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President of Russia Vladimir Putin: Good afternoon, colleagues.

Today, we will discuss domestic shipbuilding. I suggest that we review performance under defence procurement orders in this sector, as well as long-term, system-wide objectives for our fleet and the shipbuilding industry.

As you know, the Basic Principles of State Naval Policy until 2030 set forth a series of clear-cut indicators and objectives, in particular, to engage in comprehensive efforts to develop the Russian Navy. This includes the development of ships, aviation and coastal components, infrastructure at naval stations, and reinforcing the Navy’s positions in the World Ocean’s strategic locations. Additionally, we aim to make significant advancements in terms of its combat capabilities.

There has been substantial progress towards these objectives over the past years, with new ships joining the fleet, the deployment of new types of weapons, as well as hardware restoration projects and thorough upgrades.

What kind of momentum are we talking about? In 2022, domestic shipbuilding companies delivered 24 new ships to the Defence Ministry, and went on to supply 33 in 2023. They are expected to deliver over 40 ships and vessels in 2024.

What I wanted to highlight in this regard is that the world has been experiencing growing geopolitical tension, while the ruling elites in several countries have been regularly threatening Russia and even taking concrete steps to make these threats a reality. Of course, we must be extremely diligent and responsive in dealing with these developments by calculating all possible risks and responding accordingly, which includes strengthening our Armed Forces and the Navy.

The mission to improve the fleet’s combat capabilities calls for paying special attention to introducing remote threat detection systems, including UAVs. This refers not only to using air defence systems for controlling the air space, but also improving above-water and underwater surveillance capabilities in order to counter the enemy’s sea-going autonomous systems.

We must defend our fleet, Navy bases and the fleet’s operating sites from possible peripheral attacks, while also developing the fleet’s air reconnaissance capabilities and expanding our electronic reconnaissance and warfare assets.

We must also assess the state and requirements of naval aviation and coastal missile forces and artillery. Today, we will talk about equipping our warships with additional weapons, including light and automatic machine gun stations and drone crews.

Based on combat experience, such systems are being produced at our enterprises, including big companies and small private designers and manufacturers.

I propose reviewing our shipbuilding plans once again today to specify the key operating principles of the customers and all parties involved in building and equipping our ships.

Here is what I would like to emphasise before we proceed to the agenda.

Shipbuilding is a complex, high-tech sector that operates on plans spanning ten, twenty or more years. It is crucial for us to consider these long-term planning timeframes when configuring state procurement, until at least the middle of the century. This will not only allow us to carefully consider and create conditions for the batch manufacturing of the existing types of ships but also to guarantee a transition to the next generation of naval equipment with better technical and tactical characteristics.

These are the tasks facing our Army and Navy, and it is on fulfilling them that we must focus our financial and institutional resources and scientific potential.

I would like to note that the manufacturing of ships of new designs should be preceded by R&D in the fields of equipment, instruments, components and armaments. Moreover, this should be done within interagency comprehensive targeted programmes. This will allow us to seriously accelerate the design and manufacturing of the first-of-the-class ships. I believe that reducing the number of ship types will seriously cut construction costs.

The attainment of this goal should be accelerated by the digitalisation of designing and digitisation of design and technical documents, with protected data transfer between design bureaus and shipyards, as well as between all sides involved in this complicated process.

Next, contracts for building warships should not exceed the shipyards’ capability, and the volume and pace of state funding should take into account the specifics of cooperation in shipbuilding, the length of production cycles, and the companies’ investment in expansion and upgrade based on modern technology, as well as the training of personnel.

I would like to point out that this does not only concern the companies where state orders are placed but also their suppliers and subcontractors in a variety of industries, including steelmaking, engineering and instrument making, the design and production of weapons, communication and navigation systems, software, new materials and the like. Maintaining this cooperation is a vital part of our common work.

Today, many manufacturers of components such as steam turbine plants, electrical products and radio electronic equipment, diesel engines and power units, are operating at full capacity. To prevent supply shortages and avoid delays in commissioning ships, it will be necessary to expedite the modernisation of facilities and to increase the production of equipment and components.

We have taken certain measures and issued instructions to this effect. Today we will discuss progress and any additional decisions that are required.

I would like to emphasise that the most important task for long-term development of the shipbuilding industry is attracting qualified personnel to design bureaus, shipyards and docks – and everywhere in the country. It is necessary to create genuinely attractive and competitive working conditions, including decent wages for workers, engineers, maintenance staff and managers.

It is important to provide them with professional development opportunities and to launch social programmes to support professionals and their families. This is a common objective for the state, companies in the industry and our education system.

Right now, shipbuilders and corporations are objectively boosting their investment in strengthening the workforce potential and attracting and training specialists. It is very important to include these funds in the contract costs. I would like to hear specific proposals on this matter.

Overall, I suggest that today, we analyse approaches to pricing in shipbuilding based on the current situation in the industry and its prospective goals.

I want to stress once again: it is of principal importance that contract conditions be strictly fulfilled, our shipbuilders’ investment programmes be implemented, and operations in the industry be economically effective and cost-efficient.

As concerns wages, inspections by the prosecutor’s office show that the wages are still rather modest.

Let’s begin this meeting with the long-term development concept for the Russian Navy and how the Defence Ministry sees it. This vision will serve as the base, the foundation that will support both short-term and long-term planning and determine the specific tasks for companies, design bureaus and scientists.

Certainly, the concept I mentioned must be based on the understanding of and integrated solutions for the tactical deployment of the Navy. Therefore, the concept must also be developed for the long term.

Let’s begin. I give the floor to Commander-in-Chief of the Russian Navy Alexander Moiseyev.

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