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President of Russia Vladimir Putin: Good afternoon, colleagues,

This meeting of the Military-Industrial Commission takes place at the famous Saturn plant in Rybinsk. This enterprise is one of the leaders of the domestic gas turbine construction. For 100 years now, it has been supplying engines and units for military and civil aviation, and for the navy, and producing power units for the fuel and energy sector, thereby making a significant contribution to strengthening our defence capability, and expanding the industrial and technical potential of our country.

I would like to take this opportunity to once again thank all the Saturn employees for their good work and wish them success. A little later, I will return to what I mean when I say success.

There are a number of important issues on our agenda.

First, we will need to discuss progress in developing new weapons and equipment, primarily for the general purpose forces and intelligence and information support. Recent events have once again showed how much the modern armed forces need such weapons.

I would like to ask the defence industry representatives to report on the fulfilment of the Defence Ministry’s tactical and technical requirements for these systems and other promising types of weapons and equipment, what specific tasks have been assigned to the design bureaus and defence enterprises, when they will be fulfilled and how much it will cost for the budget.

I will add that while implementing the State Armaments Programme and state defence procurement, we have to account for one more important consideration. The global interest in Russian armaments is growing, and we see this. It is obvious not only through public political statements, but also through the number of contracts, both completed and those being implemented. This is also taking place due to the effective use of our armaments in real, combat conditions, including in the anti-terrorism operation in Syria. We cannot lose this opportunity to strengthen our positions on the global arms market.

At the same time, as regards the production of certain land-based armaments, organisations of the military-industrial complex are given a full load of tasks by the Defence Ministry. Accordingly, it is becoming more difficult to complete the orders under military-technical cooperation on schedule.

It is obvious that if we abandon foreign orders today then tomorrow we could lose prospective partners and withdraw from the market. In this regard, I ask to additionally consider measures to implement export deliveries of armaments for general purpose forces. At the same time, the Government has to more clearly coordinate the work of the Defence Ministry, the Federal Service for Military-Technical Cooperation, the Ministry of Industry and Trade and organisations of the military-industrial complex in order to promptly implement defence procurement orders.

The second important issue on today’s agenda is the implementation of import replacement programmes in the defence industry. This is an essential issue for our stable defence capacity and technological self-sufficiency. For these purposes, substantial resources are assigned and ambitious and comprehensive projects are being implemented.

I would like to get back to Saturn, which I mentioned in the beginning. Since 2014, work has been conducted here to organise the production of ship gas turbine engines for combat vessels. This will allow us to produce and service such engines on our own.

You know, we were buying such engines in Ukraine before 2014. Unfortunately, through no fault of our own, this cooperation came to an end, and even the possibility of such cooperation has vanished. We had to turn to import replacement. Frankly, this was beneficial to us from a technological standpoint, because in the time from December 2014 to the present, we created a virtually new area of research and a new manufacturing industry. Previously, this expertise did not exist in Russia.

I am pleased to note that this work has been completed ahead of schedule. We thought that we would have to move the warship construction schedule back a couple of years, but the delay will be slightly shorter, about 18 months.

We could have gone with various different scenarios, such as looking for replacement imports or creating other makeshift solutions. Instead, we decided to develop these industries in our country. Judging by the result, we did everything right, because not only did we acquire a new area of expertise, we also obtained innovative equipment, which is more advanced than what we used to import. Its efficiency is 10–15 percent higher, and its service life is longer. This is true of the ships of nearby and distant maritime zones.

Unfortunately, I reiterate, our cooperation with our partners has come to an end, as in the case with the aircraft engines. However, here, too, we have already built plants in St Petersburg, which are now operational and cover all our needs.

Under the right circumstances, which do not depend on us, we will be willing to resume cooperation in these areas with our partners. Importantly, we need proper conditions before doing so.

Experts are saying that, owing to the import replacement programme, Russian-made parts will account for 85 percent of the weapons and equipment made in our country in 2025. All of them will meet the Defence Ministry’s requirements.

And finally, one more issue on the agenda is the development of the Navy as a whole.

By the end of 2016, the share of modern weapons and equipment in the Navy was about 47 percent. At the same time, the total share of modern equipment and weapons in the Armed Forces as a whole is 58.3 percent.

It is clear that the Navy’s equipment has its own specificities. It requires a longer process and production cycles to manufacture. And I already spoke about the import replacement that was forced on us, which also slightly shifted our plans. Nevertheless, we must solve the problem: within the next three years, by 2020, the share of modern weapons and equipment both in the Army and Navy should rise to 70 percent. We have all the prerequisites for this, all the conditions. We will do it.

The main priorities of Navy development are strengthening naval strategic nuclear forces, equipping them with modern weapons, and synchronising the development of the supporting infrastructure.

By 2025, the Navy must have a balanced ship fleet capable of carrying out the full range of peacetime and wartime tasks in the near and far maritime zones, ensuring Russia’s naval presence in all strategically important regions of the World Ocean.

In this regard, special responsibility falls on the defence industries, which, under the state programme for Military-Industrial Complex Development, will produce ships and supply vessels and equip them with modern weapons and control and communications equipment. I am sure that both the Defence Ministry and representatives of the military-industrial complex clearly understand the scope of the tasks set and will adequately address them.

Let's get down to work.

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