Andrey Kostin and VTB Bank got to the ships
State Bank VTB received in trust for five years the shares of the United Shipbuilding Corporation (USC).
This is the largest shipbuilding holding in Russia, which is wholly owned by the state. Why was it necessary to transfer state assets from one pocket to another? The simplest answer is that preparations for the privatization of shipyards may have begun.
The corporation has been a model of commercial inefficiency in recent years. USC includes 50 organizations that build hundreds of ships, both civilian and military. However, they do so at their own expense. By 2020, USC had accumulated 68 billion rubles of debt, which it could not repay on time (in total, loans were collected for 152 billion rubles). Then it was decided to allocate 30 billion from the budget to save it from default, and restructure another 38 billion at the expense of state-owned banks. Later, information appeared that the troubled debts of the shipbuilding holding were transferred to Promsvyazbank. Why is VTB here?
In this regard, it is interesting to recall the column that the head of VTB Andrey Kostin published in the spring. It was called: “Three answers to one question – how to return money to the economy?”. In it, he substantiated the ideas of increasing the public debt and spending reserves, but the emphasis was on “restarting privatization.” And in this regard I directly mentioned USC. Here is a quote from that post. “In the conditions of time pressure, it is necessary to increase the capacities of industrial shipbuilding by several times – to build hundreds of new oil tankers, gas carriers, ships for shelf development, container ships, and other specialized civil ships. Is the federally owned United Shipbuilding Corporation (which controls 80% of the industry’s potential) able to quickly and effectively cope with these challenges?! It seems to me that no. And there are dozens of similar examples.
Here it would be worth asking the question: how did it happen that a shipbuilding holding, which has huge resources, is not able to establish effective and dynamic work? After all, truly greenhouse conditions were created for USC. The company operated almost without competition. Not only did she receive defense orders, but also the fishermen were obliged to build ships in Russia, although it was cheaper abroad. In addition, huge contracts for USC were provided by Rosatom, which is developing its own icebreaking fleet. At the same time, USC continually showed holes in its financial statements, and a uniform mess was created at its shipyards.
Suffice it to recall a number of resonant state of emergency of recent times. In the winter of 2021, the unfinished Provorny corvette caught fire at the Severnaya Shipyard in St. Petersburg. In December 2019, the only Russian aircraft carrier Admiral Kuznetsov caught fire at the 35th shipyard. In 2018, a worker died in a fire at the Kronstadt Marine Plant during the repair of the Romuald Muklevich hydrographic vessel. And these are only the loudest emergencies. It is difficult to say what prevented to put things in order, at least with safety equipment. One gets the impression that the matter is not only in the carelessness of the workers – miscalculations in the economy can always be attributed to a fire.
The USC case is full of such dubious episodes. Take the same “Admiral Kuznetsov”. The USC explained the extension of the repair period for two years not by the consequences of the fire, but by the following fact: it suddenly became clear that not one, but all four gas turbine units needed to be repaired. What can be said about the quality of the technical diagnostics that was carried out at the conclusion of the repair agreement?
And in 2021, the security forces got to the director of the 10th shipyard Yevgeny Zudin. He is suspected of embezzling 45 million rubles allocated by the state for the repair of the Admiral Kuznetsov. An interesting pattern emerged. The Zvyozdochka Ship Repair Center (part of USC) received a contract for 20 billion rubles from the Ministry of Defense, after which it distributed work among other enterprises of the holding. The 10th plant was supposed to clean the aircraft carrier’s tanks from fuel residues, for which he received 71 million rubles. The investigation believes that the task was carried out by temporary workers and cost the plant more than half the price. The investigation also considers the director guilty of embezzlement and abuse of power. As if he gave the order to flood the radioactive compartment of the tanker in the Kola Bay, for the disposal of which he received an order from Rosatom.
God knows how far the threads from the “burnt” Yevgeny Zudin could stretch into the USC leadership. However, the president of the corporation, Alexei Rakhmanov, remained unsinkable for many years, despite many unresolved problems. At the same time, last year he was even scolded by the president personally. “Aleksey Lvovich, why did they conclude unprofitable contracts, huh?” he asked at a meeting on shipbuilding. The answer was this: they say, this problem concerns head orders, when a corporation begins to build without having a complete specification and understanding of what the ship will consist of.
Despite this, Rakhmanov led the USC for another year. Although back in 2019, representatives of the Ministry of Defense opposed the fact that the Ministry of Industry and Trade extended a five-year labor contract with a top manager. But the claims of the military in the Ministry of Industry and Trade were not taken into account. This can only be explained by the patronage of the Deputy Prime Minister Denis Manturov, with whom Alexei Rakhmanov once worked in the Ministry of Industry and Trade (this department formally oversees USC).
