In the first issue magazine "Arms Exports" for 2022 published an article by Ruslan Pukhov, Director of the Center for Analysis of Strategies and Technologies (TSAST), dedicated to the development of the armored industry of Ukraine after 2014. The bmpd blog provides the text of the article.
By February 2014, the armored cluster of the Ukrainian state concern Ukroboronprom consisted of 18 state-owned enterprises, including the developer - the A. A. Morozov Kharkiv Design Bureau for Mechanical Engineering (HCBM), the serial manufacturer - the V. A. Malyshev Plant (ZiM, Kharkiv) and five repair enterprises - Kiev (KBTZ), Zhytomyr (ZHBTZ), Kharkiv (KHBTZ), Lviv (LBTZ) and Mykolaiv (NBTZ) armored factories. The remaining state-owned enterprises specialized in the production of components for armored vehicles.
A sharp change in the political situation in Ukraine as a result of the events of 2014 led to a catastrophic reduction in the main sources of financial income, which were export contracts concluded through the mediation of special exporting enterprises and brought up to 90-95% of revenues. Thus, for the Kiev Armored Plant (KBTZ), the income from export operations during 2016-2018 decreased from UAH 61.979 million to UAH 3.892 million.
At the same time, due to the armed conflict in the east of Ukraine, the volumes of the Ukrainian state defense order began to grow just as sharply, which made it attractive to private businessmen who previously paid little attention to such a meager financial source. This, in turn, led to the gradual displacement from the growing market of the previously almost completely dominant state-owned enterprises of Ukroboronprom. Both of these processes led to a financial fever and an even greater aggravation of the serious problems of the armored cluster.
At the same time, Ukroboronprom officials noted a decrease in the share of state concern enterprises in fulfilling the Ukrainian state defense order, which is increasing from year to year: in 2015, companies with private capital accounted for 23% of the total volume, and at the end of 2020 this figure more than doubled to 54%.
Export of armored vehicles
As of the beginning of 2014, Ukrainian enterprises fulfilled a number of large export contracts for the supply of armored vehicles.
Iraq
On September 25, 2009, a subsidiary of the Ukrainian state company Ukrspetsexport, the state enterprise Specialized Foreign Trade Firm Progress, signed a contract with the Main Directorate of Armament and Support of the Ministry of Defense of Iraq for the design (development and revision of documentation according to customer requirements), manufacture and supply to Iraq in five batches 420 armored personnel carriers BTR-4 (8×8 wheel formula) with combat modules "Sail", a set of spare parts, simulators, as well as the provision of services totaling 457.5 million dollars in the period from September 2010 to March 2012 G.
The contract price included services for theoretical and practical training of the customer's group of specialists in the amount of 90 people, carrying out with them the training necessary for operation and maintenance for two months in Ukraine. The terms of the contract were based on a 20% prepayment with subsequent payment of 70% of each batch of products after registration of the inspection report before shipment and 10% of the final payment of each batch after signing the certificate of receipt after delivery.
Ukraine was able to ship the first batch of equipment to Iraq only by the end of April 2011, it included four commander armored personnel carriers BTR-4KE, 20 linear armored personnel carriers BTR-4E and two complex dynamic simulators TE-BTR-4 crew armored personnel carriers BTR-4 produced by the KKBM named after A. A. Morozov. The second batch of eight commander armored personnel carriers BTR-4KE, 40 linear armored personnel carriers BTR-4E, eight armored sanitary evacuation vehicles BMM-4S with an individual set of spare parts, two complex dynamic simulators TE-BTR-4 and two maintenance and repair workshops (MTO) was sent to Iraq in July 2012.
The third and last batch left Ukraine at the end of March 2013, it included five commander armored personnel carriers BTR-4KE, 29 linear armored personnel carriers BTR-4, six armored sanitary evacuation vehicles BMM-4S, two maintenance and repair workshops and two integrated dynamic simulators TEBTR-4. This shipment was not accepted and was returned by Iraq in January 2014. - by the end of the year, the equipment from its composition was transferred to the armed forces and the National Guard of Ukraine.
The numerous negotiations with the Iraqi side that followed did not lead to a positive result, the contract was finally disrupted, the advance was not returned, and penalties in the amount of more than $ 100 million were imposed on Ukraine.
Ethiopia
In June 2011, the state company Ukrspetsexport signed a contract with the Ethiopian State corporation Metals & Engineering Corporation for the supply of armored vehicles for the Ministry of National Defense of Ethiopia. It was officially reported that the deliveries will include about 200 tanks, and the amount of the agreement will exceed $ 100 million - which will make this contract one of the eight largest transactions of Ukrspetsexport over the previous 15 years.
SE "Kharkiv Armored Repair Plant" at the exhibition in Abu Dhabi (UAE), held in February 2011, presented a working sample of a modernized T-72UMG tank with a new power plant based on a 5TDFMA-1 diesel engine with a capacity of 1050 hp developed by SE "Kharkiv Design Bureau for Engine Construction" with the preservation of a fan cooling system, air conditioning and auxiliary power plant, improved guided missile system with night sight and guidance device 1K13-49, providing the possibility of using tank guided missiles of the Ukrainian complex "Combat", automatic loader adapted for tank guided missiles "Combat" designed and manufactured by the State Design Bureau "Luch" (Kiev) and dynamic protection "Knife" development of the Ukrainian GP MBCKT "Microtek".
