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SEPTEMBER 2020

Delays In Construction Of Dry Dock For Russia’s “Admiral Kuznetsov” Heavy Aircraft-Carrying Missile Cruiser

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Delays In Construction Of Dry Dock For Russia's “Admiral Kuznetsov” Heavy Aircraft-Carrying Missile Cruiser

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The construction of the dry dock for the repairs of the heavy aircraft-carrying missile cruiser “Admiral Kuznetsov,” appear to be delayed.

This is due to a conflict that appears to have arisen between the customer and the builder of the dock for repairing the only aircraft carrier Admiral Kuznetsov in Russia. The parties mutually accuse each other of delaying the project.

The Russian Company “Investments, Engineering, Construction” (IEC), which is building the dry dock in Murmansk to modernize Russia’s only aircraft carrier submitted a complaint to the Prosecutor General’s Office and the Security Council about construction customers — the Zvezdochka Ship Repair Center and the United Shipbuilding Corporation (USC), of which it is a subsidiary.

Russian outlet RBC received copies of the letters.

The customer created the conditions in which the reconstruction of the dock becomes impossible, according to the letters from Gleb Yevtushenko, the head of IEC. He makes several complaints at once.

IEC received a contract for the construction of the dock in July 2019, the total cost of work – 23.9 billion rubles ($332 million).

But the Zvezdochka Ship Repair Center paid only 2.6 billion rubles ($36 million) from the promised advance of 7.1 billion rubles ($98.6 million) and did not pay about 800 million rubles ($11 million) of actually completed work.

Also, Zvezdochka delayed the provision of design documentation for the first stage of construction for more than six months, and the documents for the second stage have not been sent yet.

The documents for the second stage have not even been submitted to the Glavgosexpertiza, which usually reviews them for two months, and without them the work is blocked, said Yevtushenko.

Work on the two stages of construction had to be carried out at the same time, so that the heavy aircraft-carrying missile cruiser could be loaded on the dry dock in June 2021, Yevtushenko explained.

That is, the ship will go into the unfinished dock, there they will install bottom-side reinforcement, screws and shafts. Then the cruiser will leave the dock, the specialists will finish the repair on the water, and the contractor will complete the construction.

Now, it turns out, Zvezdochka wants to terminate the contract with IEC, but this will delay the deadline for docking the cruiser to 2022, or even 2023, which “will cause financial damage and damage to the state’s defense,” the letter to the Prosecutor General’s Office said.

According to the letter, IEC is still present at the construction site with 35 pieces of equipment, from the initial 53, while only deploying the necessary equipment would take any other contract at least several months.

The letter asks for the Prosecutor’s Office to review Zvezdochka, the construction site and to forbid termination of the contract.

In response, the USC accused the contractor of disrupting the terms of work. The company handed over the documentation to the first stage four months after the conclusion of the contract, the documentation for the second stage is being approved and will be sent to the Glavgosexpertiza, said the representative of USC. Work is paid on time, the company said.

IEC “objectively does not adhere to the project,” said a representative of the corporation.

Construction is delayed due to a significant deterioration in the financial situation of the contractor, who has recently received financial claims from previous customers, the representative said.

At the end of last year, Alexey Rakhmanov said in an interview with Kommersant that USC was unhappy with the pace of construction work.

According to him, the corporation was partly forced to work with IEC, since “the three giants, construction companies, well-known in the Russian market, refused to participate in this risky project for them.”

Now, USC plans to change the contractor in order to comply with the deadlines for docking Admiral Kuznetsov in 2021, the representative of the corporation explains. On April 3rd, “Zvezdochka” notified IEC on termination of the contract and now analyzes the proposals of other contractors.

The construction of the dry dock for the modernization of Admiral Kuznetsov is delayed for several reasons, Valery Kireev, deputy head of the Center for Shipbuilding and Ship Repair Technology (TsTSS) told RBC, which has the status of a state scientific center and acts as the general designer of the dry dock.

Conflict between the contractor and the customer. Despite the lack of approved design documentation, at the second stage it is possible to carry out a large number of works on the shore – equip the site, dismantle structures, etc., but there is virtually no contractor at the construction site, Kireev noted.

The second reason is associated with an increase in the planned cost of the second stage of construction. The TsTSS in December 2019 doubled it, said Kireev, because of the identified increased seismic resistance for a dry dock of 7.9 points (conventional seismic maps in the region have 6 points).

Initially, the cost of the second stage was 16 billion rubles, the new price was 33.6 billion rubles, according to an unnamed source.

USC and the Ministry of Industry and Trade refuse to agree on a new price, explained the deputy head of the designer. Because of this, according to him, the Glavgosexpertiza cannot start checking the documentation.

At the request of the Ministry of Industry and Trade to reduce the cost of the project, TsTSS proposed to abandon activities for 5 billion rubles that are not directly related to the dry dock, but have not yet received consent from the ministry and the customer, Kireev said.

According to him, the Ministry of Industry and Trade instructed the customer to hire a third-party organization to verify the settlements of TsTSS.

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