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Russian Tank Falls Victim to Intrigues

Russian Tank Falls Victim to Intrigues

12.05.2010 — Analysis

The Corporation "Uralvagonzavod" intends to feature the new T-95 tank at the Russian Expo Arms -2010 Exhibition. The plans can be thwarted by the RF Ministry of Defence whose representatives announced winding up R&D efforts in this field. Instead of the T-95 that had become obsolete before it saw the light, the military offer to focus on the further upgrading of the T-90 production model. Experts see such an approach, to say the least, as questionable. However, as the RusBusinessNews observer has found it out, the debates are nothing but squaring the circle, as the debts of Uralvagonzavod, in ruble terms, amount to dozens of billions and the production is hopelessly outdated.

The State Armaments Program for 2007-2015 sets out the plans for delivery of 630 upgraded tanks and 770 breakthrough tanks to the Armed Forces of Russia. The rearmament is scheduled to start in 2011. By this very time, OJSC "Ural Transport Engineering Design Bureau" (a member of OJSC "Research and Production Corporation "Uralvagonzavod") promised to bring in the fourth-generation main battle tank T-95 and an improved version of the T-90 with a new turret, gun and enhanced fire-control system.

In April 2010, it became clear that the program was going to fall short. Vladimir Popovkin, Deputy Minister of Defence, told journalists that it was decided to cease T-95 development, as over the twenty years spent on its design the tank became hopelessly outdated. The question about whether any funds will be allocated for development of a state-of the-art fighting vehicle remained unanswered. The representatives of the developer state that they have no funds for R&D.

Manufacturers have also missed the target to supply the army with upgraded tanks: the improved version of the T-90 will not be ready until late 2010. It means that at its best, Uralvagonzavod will be able to manufacture 630 tanks in six years - provided that all export contracts are cancelled. Export deliveries are unlikely to be discontinued, since there are countries that are willing to buy the Т-90. However, manufacturing capacities are insufficient to sustain tank deliveries both to the Russian Army and to foreign customers.

The decision to wind up the "project 195" (Т-95) came to the expert community out of the blue. Just one month before, Vladimir Goncharov, a representative of the RF Ministry of Defence, made a statement at the meeting of the Sverdlovsk Union of Defence Industries that theT-90 was a yesterday's vehicle; and not to be left empty-handed, Uralvagonzavod should without further delay go ahead with a design of a new generation tank. The impossibility to upgrade basic combat qualities of the military equipment developed in the 70s was noted by other top-rank officers of the Russian Army.

Alexander Khramchikhin, head of the Analytical Department of the Institute for Political and Military Analysis, assumes that the Т-95 could happen to be a victim of intrigues - big-business, rather than politics. The bottom line of these back-door maneuvers, however, is totally unclear, as the T-90 has undoubtedly had its day.

Andrei Frolov, a research associate of the Center for Analysis of Strategies and Technologies, suggests that General Popovkin might have meant: the T-95 project is not being shut down; it will be suspended until the development of a 1,500 hp engine and number of other components has been completed. The 1,000 hp engine used for the T-90 is obviously not powerful enough for the new tank. However, the expert thinks that even if the Deputy Minister of Defence meant exactly what he said, his statements should be perceived with great care: another general will come over, and the attitude may change.

According to A. Frolov, there is another problem: Russia is still unable to decide what kind of war it must be ready for. The expert reckons that local conflicts can be handled with the upgraded T-90; that is the reason for its stable demand in a number of Asian countries. The export potential of this tank has not been exhausted: Libya, Turkmenistan and a number of other countries show interest in it. Participation in a global modern warfare will require a fundamentally different approach to development of new weapons and equipment. The former policy - the one who has thicker armor and more powerful gun will be the winner - is no longer on the agenda. Without air defense being integrated in the battle management system, the most advanced tank turns into an easy mark for the sophisticated enemy. Therefore the industrialized countries put an emphasis on the systems that can protect fighting vehicles from homing missiles.

Russia cannot boast that it succeeded in computing and destroying detection and guidance systems of antitank weapons. Thus, it is not ready for a global warfare. However, the desire to join the ranks of highly developed countries exists - at least, to be on the world armament market. Insufficient funds for R&D, however, drive the Russian military to the bottleneck of continuous choice between preparation for a local or a global war. Lack of military strategy makes it extremely difficult to answer the question: what tank the Russian Army needs. It adds to the problems and troubled times Uralvagonzavod is going through.

The enterprise that used to manufacture up to 1,200 tanks a year in the Soviet Union times keeps living today mainly on civilian industry products. When the crisis broke out, the construction machinery manufactured at the factory encountered lack of market demand, and Russian Railways JSC set strict requirements to railcar quality. At the end of 2008, the factory delivered 284 gondola cars equipped with new trucks. In 2009, Russian Railways ordered 1.5 thousand gondola cars; however, according to the press service of Uralvagonzavod, the crises put off their purchases. Only 305 gondola cars were manufactured. The traditional rolling equipment was not selling well. Uralvagonzavod faced acute shortage of orders. In 2009, the company debt reached 66 billion rubles, making the company lose 30 million rubles a day to service the debt and accrued interest. In April 2010, as Oleg Sienko, General Director of Uralvagonzavod, states, the debt shrank to 26 billion rubles, but the problem with orders still exists - including orders for military products.

Sergei Perestoronin, head of the Rosoboronzakaz representative office in the Ural Region, said that within the first two years, Uralvagonzavod fulfilled almost all its obligations under the three-year contract for delivery of 189 tanks to the Russian Army scheduled for the 2008-2010 period. The new contract that is also most likely to be scheduled for three years has not yet been submitted to the representative office. Consequently, money has also not come, though the Russian government promised to transfer up to 80% of funds required to fulfill the state defense order in the first quarter of the year.

Andrei Frolov believes that the money, in one form or another, will come to Uralvagonzavod, and the factory will make 100-120 tanks in 2010. This quantity will not in any way change the situation in the Russian Army. Alexander Khramchikhin has no doubt that nobody is going to implement the State Armaments Program for 2007-2015; thus, it is absolutely impossible to say what kind of a state defense order Uralvagonzavod will receive.

The position of Uralvagonzavod became even fuzzier after the RF Ministry of Defence had required reducing the cost of weapons and military equipment by 15%. At the same time, steel-makers announced an overall average 20% increase in the prices for their products. Oleg Sienko told journalists that the factory would have to lay off the personnel to cut costs.

Today, the factory has to pay 8 billion rubles a year under its loan obligations; thus, implementation of investment projects has become extremely complicated. The Uralvagonzavod production facilities are totally outdated: even painting operations are done manually. At the moment, Uralvagonzavod "is grinding out" the installation of a new painting line and is replacing individual machine-tools where it is imperative. The General Director of the factory claims that the "band-aid" approach is not sufficient to remedy the situation: the entire production must be built on a new concept.

At present, the focus is shifted to projects for profound modernization and expansion of the existing metallurgical facilities. The green-field project to build facilities from the ground up is considered an option, as the poor quality casting results in sizeable expenses and lost markets for the factory. However, the problem is lack of money required for the project. The government money is slow-paced: 10 billion rubles promised by Russian Premier Vladimir Putin back in September 2009 arrived at the Uralvagonzavod account just recently.

Interestingly, but it was ill-timed financing of R&D that overextended the development of the new generation tank and made the T-95 no longer required.

Vladimir Terletsky

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