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Putin forbids placing orders for marine machinery and ships abroad

May 22, 2013, 11:54 UTC+3
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In the evening on May 21, Russian President Vladimir Putin held a meeting devoted to the prospects of the United Shipbuilding Corporation (OSK) at the Sochi presidential residence Bocharov Ruchey. The president forbade placing orders for marine machinery abroad. At the same meeting the president appointed Vladimir Shmakov as a new OSK head. Shmakov earlier held the post of the first deputy general director of Uralvagonzavod.

“Shmakov has a major experience of work at the top posts in the defence industry and metallurgy. I hope that he will be able to use all his skills efficiently,” Putin said at the beginning of the meeting.

However, along with the new post Shmakov received immediately many instructions with tough deadlines of fulfilment, the Komsomolskaya Pravda daily reported. “We concentrated in OSK serious resources: financial, industrial and intellectual,” the president stated. “However, the problems still remain with the deadlines and quality of the fulfilment of the orders, including defence orders,” the president said. A higher efficiency is expected from OSK in civilian shipbuilding. “The production of icebreakers, drilling and producing platforms is strategically important for our country. The build-up of Russian presence in the Arctic and other districts of the world ocean, the development of the marine resources directly depend from this,” Putin said.

The domestic shipyards can make competitive products, the president said with confidence. “I find it inadmissible, when the orders for marine machinery, civilian ships, which can be produced in Russia, are placed at the foreign shipyards without proper grounds,” Putin said with indignation.

“We understand perfectly that we traditionally manufactured some products abroad,” the Rossiiskaya Gazeta quoted Vladimir Putin as saying. But it was in the times of the Soviet Union and Eastern Europe. Now the annual order portfolio is five billion dollars, and 80% of needs of the companies are contracted abroad, Putin noted, reiterating that the priority should be given to domestic producers. “This is the unwritten law for all countries,” he noted. Moreover, these orders are a good stimulus for the creation of highly paid jobs and the development of innovations.

The stake on the state-run corporations and the state-owned companies was made not from the good life, senior scientific fellow of the Institute of National Economic Forecasting at the Russian Academy of Sciences Yakov Dubenetsky said. The shipbuilding, the aviation industry and other industries have almost lost the Soviet potential. In fact, no strong entities united to be stronger, but weak entities united to survive. The scientist puts in question the expediency of this tendency. “In the conditions of the market economy we began to unite and monopolize everything. Finally, the diversity of the design schools, which worked successfully in the past, actually competing with each other, for instance, in the aviation industry, was lost,” Dubenetsky noted.

Commercial director of the electronic trading platform AKD Kirill Polyakov supports another point of view. He calls to assess the state corporations not only in terms of the structure of the authorized capital, but rather in terms of the efficiency of management and production. “It can hardly be said that the private companies definitely work better than the state-run companies and vice versa. For instance, the Rosatom state corporation was on the top of a recent rating over the quality of management over the purchasing activities. The efficiency and competiveness of each enterprise should be estimated in terms of the financial results of work and the dynamics of development. Meanwhile, the state corporations have more opportunities to attract the funds and overcome the force majeure situations thanks to the support of the stockholders,” Polyakov contemplates.

Frequently the investment projects of the state companies are implemented with the ‘speculative’ goals for the resale of assets or receiving the kickbacks. “This considerably reduces the general competiveness and increases the pay-back terms of the projects,” Director General of the oldest Russian freight forwarding firm Sovtransavtoekspeditsia Leonid Shlyapnikov believes.

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