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Taking part in the meeting were Deputy Prime Minister Dmitry Rogozin, Defence Minister Sergei Shoigu, Industry and Trade Minister Denis Manturov, Chief of the General Staff of Russia’s Armed Forces Valery Gerasimov, Commander of the Russian Navy Viktor Chirkov, President of United Shipbuilding Corporation Vladimir Shmakov, and defence industry company heads.

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President of Russia Vladimir Putin: Good afternoon, colleagues,

We held a meeting in Severodvinsk a year ago to examine implementation of the naval defence procurement programme.

Today we will examine the situation with the programme this year, analyse the results so far and the problems that require our particular attention, and discuss naval development in general.

We are working steadily towards our goal of substantially modernising and re-equipping the Navy’s submarine and surface units. This will enable the Navy to carry out all of its various missions, including to maintain strategic parity, counter potential threats coming from sea, and defend transport corridors and merchant shipping.

Last year, the defence procurement programme’s results included commissioning of the Borei-class nuclear cruiser Yury Dolgoruky, and modernisation of the ballistic missile submarines Novomoskovsk and Verkhoturye. A total of 748 vessels underwent repair and maintenance works.

”We are working steadily towards our goal of substantially modernising and re-equipping the Navy’s submarine and surface units. This will enable the Navy to carry out all of its various missions, including to maintain strategic parity, counter potential threats coming from sea, and defend transport corridors and merchant shipping.“

At the same time, there have been delays, unfortunately, in testing a range of surface vessels and submarines and the arms they need. I will address this issue in more detail. What I want to stress is that we must step up the work on these projects so as to have the arms and equipment ready for the state clients in the shortest time possible. 

Regarding the 2013 defence procurement programme, more than 85 percent of the orders have been placed now. This is not a bad result. The contracts have been signed. I won’t give the figures, but note simply that this year the Navy will receive the modern new strategic missile submarines Alexander Nevsky and Vladimir Monomakh and the nuclear attack submarine Severodvinsk. This is all new generation hardware, and for it to operate effectively, we need to develop and modernise the accompanying coastal infrastructure too. I want to hear today on how this work is going, where the capital construction plans have got to at least, we have yet to actually see them it seems. 

Let me briefly outline a few other problems that we need to settle. Costs are still one of the most sensitive issues. We all know this well and keep coming back to this subject. The situation has improved a bit compared to last year and we are starting to see some progress. But the matter of the costs involved in building these surface vessels and submarines is not closed for good yet.

I stress the point that price policy is a fundamental matter. I want to hear your views today on work in this area too, your assessment, and the prospects for final decisions on this matter.

I know that there were proposals to make adjustments to the current defence procurement programme as regards funding for vessels to be commissioned before 2015, with the idea that funding for vessels to be commissioned after 2015 would be set in accordance with the new defence procurement programme for the period through to 2025. This is a possibility. Let’s examine the situation. The main thing is to make sure everything goes smoothly. We need to organise the work so as to ensure that the producers’ capabilities match the allocated funding. We cannot allow a situation where we allocate funds that then just sit in the accounts, while we end up waiting for the ships to appear. 

Delays in delivering new vessels and arms to the Navy are another big problem. There are various reasons for this situation, but the main problems here are ineffective coordination between the state bodies placing the orders and the defence industry organisations, disruptions in deliveries of components produced by partner companies in related sectors, lack of proper cooperation between the producers and the design bureaus, and, I’m forced to say frankly, sometimes poor quality of the goods supplied.

”Our Navy’s combat capability is the guarantee of our country’s security and the reliable protection of our national interests. We must maintain this combat capability at the highest level.“

In the case of construction of one series-production vessel under one of the projects, there were 132 cases of equipment breakdowns, for example. This is absolutely unacceptable. I expect to hear concrete proposals on improving the situation from the relevant ministries and agencies.

Furthermore, we still have not organised clear coordination between the people building the ships and the people building the modern arms they will carry. The arms suppliers are running late in a number of cases.

I stress again that it is essential to work in comprehensive fashion and make sure the design tests of new arms and equipment are all completed in time for the vessels’ commissioning. This is especially important for the main projects. We will discuss this issue too, during today’s meeting and I want to hear your proposals here. These are the main points I want us to examine today.

Of course, we will also discuss state support measures for shipbuilding companies taking part in performing defence procurement contracts, and measures for further developing Russia’s Navy.

Our Navy’s combat capability is the guarantee of our country’s security and the reliable protection of our national interests. We must maintain this combat capability at the highest level.

Let’s start work.

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