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Putin and Rogozin Fail to Calculate the Price of the Submarine

Putin and Rogozin Fail to Calculate the Price of the Submarine
21.11.2012

President Putin charged the Deputy Prime Minister Rogozin who is responsible for military – industrial complex together with economic block of the government to finish the work on formation of the general principles of pricing at making state defense order.

"It is necessary to define general pricing principles", - the head of the state said at a meeting with the Deputy Prime Minister. "There are a lot of conversations, a lot of problems connected with it, you have already suffered from it too, but we have no uniform principles, - Putin noticed. – Go the whole hog together with economic block of the government; it needs to be finished".

In his turn, Rogozin reminded Putin that it was Putin who in due time appointed the price for constructions of nuclear rocket carriers. "Unfortunately, for now situation is in manual control and sometimes it happens so that you – the heads of the state – should make decisions about handling of such difficult mechanisms as, say, nuclear submarines", - the Deputy Prime Minister recollected.

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From editorial board: When two persons, both with very vague understanding of the question they are going to regulate, make decisions, it turns out "as always".

I observed approximately the same picture, when I, still young journalist, was present at the meetings of the committee on pricing policy in the Soviet period: we don't know what makes a price of shoes, but they should cost no more than 10 rubles. Moscow in the Soviet period produced one pair of shoes per 1 inhabitant of the capital in 10 days and it was possible to hold low price at the expense of mass production and rather high efficiency of work (we will delicately hold back the quality). If the capital would have produced one pair of shoes in 10 years, then it would be difficult to count up labor productivity.

Approximately the same but at different technological and cooperation level happens now with construction of submarines as well as with other hi-tech products of defensive production. Let's say, complex of productions involved in construction of the submarine was planned for certain volume of produced goods. When the volumes fell in 10-20 times, it became impossible to calculate the price of the construction of individual items of equipment – well, it can cost as much as you like. Individual item is unique by definition and the submarine or front fighter let out in one copy could cost as much as lunar capsule or the lander to Mars. Or, say, as "Superjet"...

For example, in the Soviet period a factory “Znamya Tryda" could produce up to 150 fighters MiG-29 annually and the price of the serial fighter was quite countable. Though when the same plant passed to production of individual items, though not every year, the price of production start increasing in progression - after all maintenance of the infrastructure proposed for mass production didn't disappear in any way.

Certainly, the situation would be rescued by big war – mass losses should correspond to large-lot production of military equipment. Though there’s no war, at least in traditional meaning of the word. External consumer also reduces his purchases - after all he also is not in war and also doesn’t have a lot of money. To calculate production and design base which, on the one hand, would provide minimum requirements of the army and fleet for updating of military equipment and, on the other hand, would have mobilization reserve for building of mass production in case of war is impossible. Other brains and other stuff are necessary for it - reconfiguration of defense industry is a task not for serdyukov’s "excellent generals” as well as not for diplomat Rogozin and dictator Putin.

Anatoly Baranov, editor-in-chief of FORUM.msk

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