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Sergei Ivanov answered journalists’ questions following a meeting on developing national aircraft manufacturing industry

October 4, 2012, Ulyanovsk Region

Chief of Staff of the Presidential Executive Office Sergei Ivanov answered journalists’ questions following a meeting Vladimir Putin held in Ulyanovsk Region on including Russian-made civil and transport aircraft in the consolidated state order until 2020.

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Chief of Staff of the Presidential Executive office Sergei Ivanov: Let me begin by repeating the President’s words of congratulation to all of the designers, workers, and technicians involved in building this completely new Russian transport plane. The only thing that remains of the Soviet-model IL-76 that the whole world knew is the ‘76’ and the outward similarity of the plane’s body, although in actual fact the new 476’s body is 1.5 metres longer than the IL-76. Everything else is totally new, including the engine, chassis, and the glass cockpit – in other words, all the old cockpit instruments with their arrows have now been replaced by displays. The new plane is far more economical and has greater range and payload capacity. This is essentially a completely new plane. 

I am sure you already know the story behind the plane’s creation and the relocation of its production from Tashkent. I was in charge of this project from the very start in 2005, and so it made me personally very happy too, to see the plane in the air today. I’d had the chance to see inside the plane and the cockpit during earlier visits to Ulyanovsk, but psychologically, it’s something quite different when you actually see the plane in the air.

Regarding today’s meeting, first, the President gave strict instructions to put together a list of state procurement orders from state agencies other than the Defence Ministry. As you know, the Defence Ministry has already signed a contract worth almost 140 billion rubles [$4.5 billion]. Russia’s aircraft manufacturing sector has not seen such a contract in the last 20 years. This is the biggest contract in the sector’s history.

Now we are to put together the orders from other state agencies, given that this plane can be used in a very wide range of areas. It can be used in fire-fighting, for medical purposes, transporting paratroopers, and as a freight plane of course. The Emergencies Ministry, Interior Ministry, FSB, Presidential Executive Office, Transport Ministry and a number of other state agencies have therefore been given a month to draw up their orders, which will become part of the consolidated pool. As you heard at the meeting, we will also organise a credit line system that will make active use of leasing schemes, operating principally through our main leasing company, VEB Leasing.

The meeting also looked at big state contracts for other aircraft such as the TU-204SM, the TU-214, the An-148, and the Sukhoi SuperJet. Various state agencies, not only the law enforcement and security agencies, have a need for these planes, and the contracts will be a big help in organising series production of the new Russian aircraft.

What is important for Ulyanovsk is that the contract for 39 IL-476 planes alone will keep the plant running at near full capacity until 2018 at least. If we add the TU-204SM, which is also made here, the plant will certainly be running at full capacity for the first time since 1991, when the plant’s very future was left hanging in the balance after the Soviet Union collapsed.

Question: How many civilian aircraft in total will the state authorities buy from Russian aircraft manufacturers?

Sergei Ivanov: Around 100, not counting the Defence Ministry contract.

Question: What is the contract timeframe?

Sergei Ivanov: The timeframe is to 2018–2020.

Question: And the approximate cost?

Sergei Ivanov: You can calculate it. Of course, the bigger the order the lower the plane’s cost. Also, don’t forget that up to 60 percent of the money involved is not going to United Aircraft Corporation, but to the companies making the engines and other parts and avionics. Final assembly accounts for at most around 30 percent of a modern plane’s cost.

There is demand for the IL-476, as for its predecessor, the IL-76, not just in Russia but around the world. The IL-476 has a take-off weight of 210 tons, slightly more than the American S-17. I visited the American plant in Los Angeles and saw the production process there. They have a good plane and there is demand for it too, but let’s not forget that we also have the Ruslan, which can carry a much bigger payload than the S-17.

Thus, only two countries currently produce these heavy transport planes, and they are needed for all manner of missions, from carrying containers from Kabul to Ulyanovsk, delivering flowers to Moscow, or getting seafood from the Far East to Moscow. This is all done by freight plane. The IL-76 flies Norwegian salmon to Russia, if you didn’t know. In other words, this plane is the aviation industry’s global workhorse, it really is, and so there is huge demand for it.

Question: The approximately 100 planes you speak of, does this include not just the IL-476?

Sergei Ivanov: No, I’m talking about contracts for 100 IL-476 planes. Let’s not forget about military technical cooperation and ordinary exports too. China and India have been following the plane’s development attentively, for example, and are waiting for its arrival on the market.

Question: Russia expressed its willingness to establish a transit base for NATO freight supplies. Have the Americans begun using it yet?

Sergei Ivanov: Not yet. On the legal side everything is ready, but as we have already repeated a hundred times, this is not a military base but is a transit centre for non-lethal supplies. Our customs will keep close watch on everything and we will make good money on this venture. We have already talked about all this, but everything will start only once the withdrawal [of troops from Afghanistan] begins, and as far as I know, there is no withdrawal underway yet.

Question: In other words, there are no contracts yet.

Sergei Ivanov: Not yet, but the legal framework for them is already in place.

Question: One more point: you are actively involved in the anti-corruption campaign. What is your view on the State Duma deputies’ initiative to prohibit civil servants from owning property abroad or having foreign bank accounts? 

Sergei Ivanov: I have a firm stance on the question of foreign bank accounts and I think that civil servants should not be allowed to have accounts of any sort in foreign banks. The property question is somewhat more complicated because it’s one thing to own a Swiss chateau or British castle, and quite another to own an ordinary two-room flat in Bulgaria, say, in Varna, where it would cost five times less than a flat in Sochi. That’s one point. Property in the Crimea is another thing.

I am sure that a differentiated approach will be drawn up, and I heard that the deputies are taking just such an approach, realising that you cannot just impose an all-out ban on owning even a single square metre of property abroad, no matter where, no matter whether in Britain, Ukraine, or Belarus. These are all cases that require different approaches. Some civil servant might simply have inherited an old village house, and what should we do in this case?

I am therefore sure that the second reading will see some amendments made on the property question. As for foreign bank accounts, I personally think they should be clearly prohibited, but this will be for the Duma to decide.

Question: What about shares in foreign companies?

Sergei Ivanov: I think the same should apply – shares and bank accounts are pretty much one and the same thing – money.

Question: A question on the regional elections.

Sergei Ivanov: I think everything is going normally, the election campaign is underway and there are various candidates from various parties taking part.

The filters that have come in for a lot of criticism are a new aspect. Maybe they are a little too strict, but at the same time, I personally think some kind of filter is needed in gubernatorial elections because I just don’t really see how we can have an election in which 120–150 candidates are all running for governor. Maybe you understand how such a thing could work, but for all my big imagination I’m afraid I find it hard to conceive, and so it is possible that some kind of adjustments might be made in this area in the future.

Thank you very much.

October 4, 2012, Ulyanovsk Region