Modern Day Weapons for the Armed Forces Postponed to “the Next Day” Again

On New Year’s Eve, all citizens wanted to believe in wonders. Petro Poroshenko was one of those people who surprised us.  In his speech to the nation, he summed up the results saying, “We have strengthened our defence capacity … The main task, of course, I believe  …  is to enhance our defence.”
However, “improvement” does not mean just another batch of refurbished and repainted tanks. In order to strengthen the national defence, we need to complete a large-scale rearmament of the army and start to manufacture modern weapons  using the domestic military-industrial complex.

However, once again, Ukraine has lost another year which was so smoothly described by the President only one minute before the clock chimed twelve.

Just last year, in 2016, a  five year program named The State program of reforming and developing the DefenceIndustrial Complex for the period  until 2020” was up for approval.
The main goal of this program, in general, is to improve the capacity of totally ruined military defence enterprises and identify new types of weapons our defence industry is able to develop and manufacture for the army  as well as the financial investments these capacities require. However, the program was not approved.

Officials, responsible for enhancing the defence and, primarily, persons close to Poroshenko, failed to implement decisions approved by the National Security Council and the Cabinet. So, front line military personnel will have to wait for new weapons at least for one year more.

Ukrayinska Pravda (UP) collected all necessary materials about this program for several months. This process was complicated due to the majority of documents  bearing a security marking.

All officials refer to this security classification as trying to hide some information from the public.

Nevertheless, materials obtained and information available to the public allow us not only to understand pitfalls in the program development, but also  mention those persons responsible for program breakdowns within the stipulated timeframes.

The DIC Renaissance Differed

On January 27, 2016, the National Security and Defence Council of Ukraine obliged the government to finish the development and approve “the State program of reforming and developing the defence industry for the period till 2020” by February 29, 2016.

The program was not approved within the stipulated timeframe.

Oleksandr Turchynov had been responsible to control the program’s implementation stage. In spite of the pathetic statements and strict timeframes, the program was not approved by the end of the year.

The MilitaryIndustrial Complex Disruption: By Program or Strategy?

The program was not developed in a vacuum. On January 20, 2016, the Cabinet approved the core concept structure of the document. At the same time, the Ministry of Economic Development and Trade was obliged to develop and submit the program within two months.

The concept of the document is to share its information with others. It contains common issues. Among the national defence problems mentioned in it are the following:

  • DIC does not have the capacities to meet the demands of the Armed Forces, which, in turn, threatens national security;
  • Traditional, internal, and inter-state co-operation, scientific and technical ties between defence enterprises are lost;
  • high level of depreciation of fixed assets;
  • insufficient number of state orders for the defence industry;
  • insufficient state budgeting;
  • demands to minimize dependence on import substitution.

These are just a small number of problems the program aimed to solve. At the meeting of the Parliamentary National Security and Defence Committee on November 23, 2016 “swords over the program were crossed” again.

Sergii Pashynskiy, the Head of the National Security and Defence Committee: “In terms of main assets, the leaders of the defence industry are not in a state which could be identified as in critical condition but a catastrophic one. In the case we do not finance the Malyshev Plant (the State Enterprise “Kharkiv Armored Plant” specialized in armored-vehicle manufacturing – UP) for at least UAH 400 billion per year, the plant will not exist. We will lose technology. There are a lot of such examples. The state government’s fixed assets are not financially supported.”

Denys Hurak, the Deputy Director General of Ukroboronprom: “During the last two and a half years, the development of Ukroboronprom was budgeted by the state for about UAH 30 million or USD 1 million. It’s  ridiculous, it’s only peanuts. We have worn out capital assets that have not been modernized for the last  twenty five years. This is a reality all of us must change.”

According to the main concept,  the catastrophic situation which exists in the domestic defence industry would be changed and transformed for the better during the second phase of the program, starting from 2018. In this case, Ukraine would become fully independent from Russia for weapons production and military equipment, and defence enterprises will start to manufacture state-of-the-art weapons.

