Russia’s Defense Industry in Debt, Deputy PM Says

Russia’s defense industry enterprises is feeling the weight of its own debt, with about a third of the total owed being problematic and requiring restructuring, Yury Borisov, deputy prime minister responsible for the development of the sector, told Vedomosti.

In an interview with the newspaper, Borisov also talked about the draft of the Russian lunar program, the Vostochny Cosmodrome.

“We have been very careful in analyzing all of the defense industry’s debts, and one-third is problematic. Some of the credit will never be returned, enterprises will only pay interest indefinitely. Everyone understands that something needs to be done here,” Borisov said. “There is no mechanism that would suit everyone. Someone will be at a disadvantage. If we transfer everything to the banks through write-offs, we will put our main credit organizations, to put it mildly, in a difficult situation,” he said, adding that the budget also may not withstand such a load.

Meanwhile, the Russian lunar program has not yet been adopted, Borisov said. According to him, the key element of this program will be a super-heavy class launch vehicle with a price tag of 1-1.7 trillion rubles ($14.98 billion – 25.46 billion). “This is a huge range, so you can’t plan it,” he noted.

Talking about the pace of construction of the second stage of the Vostochny Cosmodrome, Borisov said that nobody is happy with the state of affairs on this score. “The situation does not suit anybody – neither with the construction of the first stage, nor with the construction of the second. The works on the first stage were practically disrupted, only the most necessary facilities were built, which allowed for several launches from Vostochny – vehicles Soyuz-2.1a and Soyuz-2.1b,” he told the newspaper.

The deputy minister has no comforting news for mobile operators regarding 5G networks, the newspaper wrote, adding that allocating frequencies in the 3.4-3.8 GHz range would be possible only temporarily and in some large cities.