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115 Enterprises of "Defensive Industry" Will Be Sold by Auction This Year

115 Enterprises of "Defensive Industry" Will Be Sold by Auction This Year
24.01.2007

According to the program of privatization in current year 115 enterprises of a Military-Industrial Complex more than half from which belong to the Ministry of Defence will be put up for auction.

In particular, military department sells 86 central design offices, 57-th design institute, 21st central design-technological bureau (everything are – in Moscow), the scientific and technical centre "Vitayz" (Bryansk), four factories on repair of military-technical property and so forth. Amenity complexes, warehouses, printing works and hotels are put up for auction.

It is planned to privatize in 2007 58 joint-stock companies entering into Military-Industrial Complex of the country. There are among them special design-engineering bureau of radio equipment (Kaluga), the Scientific Research Institute of Mechanical Engineering (Smolensk), specialized design office "Spurt" (Moscow), Research-and-production enterprise "Pribor" (Omsk), Special design-engineering bureau on relay technique (Great Novgorod), factory of semi-conductor instruments (Ioshkar-Ola), design bureau “Gorisont” (Nizhny Novgorod),  industrial association “Aviapromnaladka” (Moscow).


From editorial staff: Usually privatization of enterprises, especially of Military-Industrial Complex are carried out by the state for three reasons:

- urgent need to fill up the budget;

- in a situation when private management is obviously more effective, than the state, or the state is not capable to provide necessary investments into development;

- if an enterprise has lost the value for Military-industrial Complex and its reprofiling is required.

Certainly, at carrying out of privatization of objects of Military-industrial Complex a ritual phrase is being pronounced that "to sale will be offered enterprises which are not included into the list of strategic and not providing performance of the state functions of the Russian Federation ". However, deputies of profile committee of the State Duma who supervises industrial sector under Martin Shakkum in overwhelming majority are not capable to estimate independently an extend to which objects offered for privatization are important for functioning of Military-industrial Complex as self-sufficient system. And not so numerous experts are actually discharged of decision-making - the Committee simply relies on the materials given by the government. As a result today our country cannot produce Intercontinental Ballistic Missiles without application of some accessories of foreign production and avionics even on strategic bombers, not speaking about fighter aviation, are French or Israeli. It’s senseless today to speak about defensive sufficiency at existing deficiency of "closing" technologies.

The process of privatization is in a basis of everything during which closed technological chains are breaking off and system of MIC becomes opened.

If to return to the objective bases for privatization it is clear that the budget obviously needs additional means, while change of pattern of ownership cannot affect in any way the work of the listed enterprises by way of change of an investment climate - all these enterprises work practically 100 percent on state order. What “effective management” can be meant if a factory is engaged, for example, in repair works of military equipment?

The third criterion remains - partial or full reprofiling which opportunity is just being put by "ritual" phrase that privatized enterprises are not included in the list of strategic, etc. That is the factory from repair of military technique can be switched to pouring of beer or reception of empties.

Actually, Military-Industrial Complex has already lost many enterprises including the unique ones where today markets are situated, "snow queens" and other obviously not defensive objects. Military-Industrial Complex of the country ceased to be a uniform complex, it turned into a group of isolated enough enterprises competing with each other for the state order. Far not always the state order is placed in the best for the end result way. Corruptional mechanisms very often become the main criterion of a choice.

We have just observed that it was required to de-privatize a number of its future components which were transferred into private hands under a pretext that "they had not been included into the list of strategic” at creation of the Incorporated aviabuilding corporation.

An example from the past - "Norilsk Nickel"? Whether Nornickel, being a world monopolist on manufacture of platinoids and providing domestic industries the lion's share of copper and nickel, is not the strategic enterprise? “Nornickel” which salary of manager general in Soviet times was higher than the one of General Secretary of the CPSU Central Committee?

Certainly, among defensive enterprises offered this year for privatization there are no "nornickels" - all "tasty" enterprises have been already privatized earlier. Things which takes place now remind more snatching. Or actions of hunters for valuable metals, when for the sake of several kgs of nonferrous metals the most valuable equipment are being made ducks and drakes of...

Anatoly Baranov, chief editor of FORUM.msk
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