The Defense Ministry has failed to meet this year’s state weapons order, despite having been given three deadline extensions by the president and prime minister.
The order is the most expensive in modern Russian history. The country allocated a whopping 750 billion rubles ($24 billion) to radically upgrade its defense system by 2020.
The immense sum notwithstanding, the ministry was hardly quick in meeting the deadlines. Officials did not manage to timely sign contracts with corporations and institutions that are expected to fulfill the ambitious order for producing new weapons.
Defense Minister Anatoly Serdyukov, though, claimed there is only one contract pending, one with the United Shipbuilding Corporation.
For his part, the head of the United Shipbuilding Corporation stated that the situation with the state order is the worst in the last 30 years. Contracts have not been signed, he said, and the money has still not arrived. Businesses have been spending their own money on production, which has now run out, making it impossible to finish on time.
The United Aircraft Corporation and the Moscow Institute of Thermal Technology also have pending contracts. Both institutes play a major role in the military’s modernization plan, as they are expected to build strategic missiles and aircraft carriers.
The Defense Ministry insists that the companies inflated the prices, which has resulted in their contracts not yet being signed.
Both President Dmitry Medvedev and Prime Minister Vladimir Putin expressed utter dissatisfaction with the Defense Ministry’s record. A state commission has been created to look into the issue and rule who is to blame for the delays. Putin said that the system of state defense orders should be radically changed, as it breeds corruption.