Defense Ministry, USC Agreed On Prices For Subs

02.11.2011 United Shipbuilding Corporation (USC) and Russian defense ministry have finally agreed on prices for nuclear-powered submarines (Project 885 Yasen and Project 955 Borei), reports RIA Novosti referring to a source in Ministry of Trade and Industry. The last non-concluded state defense contract in 2011 was signed on Nov 1 at the meeting headed by Russian vice premier Igor Sechin.

No details of the contract were specified. Earlier on, representatives of USC and defense ministry said that the parties had failed to tie a delivery contract for two Borei- and one Yasen-class subs due to price discords. In particular, Russian defense ministry blamed the corporation for unreasonable overpricing. As for USC, defense ministry demanded considerable cost reduction for submarines making their production unprofitable.

Deputy defense minister Alexander Sukhorukov said on Oct 11 that the reason of unsettled contract "is our deficient pricing system". "Also, there are obviously some defects in cooperation ties within USC, and lack of qualified negotiators", pointed out the official.

Russian defense minister Anatoly Serdiukov said early in Oct that out of federal RUR 581 bln, only RUR 20 bln was not placed. Apart from submarines, that money was meant for procurement of Yak-130 operational training aircrafts and S-400 air defense systems. According to Sukhorukov, due to protracted negotiations, it was decided to postpone procurement of aircraft and SAM systems to 2012.