Apparently, it is no coincidence that the first decision that VTB pushed through after gaining control over USC shares was the change of the head of the corporation. Instead of Alexei Rakhmanov, the holding was headed by VTB Deputy Chairman Andrey Puchkov in mid-August. However, before USC was often criticized for the lack of professional shipbuilders among its managers. So the lawyer Andrey Puchkov is hardly well versed in the design and repair of ships.
Now experts are talking about the fact that VTB may divide USC into defense and civilian segments. It is clear that the defense will remain in state ownership and will live on military contracts. But the fate of civil shipbuilding, it seems, will be decided at the brainstorming sessions at VTB.
On the one hand, the matter is clear: Russian fishermen and oil exporters need ships. The only trouble is that domestic shipbuilders do not have the necessary technologies. After all, fishermen need not only a ship, but also equipment for processing their catch. It has traditionally been bought abroad. Now supplies have stopped and dozens of ships designed as “fish factories” are stuck in shipyards. As for large tankers, USC promised last year that it would start producing them. However, taking into account the fact that today oil traders are forced to work hard and be based offshore, it will not be easy to force them to buy Russian supertankers (if they can be created at all).
However, the former management of USC had previously found a promising direction. Back in the spring, USC Deputy General Director David Adamia announced the corporation’s plans to build Volgo-Don Max class vessels to serve the North-South transport corridor that runs through the Caspian Sea to Iran. He also announced figures: 45 container ships worth 78 billion rubles (in last year’s prices) will be needed. The process has already begun. At the end of last year, the Astrakhan Southern Center for Shipbuilding and Ship Repair, which is part of the USC, received a state order for the construction of four universal container dry cargo ships. It is not difficult to make a prediction: if the privatization of USC assets begins, it will start in Astrakhan.
Andrey Kostin himself received the position of chairman of the board of directors of the shipbuilding giant. In connection with these changes, how can one not recall his column on the need to privatize USC? Moreover, Kostin’s team already has a similar experience. VTB has shown that it can consolidate assets and transfer them to new owners without leaking information about the terms of transactions. Suffice it to recall the history of the Magnit chain of stores and the grain company Demetra-Holding.
VTB bought the first from the founder of the business, Sergei Galitsky, and the second was based on the assets of the convicted Magomedov brothers. It is noteworthy that in these cases, the “Marathon Group” of Alexander Vinokurov and Sergey Zakharov surfaced. Will she be interested in shipbuilding now? However, now that the threat of Western sanctions hangs over the beneficiaries of large Russian enterprises, the names of the real owners will most likely be hidden behind seven seals. As well as the conditions for them to receive a share in the business.
State Bank VTB received in trust for five years the shares of the United Shipbuilding Corporation (USC).
This is the largest shipbuilding holding in Russia, which is wholly owned by the state. Why was it necessary to transfer state assets from one pocket to another? The simplest answer is that preparations for the privatization of shipyards may have begun.
The corporation has been a model of commercial inefficiency in recent years. USC includes 50 organizations that build hundreds of ships, both civilian and military. However, they do so at their own expense. By 2020, USC had accumulated 68 billion rubles of debt, which it could not repay on time (in total, loans were collected for 152 billion rubles). Then it was decided to allocate 30 billion from the budget to save it from default, and restructure another 38 billion at the expense of state-owned banks. Later, information appeared that the troubled debts of the shipbuilding holding were transferred to Promsvyazbank. Why is VTB here?
In this regard, it is interesting to recall the column that the head of VTB Andrey Kostin published in the spring. It was called: “Three answers to one question – how to return money to the economy?”. In it, he substantiated the ideas of increasing the public debt and spending reserves, but the emphasis was on “restarting privatization.” And in this regard I directly mentioned USC. Here is a quote from that post. “In the conditions of time pressure, it is necessary to increase the capacity of industrial shipbuilding by several times – to build hundreds of new oil tankers, gas carriers, ships for shelf development, container ships, and other specialized civil ships. Is the federally owned United Shipbuilding Corporation (which controls 80% of the industry’s potential) able to quickly and effectively cope with these challenges?! It seems to me that no. And there are dozens of similar examples.
Here it would be worth asking the question: how did it happen that a shipbuilding holding, which has huge resources, is not able to establish effective and dynamic work? After all, truly greenhouse conditions were created for USC. The company operated almost without competition. Not only did she receive defense orders, but also the fishermen were obliged to build ships in Russia, although it was cheaper abroad. In addition, huge contracts for USC were provided by Rosatom, which is developing its own icebreaking fleet. At the same time, USC continually showed holes in its financial statements, and a uniform mess was created at its shipyards.
Suffice it to recall a number of resonant state of emergency of recent times. In the winter of 2021, the unfinished Provorny corvette caught fire at the Severnaya Shipyard in St. Petersburg. In December 2019, the only Russian aircraft carrier Admiral Kuznetsov caught fire at the 35th shipyard. In 2018, a worker died in a fire at the Kronstadt Marine Plant during the repair of the Romuald Muklevich hydrographic vessel. And these are only the loudest emergencies. It is difficult to say what prevented to put things in order, at least with safety equipment. One gets the impression that the matter is not only in the carelessness of the workers – miscalculations in the economy can always be attributed to a fire.
