Russia’s Multi-Billion Military Upgrades

Vladimir Putin has overseen the signing of contracts worth hundreds of billions of dollars to upgrade Russia’s military, including a $9.2 billion deal to build new-generation nuclear submarines.

The Russian prime minister, who will seek a third term as president next year, oversaw the signing of seven contracts between the Defense Ministry and the United Shipbuilding Corporation at the Sevmash shipyard in Severodvinsk on Wednesday, according to the Moscow Times.

The deal — including an agreement to build Yasen and Borei class strategic nuclear submarines — is part of an ambitious 20 trillion ruble ($653 billion) program to fully modernize Russia’s military by 2020, Reuters reported.

A quarter of that amount has been assigned to upgrading the Navy.

Citing Putin’s website, the Moscow Times reported that a large part of 4.7 trillion rubles allocated to the Navy will be spent over the next five years.

“The federal budget has allocated 85 billion rubles for the building of nuclear submarines and frigates, ship repairs and technical servicing requirements this year,” Putin said. “For 2012, this figure is already 93 billion rubles.”

While details of the contracts are “sketchy,” they involve construction of five Yasen class submarines, Reuters reported, adding that one Yasen submarine would cost an estimated $1.3 billion.

Yasen is bigger than Borei, whose cost is estimated at $759 million. It is armed with cruise missiles and does not carry long-range ballistic missiles such as Bulava which fall under international arms reduction treaties.
No contracts for construction of Borei class submarines were signed on Wednesday. The spokesman for state-run United Shipbuilding Corporation (USC), of which Sevmash is part, said there were ongoing discussions over the price.

Putin said that all the new submarines would be built by Russian companies, RT news reported.

“Our ship-building industry must be prepared for serial production of advanced hardware and weapons, fully compliant with modern standards and the tasks which the Russian navy must fulfill,” the Putin said, according to RT.

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