While waiting for positive results in 2018, our chances are rapidly vanishing. The start of the program is postponed again.

Yet again, there is one more problem.

The program’s core strategy, in the case that it is approved in a short period of time, will define a medium-term perspective only. The country and the defence industry have to determine, primarily, long-term perspectives of development. Also, the development program should be introduced for the Development Strategy for the military-industrial complex.

“We have no strategy for the defence and industrial sector development,” said former Director of the Defense and Security Department, Viktor Plakhuta, “Primarily, long-term documents should be accepted to adopt a vision where the country will move, and only then short-term strategies should be introduced. Again, nobody needs it, because the strategy does not take into account funds. Thus, these funds are included into the program.”

The Deputy Minister of Economic Development, Yurii Brovchenko, disagrees with the fact that strategy documents do not exist. Thus, he mentions there is a separate part devoted to the DIC development in the national security strategy and defence document:“All strategic documents about defence are already  written, they are not in one document but in several ones including the Strategy of National Security and Defence, the law on defence, the Strategic Defence Bulletin, and in each of these documents defence is discussed with some details. We are developing the program based on these very documents. This is a usual thing. The strategy is planned to be introduced until 2035, and we will work on it. Right now, we have to think about  the present moment. “

UAH 171.2 billion “Wish Lists” in the Program from Ukroboronprom

The Ministry of Economic Development and Trade was responsible for development of the program. In spite of this, the first project of the program was developed by Ukroboronprom.

This document is classified as a “top secret” one. Because of these reasons, Ukrayinska Pravda will not publish it.  In order to familiarize a reader with the level of work performed by responsible officials, let us go through a project of the program.

Passport of the program for UAH 171.2 billion from Ukroboronprom.

Even a quick review of the document with dozens of pages causes a surprise.

The heads of Ukroboronprom honestly recognize the program’s content as “wish lists” of all subsidies granted by the defence industry.

Volodymyr Korobov, the Deputy Director General of Ukroboronprom said, “We gathered all design engineers, The National Academy of Sciences of Ukraine, the Space Agency, the Ministry of Defence, the Ministry of Economy, and I could not even guess what parties would be worth to involve in this discussion in addition to these officials. Each of the involved parties explained their vision of today’s problems that have accumulated.”

Roman Romanov, the Director General of Ukroboronprom: “Wish lists of all parties involved are in this document.  Money asked for science and education were just “wish lists”. It is wrong to say that all of these people wanted to steal money. Everyone understood that the document passed to the Ministry of Economy, dear gentlemen,, and it is you who understand how the economy should work. How much money do you expect? Please make a decision and describe it in the program.”  The leaders of Ukroboronprom could not take full responsibility under this program.

The “approach was confirmed” by the First Deputy to the Secretary of National Security and Defence Council of Ukraine, Oleg Hladkovskyi, who in an interview to Ukrayinska Pravda asked not to call him the “Overseer” of Poroshenko.
The sum of UAH 171,2 billion, which is expected to be spent on training and modernization of production, is not the biggest one in the draft program created by Ukroboronprom.

The document also identifies types of products and the quantity a certain enterprise will be able to produce in case further development is financed.

For instance, in the draft of the program, the authors estimated that funding of about UAH 171 billion over 5 years will help the defence enterprises to manufacture products for UAH 658 billion.

Ukrayinska Pravda questions the figures in the draft program developed by Ukroboronprom. With the expenses of UAH 658 billion or about USD 24 billion at the current rate of exchange, neither domestic nor foreign customers will be able to cover the cost.

Some other points and figures are also questionable.
In open sources,  the price of MLRS projectile “Grad” varies from USD 1.000-5.000 while the program identifies the price as being about USD 10,000.

Why? UP asked Oleg Hladkovskiy to comment on it but no reply:
“I do not want to comment on “Grad” or anything else. Right now, there is a stage when it is impossible to calculate net cost of products because there is no pre-production, it has not been finished yet.”

