All defense contracts should be concluded this week

Russian Prime Minister Vladimir Putin expressed hope on Monday that all contracts under 2011 state defense order will be concluded by the end of this week.

“I hope that by the end of this week all these contracts, including in shipbuilding, the missile industry and aircraft industry, will be concluded,” Putin said at a meeting of United Russia activists.

“We must guarantee the quantity and the quality of armaments along with the profitability of [defense industry] companies,” he said. “At least 15% profitability to ensure the availability of funds for development and payment of sufficient salaries for workers.”

Putin also insisted that all advanced payments for defense orders in 2012 must be delivered to manufacturers by March next year.

In 2010, Russia launched an ambitious military modernization program, allocating 20 trillion rubles (about $730 billion) to upgrade the country’s armaments over the next 10 years.

However, the program suffered a number of drawbacks due to a price war between the Defense Ministry and Russian manufacturers of military equipment.

The situation with defense contracts for 2011 came to spotlight in May after President Dmitry Medvedev openly criticized Defense Ministry officials for stalling the process. The military complained over “skyrocketing prices” on armaments.

Putin ordered on July 26 to sign all defense contracts for 2011 before August 31.

Russian Defense Minister Anatoly Serdyukov said on September 1 his ministry had signed the bulk of the contracts except the ones with the United Shipbuilding Corporation. These contracts include the construction of the Borey and the Yasen class nuclear submarines.

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