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High costs of defense industry products force revision of Russia’s armaments program

August 14, 2014, 12:51 UTC+3 ZHUKOVSKY
Deputy chief of the government’s military-industrial commission Oleg Bochkaryov says the Russian defense industry was in the final phase of consolidating its enterprises
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Military exhibition Oboronexpo-2014 in Zhukovsky outside Moscow, August 13

Military exhibition Oboronexpo-2014 in Zhukovsky outside Moscow, August 13

© EPA/YURI KOCHETKOV

ZHUKOVSKY, August 14. /ITAR-TASS/. High costs of defense industry products force a revision of the state program for armaments, the deputy chief of the government’s military-industrial commission Oleg Bochkaryov told the media.

“We have serious problems with high costs of defense industry products. The armaments program has to be revised,” he said on Thursday. “The costs are above the target figures that were originally identified for re-equipping our armed forces.”

Bochkaryov said the defense industry should work hard to cut costs and optimize management. He sees competition as a crucial factor for success in slashing the costs of armaments.

“The competition-related task remains unaddressed. We created integrated structures and now we have a serious problem with the emergence of monopolists,” Bochkaryov added.

He pointed to the fact that the Russian defense industry was in the final phase of consolidating its enterprises.

“More than 60 integrated structures have been created. This process will be completed in 18 months’ time, or two years, or three, at the most,” Bochkaryov said.

He acknowledged that the process of consolidation was important and positive, but at the same time stressed the idea that internal competition should be promoted for the sake of slashing production costs. The military-industrial commission will consider any constructive proposals from manufacturers on the matter.

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