Also, according to the document, the “Lenkuznia” plant, controlled by shareholders Petro Poroshenko and Igor Kononenko, is expected to manufacture  eighteen Gurza-class boats (“Desert Viper”) during the next  five years.
Besides the fact that  the price of these boats exceeds the price of the same type of foreign made models by several times, there are some doubts that the plant will be able to produce them at all. Thus, according to the city council, there is the decision which was approved at the end of September 2016, and states that apartment houses should be built on the plant territory.
But in his interview to UP, Oleg Hladkovskiy, despite the fact that he is a long-time business partner of the plant owners and studied with Kononenko at university, commented he knew nothing about plans for building apartment houses on the territory of the “Lenkuznia” plant.

In the program version proposed by Ukroboronprom, it is proposed to finance UAH 291,690,000 in such areas as development, modernization of production of ships design, boats for special purpose and platforms such as Gurza-class boats, “Lan boats”, ” Centaur boats” and other types of boats, according to 2.1.2.v1., and also it will make it possible to develop the documentation for the construction of 21 units of new products.
Also, it will allow to produce 101 units in total for UAH 24.176 billion including:
“Lan-class boats” – 3 units (UAH 4.2 billion or 1.4 billion per 1 boat);
“Gurza-class boats” – 18 units (UAH 5.8 billion or 320 million per 1 boat);
“Centaur-class boats” – 8 units (UAH 3.1 billion – 400 million per 1 boat).

Comments of the heads and managers of the “Lenkuznia” plant were also a surprise.

In spite of the fact that responsible officials included the plant to the program, it is still not clear whether the plant will be able to fulfill the specified amount of production as soon as the budget financing comes.
Denys Hurak, the Deputy Director of Ukroboronprom: “I, honestly know little about  the current situation at “Lenkuznia” except the fact that we import some components required for boats. That’s all I know about “Lenkuznia” as this enterprise is not a part of Ukroboronprom.”

Another story related to Ukroboronprom is about the “Palada Plant” (the Kherson Shipyard – UP), which is a part of the SC Ukroboronprom. The program finances the development and production of a floating hospital for 200 people by the “Pallada Plant”. Ukroboronprom is unable to answer whether the Ukrainian Navy Forces need it or not, and they do not see any coincidence with the fact that the Director General of the project, Roman Romanov, is from the Kherson region.

After detailed discussions with officials of Ukroboronprom, the National Security Council and the Ministry of Economic Development and Trade, it seems clear that no one checked proposals before including them into the document: neither the validity of amounts mentioned in the document nor facilities of enterprises needed to develop production, nor actual demand of the Armed Forces in these types of weapons and equipment.

It becomes apparent that the development program of Ukroboronprom took into account just words of honor of the enterprises’ representatives who included their “wish lists” into the document.

In spite of the fact that Hladkovskiy tried to assure UP that there  were no improbable figures in the program: “Everything is right in terms of what we should do. It concerns the Malyshev Plant and “Iskra”, and everything included into the document is of vital importance. Just no allocations for that. ”

We believe, Hladkovskiy meant not the draft program of Ukroboronprom, but the final version of the document.

The “New Way” Program

For a long period of time, they tried to “shift the blame” for the slow speed of the development program’s implementation to the Minister of Economic Development and Trade, Aivaras Abromavičius. He was replaced by Stepan Kubiv nine months ago, but the program has not been developed yet.

In June, Jurii Brovchenko was appointed as an assistant for defence and security issues for Kubiv. In spite of the fact that Brovchenko returned to the Ministry from Ukroboronprom, the program of the state-based project was postponed. He started to develop his own program.

Brovchenko explained to Ukrayinska Pravda that a version of the Ukroboronprom program does not fully take into account the needs of the Ministry of Defence related to the development of weapons and military equipment. Thus, in interdepartmental commissions concerning the defence, working at the National Security Council and chaired by Oleg Hladkovskiy, they decided to complete the program.