The USC case is full of such dubious episodes. Take the same “Admiral Kuznetsov”. The USC explained the extension of the repair period for two years not by the consequences of the fire, but by the following fact: it suddenly became clear that not one, but all four gas turbine units needed to be repaired. What can be said about the quality of the technical diagnostics that was carried out at the conclusion of the repair agreement?
And in 2021, the security forces got to the director of the 10th shipyard Yevgeny Zudin. He is suspected of embezzling 45 million rubles allocated by the state for the repair of the Admiral Kuznetsov. An interesting pattern emerged. The Zvyozdochka Ship Repair Center (part of USC) received a contract for 20 billion rubles from the Ministry of Defense, after which it distributed work among other enterprises of the holding. The 10th plant was supposed to clean the aircraft carrier’s tanks from fuel residues, for which he received 71 million rubles. The investigation believes that the task was carried out by temporary workers and cost the plant more than half the price. The investigation also considers the director guilty of embezzlement and abuse of power. As if he gave the order to flood the radioactive compartment of the tanker in the Kola Bay, for the disposal of which he received an order from Rosatom.
God knows how far the threads from the “burnt” Yevgeny Zudin could stretch into the USC leadership. However, the president of the corporation, Alexei Rakhmanov, remained unsinkable for many years, despite many unresolved problems. At the same time, last year he was even scolded by the president personally. “Aleksey Lvovich, why did they conclude unprofitable contracts, huh?” he asked at a meeting on shipbuilding. The answer was this: they say, this problem concerns head orders, when a corporation begins to build without having a complete specification and understanding of what the ship will consist of.
Despite this, Rakhmanov led the USC for another year. Although back in 2019, representatives of the Ministry of Defense opposed the fact that the Ministry of Industry and Trade extended a five-year labor contract with a top manager. But the claims of the military in the Ministry of Industry and Trade were not taken into account. This can only be explained by the patronage of the Deputy Prime Minister Denis Manturov, with whom Alexei Rakhmanov once worked in the Ministry of Industry and Trade (this department formally oversees USC).
Apparently, it is no coincidence that the first decision that VTB pushed through after gaining control over USC shares was the change of the head of the corporation. Instead of Alexei Rakhmanov, the holding was headed by VTB Deputy Chairman Andrey Puchkov in mid-August. However, before USC was often criticized for the lack of professional shipbuilders among its managers. So the lawyer Andrey Puchkov is hardly well versed in the design and repair of ships.
Now experts are talking about the fact that VTB may divide USC into defense and civilian segments. It is clear that the defense will remain in state ownership and will live on military contracts. But the fate of civil shipbuilding, it seems, will be decided at the brainstorming sessions at VTB.
On the one hand, the matter is clear: Russian fishermen and oil exporters need ships. The only trouble is that domestic shipbuilders do not have the necessary technologies. After all, fishermen need not only a ship, but also equipment for processing their catch. It has traditionally been bought abroad. Now supplies have stopped and dozens of ships designed as “fish factories” are stuck in shipyards. As for large tankers, USC promised last year that it would start producing them. However, taking into account the fact that today oil traders are forced to work hard and be based offshore, it will not be easy to force them to buy Russian supertankers (if they can be created at all).
However, the former management of USC had previously found a promising direction. Back in the spring, USC Deputy General Director David Adamia announced the corporation’s plans to build Volgo-Don Max class vessels to serve the North-South transport corridor that runs through the Caspian Sea to Iran. He also announced figures: 45 container ships worth 78 billion rubles (in last year’s prices) will be needed. The process has already started. At the end of last year, the Astrakhan Southern Center for Shipbuilding and Ship Repair, which is part of the USC, received a state order for the construction of four universal container dry cargo ships. It is not difficult to make a prediction: if the privatization of USC assets begins, it will start in Astrakhan.
Andrey Kostin himself received the position of chairman of the board of directors of the shipbuilding giant. In connection with these changes, how can one not recall his column on the need to privatize USC? Moreover, Kostin’s team already has a similar experience. VTB has shown that it can consolidate assets and transfer them to new owners without leaking information about the terms of transactions. Suffice it to recall the history of the Magnit chain of stores and the grain company Demetra-Holding.
VTB bought the first from the founder of the business, Sergei Galitsky, and the second was based on the assets of the convicted Magomedov brothers. It is noteworthy that in these cases, the “Marathon Group” of Alexander Vinokurov and Sergey Zakharov surfaced. Will she be interested in shipbuilding now? However, now that the threat of Western sanctions hangs over the beneficiaries of large Russian enterprises, the names of the real owners will most likely be hidden behind seven seals. As well as the conditions for them to receive a share in the business.