24 Feb 2014 14:48

Rosatom to hand nuclear icebreaker contract to own design bureau - paper

MOSCOW. Feb 24 (Interfax) - State nuclear corporation Rosatom plans to hand the contract for the construction of 60-MW nuclear-powered icebreakers (LK-60) to one of its own design bureaus, national daily Kommersant reported on Monday, citing several sources.

Until now, LLC Baltiysky Zavod Shipbuilding, a division of state-owned United Shipbuilding Corporation (USC) that is already building a similar nuclear icebreaker for Rosatom, was considered to be the main contender for this 86-billion-ruble contract for two icebreakers.

The paper cited sources as saying that one of Rosatom's own units, such as Afrikantov Experimental Design Bureau for Mechanical Engineering (Afrikantov OKBM), which is developing and manufacturing RITM-200 reactors for the LK-60, might bid in the tender for the contract.

"Rosatom expects to save money given the budget sequester, offering a lower price than Baltiysky Zavod, as well as fully control expenditures," the paper quoted one source as saying. However, the second bidder "might be an attempt by Rosatom to force Baltiysky Zavod to lower the price," he added.

Furthermore, Afrikantov, once it gets the contract, might farm out construction to subcontractors.

In addition to Baltiysky Zavod, the most realistic contenders for this role are USC's Vyborg Shipyard and Finish joint venture Arctech Helsinki Shipyard. "Handing part of the work not related to the nuclear island to Finland is realistic. It is Finnish shipyards that built the Vaigach and Taimyr nuclear icebreakers," the paper quoted a source as saying.

Rosatom and Atomenergomash declined to comment.

"The idea of handing the contract to an intermediary who does not have shipbuilding competencies raises questions. According to our information, there are currently only two shipyards in Russia capable of building vessels and ships with nuclear reactors - Baltiysky Zavod and Sevmash. The division of the contract could create difficulties with implementation, increase the construction time and price," USC said.

"Against the backdrop of the infighting at USC, there are risks that the contract might not be carried out on time and its price will go up in the process," the paper quoted one source as saying.

Sources in the shipbuilding industry say the price of the LK-60 written into the budget is "almost at the level of a zero margin." USC confirmed this, remarking that the "price of 86 billion rubles was calculated with the Finance Ministry and approved by the government."

The paper said USC's concerns are understandable, since Baltiysky Zavod's financial recovery could be jeopardized if it does not win this contract.

The shipyards portfolio of firm orders now totals 65 billion rubles. "The contract for the two LK-60s is factored into the business plan. Without it, the shipyard will not survive at the current margin," one source said.