Brovchenko says it is classified as a “top state secret” and it is not possible to tell the press what points were declined by the Ministry.
Yurii Brovchenko, the Deputy Minister of the Ministry of Economic Development and Trade: “What was wrong with the program? The OPC development program has to include general activities aimed to improve the overall situation in the industry. These industries include the airline industry, the artillery fire production industry, and the armored fighting vehicle production industry. All of these activities should be included into the program. As soon as the general program is developed, we will start working on the targeted programs for one or another direction. For example, we are working on the program development and production of munitions and special chemicals finished by 2021 at the same time”.

The Brovchenko’s Program is distinguished from the programs of Ukroboronprom by strictly determined funding which is around UAH 19.2 billion.

In addition,  in August 2016, the program still involved a number of pitfalls. Ukrayinska Pravda knew about it from  an internal memo.

Among the major pitfalls of the Brovchenko’s Program are the following:

  • there are no calculations related to total amounts of public funds and their distribution among the tasks and activities of the program;
  • the state target program does not comply with the defence weapons and equipment program;
  • the final results lack information about projected volume growth of production and sales.

Plakhuta, the former Director of the Defence and Security Department of the Ministry of Economic Development and Trade, urged Minister Stepan Kubiv that in the case this program comes into effect, there would be uncontrolled, inappropriate, and inefficient use of state funds.
Ukrayinska Pravda does not have information whether these amendments were taken into account while working on the final draft or not.
The document is classified as a secret one.

No Modern Weapons. Are there any Guilty?

Absence of modern weapons in the army is the most common question from the front line of the military. Because of the delay in the program’s approval, the development of the production of defence enterprises, and the appropriate distribution of budget resources for the needs of the army, the modernization of new weapons in the army is postponed.

Accordingly, certain officials should be liable for this pitfall.

Even the First Deputy of the Secretary of NSDC, Oleg Hladkovskiy, believes it  to be catastrophic.  In his interview to Ukrayinska Pravda on discontinued document approval, he said the following:

“The weapons and military equipment program’s development is delayed  by one year. This is an example not only to start an administrative investigation but for there to be even worse consequences. Employees go to their workplaces but do nothing. “

Hladkovskyi, “The program is delayed for one year. This is an issue not only for administrative investigations.

* * *
So, we have the following:

Taking into account that our country in a state of war, a program like this should have been developed in 2014, but the Cabinet of Ministers and the National Security and Defence Council of Ukraine only started to work on it in 2016 only. However, according to official statements, the MIC development program is suspended again for at least  a year.

Such inactivity results not only in disruption of the country’s defence in the near future, but also it leads to increased losses in military operations.

Accordingly, all guilty parties must be subjected not only to administrative sanctions, but more harsh sanctions as well.

Who do these guilty hands belong to? Posts and names can be easily found in the following documents:

  • President Petro Poroshenko who suspended the NSDC decision for several months;
  • Oleksandr Turchynov, the NSDC Secretary, responsible for implementation of the NSDC program;
  • the First Deputy Assistant of the Secretary of NSDC, Oleg Hladkovskiy, the head of the interdepartmental commission of defence, which was also involved in the program assessment;
  • the Minister of Economic Development and Trade, Stepan Kubiv, as the Ministry Head, was assigned by the State to develop this program;
  • the Deputy Minister of the Ministry of Economic Development and Trade, Yurii Brovchenko, as the responsible person for defence issues;
  • the Director General of Ukroboronprom, Roman Romanov, as the head of the state concern, which undertook the development of new program.

P.S. The author asks Security Service of Ukraine (SSU), which interviewed state officials and who supplied us with the documents about the Ukroboronprom program, not to waste time. It would be worth it to direct activities and efforts of the security services to identify and document work of those officials who suspend the development of the defence industry and undermine the country’s defence.

Oleksii Bratushchak, Ukrayinska Pravda