Russia’s Rostec Corp. to Invest $100M in New Aircraft Factory

NIZHNY NOVGOROD, October 19 (RIA Novosti) – Russian state-owned high tech corporation Rostec will invest $100 million in an aircraft building factory in the Ulyanovsk Region, the local administration said Friday.

The factory, construction of which will begin next year, will be located in a special economic zone, the regional government said in a statement.

About half of the $100 million will be spent on infrastructure development and the other half will be spent on equipment and personnel training, the statement said.

A tender for the project is expected to be announced within the next few days.

Ulyanovsk Governor Sergei Morozov said the project will make the region more attractive to investors and create new jobs.

Rostec and Canadian aerospace company Bombardier announced in late August they had signed a letter of intent for the sale of 50 Q400 NextGen turboprop airliners for use by Russian regional airlines. The two companies also signed a memorandum of understanding for establishing a final assembly line for the Q400 NextGen in the Ulyanovsk region with a capacity of 24 aircraft a year.

If a definitive agreement is reached, a firm-order contract for 100 Q400 NextGen aircraft would be valued at around $3.39 billion, the Wall Street Journal said.

Rostec has yet to decide which manufacturer’s aircraft – Bombardier, or its European rival ATR – will be assembled there, the region’s Strategic Development and Innovation Minister Alexander Smekalin said Friday, adding he hoped first aircraft were to be built within the next two or three years.

In late June, the American defense contractor AAR Corp. announced it had signed a letter of intent for a tentative two-phase commercial aviation project that would, if successful, include an aircraft parts distribution and logistics center and a commercial aircraft maintenance facility to be based in the southern Volga city. AAR’s plans are for the first phase to open in mid-2014 and the second in 2015.

Another manufacturer, Russia’s Vityaz Avia, also plans to build aircraft in Ulyanovsk’s special economic zone starting next year. Vityaz, in partnership with Canada’s Viking Air, wants to build up to 24 DHC Twin Otter 400 19-seat turboprops for use by local Russian air transport operators, Vedomosti reported in August.

Ulyanovsk is an important Russian aviation center. The Aviastar-SP factory there manufactures the An-124 Ruslan super-heavy cargo aircraft, Il-76MD-90A transport and the Tu-204 airliner.

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