Capacity utilization in shipbuilding "fairly high," orders for 700 more vessels in pipeline to 2035 - Russian Deputy Prime Minister

MOSCOW. Aug 19 (Interfax) - Russian shipyards are currently building about 300 vessels, and there are another 700 vessels planned for construction in the period to 2035, Deputy Prime Minister and Industry and Trade Minister Denis Manturov said on Thursday.

"In general, capacity utilization in the industry is currently fairly high. There are about 300 vessels and marine facilities at various stages of construction at 63 shipbuilding enterprises. Plus, there are more than another 700 vessels of various types in the requirements of state and private customers to 2035 collected by the Industry and Trade Ministry," Manturov said at a meeting with President Vladimir Putin on the development of the shipbuilding industry.

But in many cases these orders have no technical specifications or financial backing yet, so they are not firm, he said.

He said the government has instructed all relevant agencies to specify the parameters of orders taking into account planned cargo and passenger traffic. "This is necessary foremost in order to clearly calculate shipbuilding capacity, since this is a lengthy construction cycle and there are also cost increases in it," Manturov said.

As for contracts that are already being carried out, he said that redesigns will be needed in a number of cases because foreign equipment will have to be replaced.

"We are now forced to redesign many vessels, including ones being built. And just for fishing vessels such work will require additional expenditures of more than 2 billion rubles from all participants," Manturov said.

Shipbuilders are now reviewing projects to assess the cost of redesigns taking into account the replacement of foreign equipment with analogs, he said.

For new projects, customers will be offered a "standard selection of vessels for various applications with maximum use of domestic equipment," Manturov said. "Thus we will increase serial production, reduce the cost of the vessels themselves and, most importantly, mitigate the risks of supply disruptions," he said.

"We have identified critical items for some units, assemblies that need to be developed and put into serial production as soon as possible, including taking into account the Zvezda shipbuilding complex's large tonnage needs. Vladimir Vladimirovich, thank you for supporting the allocation of 7 billion rubles for this measure this year. This will not only go to the fishing industry for ship equipment, this is in total. As I said, for the requirements of all main areas the Finance Ministry promptly carried out your instruction. Another 15 billion rubles for the next two years have already been included in the draft three-year budget," Manturov said.