Topic: Oboronservis Case
BLAGOVESHCHENSK, January 26 (RIA Novosti) - The Russian forces should hand over maintenance and support services to suitably-experience commercial enterprises, and will consider buying equipment abroad if local suppliers fail to come up to scratch, Defense Minister Sergei Shoigu said on Saturday in an interview with the Rossiya TV channel.
Shoigu, appointed last November after his predeccesor Anatoly Serdyukov was tainted by a corruption scandal involving the ministry's Oboronservis defense ministry property management company, said a decision to hand over orders from Oboronservis to commercial plants and production companies was not a simple one, but life demanded it.
Oboronservis has been at the center of a massive corruption scandal since late last year, when several of its managers were arrested as part of an ongoing investigation into fraud at the company, which handles the Defense Ministry's property, including real estate, fuel depots and base facilities and engineering works.
Shoigu called for some servicing of defense equipment to be carried out in future by commercial enterprises instead.
"And now we are dicussing a major theme, which is the "life-cycle contract," from production and delivery into service to scrapping. This is a huge amount of work, so we must transfer some of the Defense Ministry's factories to companies and major industrial corporations which are engaged in scientific and design work and arms production for us," he said. "This was previously done by Oboronservis. I don't want to name specific companies, but I would like to say this to them; 'How are you making a profit - on the defense of the country? I understand that there should be profitability, a cut, but not many times over, but a percentage,'" he said.
The Russian Defense Ministry will also buy its hardware abroad, but only if it absolutely loses faith in the ability of Russian producers to fulfil major orders necessary to re-arm the forces, Shoigu said.
"However, we must save money. If we have to shop abroad, we will, but only in those circumstances were we lose all faith in our own industry," he said.
Buying equipment necessary for national defense is sometimes a faster procurement process, he stressed, but is not farsighted.
"It would be desirable if our manufacturers woke up a bit and presented sensible prices. As far as foreign equipment, I don't want to offend anyone, but we need to support our industry. But it must come up to scratch and meet requirements," he said.
Shoigu's comments come just days after the Defense Ministry decided to buy hundreds of Russian-made light armored vehicles for the army in preference to its Italian-made IVECO competitor which it had previously opted for. And on Thursday, a senior defense official, Military-Industrial Commission Deputy Head Ivan Kharchenko, described as “absurd” a previously-agreed deal to purchase two French-built Mistral assault ships for the Russian Navy, saying the deal had inflicted harm on the Russian shipbuilding industry.
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- ruypenalvaRussia should19:52, 26/01/2013Russia should privatize some state owned enterprises, and sign with them long term maintenance contracts.
- arsanlupinNot a bad idea - but not enough.23:01, 27/01/2013Russia should also encourage private firms – especially small businesses local to individual installations to form and/or grow to fill these needs. Instead of letting the new generation of oligarchs plunder the military for their personal corrupt gains, let the little people do the work. It’s a lot more likely the loss to corruption will go down this way.
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The current contract portfolio of Russian arms exporters is worth about $46 billion. Annual exports total $15 billion, and this will ensure uninterrupted deliveries for the next three years, even in the worst-case scenario. The list of the main buyers of Russian weapons is unlikely to change drastically.