start producing.
Andrey Elchaninov: In the context of an inevitable decrease in the state defense order by 2030, the transition of defense industry enterprises to the production of civilian products becomes a stabilizer for the production economy. Let me remind you that Russian President Vladimir Putin has set the task of diversifying 50 percent of the country's defense-industrial complex by 2030. At the end of 2020, the output of civilian products amounted to 25.1% - against the planned 17%. Against the background of a general decline in industry last year, the revenue of defense industry enterprises from the sale of civilian products increased by almost 100 billion rubles in 2020 - from 904 billion rubles to 1 trillion rubles.
To give examples, the Almaz-Antey concern produces medical equipment, as well as equipment for subsea hydrocarbon production and compression of natural combustible gases. In the structure of the production of high-tech civilian products of the military-industrial complex, the second-third place is steadily occupied by products for the needs of the fuel and energy complex. The first two positions are occupied by aviation equipment and rolling stock for railways.
The share of equipment for the fuel and energy complex in the structure of civilian production in the defense industry is within 10%. In the structure of the equipment of oil, gas and energy companies, since the 90s, imported equipment and tooling prevailed.
In the context of sanctions from a number of countries, import substitution in the fuel and energy complex and ensuring its technological independence comes to the fore. One of the key tasks is to increase the level of localization of oil and gas technologies and equipment in terms of valves, catalysts, drilling rigs, as well as equipment for the preparation, storage and processing of hydrocarbons, drilling and injection of wells, compressor and pumping equipment.
According to estimates, the volume of the Russian oil and gas equipment market is over 485 billion rubles. This is a very impressive figure for which defense industry enterprises are fighting, diversifying their production, range of products, and sales markets.
Do the authorities plan to support the enterprises of the military-industrial complex?
Andrey Elchaninov: In 2020, the Russian government, with the active participation of banks, cleared the loan portfolio of defense industry enterprises. 350 billion rubles of bad debts were written off through additional capitalization of assets, another 260 billion rubles were restructured at a preferential rate for a long period of more than 10 years.
According to preliminary estimates, enterprises will annually free up at least 50 billion rubles, which they previously used to pay interest to banks. Now they will be able to invest in development.
The possibilities of the federal budget for 2021 are limited. Attraction of extra-budgetary sources - from increasing the presence of the main bank PSB with a preferential rate, to fundamentally new mechanisms for the defense industry to raise funds from stock markets (the issue and circulation of so-called perpetual or perpetual bonds). The latter performed well in the midst of the 2020 crisis. They were actively used by Russian Railways to raise funds to cover the deficit in specific areas of the investment program.
We assess the potential volume of funds raised by defense industry enterprises using this instrument, based on the existing debt to EBITDA ratio of enterprises and holding structures, as well as the corresponding covenants in their development and investment programs.
On February 26, Deputy Prime Minister Yuri Borisov assigned to the military-industrial complex collegium the functions of distributing and communicating to the state customers of the State Arms Program the projected amounts of federal budget appropriations for equipping the Armed Forces, other military formations and bodies. How will this affect the further work of the military-industrial complex?
Andrey Elchaninov: We'll have to work harder. Within a month and a half, the board of the military-industrial complex should consider the forecast of volumes for equipment presented by the Ministry of Economic Development of Russia, divide it according to the customers of the GPV, assess the sufficiency of resource provision for each customer of the GPV, hold a meeting of the board of the military-industrial complex, prepare a draft report to the President of the Russian Federation It should contain a comprehensive assessment of the sufficiency of macroeconomic indicators for solving the tasks set for the Armed Forces of the Russian Federation, and proposals on the direction of the projected allocations for the development of weapons, military and special equipment.
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