Russian Quality Woes

the spy network reports:

Russia cannot meet arms contracts - state company
Reuters News 07/17/2008
Author: Alexander Gelogayev
(C) Reuters Limited 2008.

MOSCOW, July 17 (Reuters) - Russia's defence industry lacks the resources to meet all its arms export contracts, the head of Rostekhnologii state corporation said on Thursday.

"The Russian industry cannot meet some of the signed contracts," the corporation's press office quoted Sergei Chemezov as saying at the Farnborough air show in Britain.

"A growth in the number of government orders and export contracts has overloaded defence enterprises whose productivity has not changed," he added.

The arms trade, which brings Russia annually around $7 billion, is a major source of income for the country and a source of national pride.

In the first decade after the collapse of the Soviet Union, when the Russian armed forces were struggling to survive on austere budgets, export contracts helped the defence sector.

However, a chronic lack of funds for modernisation and problems with retaining qualified staff have badly hit the defence industry over the years.

The problems became more acute after an economic boom allowed the government to place new orders for the armed forces.

In 2007, Russia said it would have to delay the modernisation of aircaft carrier Admiral Gorshkov purchased by India and Algeria after they refused to take up the MiG-29 fighters they ordered because of their poor quality.

Rostekhnologii, a corporation which groups most of the state-owned defence enterprises except for those engaged in aviation and shipbuilding, was created to channel state resources into modernising the industry.

But Chemezov has been forced to fight criticism at home after some officials accused him of grabbing too much money.