The execution of the contract was transferred to the State Enterprise "Kiev Armored Plant", and the State Enterprise "Lviv Armored Plant", the main contractor for the supply of armored vehicles to Sudan, was also involved. Due to the straitened financial situation, the Ethiopian customer decided to purchase not only an upgraded version of the tank based on the T-72UMG variant, modified taking into account his wishes, but also unmodernized T-72B1 tanks of the second category from storage without repair, but with a check for operability, as well as T-72B1 tanks from storage after major repairs. The total amount of the contract was $137 million. Transportation was carried out from the Ukrainian port of Oktyabrsk to the port of Djibouti.
As part of the contract, the first 11 upgraded T-72 tanks without PKT and NSVT machine guns were delivered to Ethiopia in 2014. In 2015, four more upgraded T-72 tanks were delivered without PKT and NSVT machine guns.
In general, the implementation of the contract was delayed for five years. In total, during this time, 215 T-72 tanks in various configurations were shipped to Ethiopia, 30 of them upgraded, four armored BTS-5B tractors, 195 shots of tank guided missiles "Kombat", 2000 aerosol grenades GD-1 developed and manufactured by GNIIPH (Shostka), operational ZIP kits 1:30 65.184.1.EK-1 for T-72B1 tanks, 13910 elements of dynamic protection HSCHKV-34 developed and manufactured by GP BCKT "Microtek", mobile workshops for repair of electrical equipment (MES on the KrAZ-6322 chassis), mobile maintenance workshops (MTO on the KrAZ-6322 chassis), control and verification machines for the controlled complex missile armament (KPM on the KrAZ-5133 chassis), a set of KTK1 simulator and control, which controls the deviation of the aiming line during firing, which allows you to assess the technical condition of the laser channel of the sight and to practice the professional skills of gunners, the T-72 TMV-72 tank driver simulator and the crew simulator of upgraded T-72 tanks, designed for providing individual training of driver mechanics and crews of T-72 tanks, etc.
In addition, in 2013 Ukrspetsexport signed a contract with the Central Procurement Directorate of the Ministry of National Defense of Ethiopia for the supply of sets of spare parts and special tools for old T-55 tanks that remained in service with the Ethiopian army.
Thailand
In 2007, Ukraine won a tender for the supply of 96 BTR-3 armored personnel carriers of various modifications to Thailand with a total cost of about 4 billion baht (about $ 117 million). The final agreement was reached a year later, and the contract for the supply of equipment was signed only in August 2008.
The BTR-3 armored personnel carriers for Thailand were manufactured by the Kiev Armored Plant and were equipped with the Assault combat module with a 30 mm ZTM-1 cannon, a 7.62 mm PKT machine gun, an automatic grenade launcher, a Cloud system, Barrier anti-tank guided missiles, as well as Mercedes diesel engines, an Allison automatic transmission and a air conditioning.
The first two Ukrainian-made BTR-3E1 arrived in Thailand at Utapao Air Base on September 28, 2010 on an IL-76MD aircraft.
In August 2011, another contract was signed with Thailand for the supply of 121 BTR-3 armored personnel carriers and vehicles based on them. Thus, the total amount of the contract reached $256.27 million.
In the period from 2014 to 2016 - at the height of hostilities in the Donbas - Ukraine exported to Thailand 49 linear armored personnel carriers BTR-3E1, four armored personnel carriers with 120 mm mortar BTR-3M2, nine armored personnel carriers with 82 mm mortar BTR-3M1, 11 anti-tank missile systems based on armored personnel carrier BTR-3RK (K), six repair and evacuation armored personnel carriers BTR-3BR and three ambulances BTR-3S. The final batch of armored vehicles consisting of 11 BTR-3E1 units was delivered to the customer in March 2016.
In September 2011, Ukrspetsexport Group received a contract worth $ 240 million for the supply of 49 new BM Oplot-T tanks to the Thai Army and two armored repair and evacuation vehicles "Athlete" based on them with a deadline until the end of 2014. In accordance with the commission agreement dated December 7, 2011, the amount of remuneration due for the performance of the contract to the tank manufacturer, the Malyshev Plant, amounted to $ 156 million.
However, on January 14, 2014, only the integrated dynamic simulator of the crew of the BM "Oplot-T" tank was sent, and the first batch of five BM "Oplot" tanks was shipped already in 2015. In 2016, two more batches of tanks were shipped, a total of 10 units. In 2017 - three more batches, a total of 16 units. In 2018, the last two batches of the main BM "Oplot-T" tanks (13 units) were shipped, and six tanks of the final batch were shipped on May 17, 2018. It also includes two BRAM "Athlete" produced by the A. A. Morozov HCBM. In addition, in addition to the 10 Kombat missiles delivered in 2013, in 2016 Thailand received 12 shots from the Kombat anti-tank guided missile.
Democratic Republic of the Congo
At the end of 2013, the State Enterprise "Ukroboronservice" signed a contract with the Democratic Republic of the Congo (DRC) for the supply of 51 T-64B1V tanks (without the 9K112(-1) "Cobra" guided weapons complex) with their repair and modernization to the level of T-64B1M in the amount of UAH 100 million (about $ 12.5 million). Work on the repair and modernization of T-64 tanks of the simplified version was carried out at the State Enterprise "Kharkiv Armored Plant". The contractor actually purchased the equipment from the Ministry of Defense of Ukraine for a song, and the main part of the funds paid was the price of repairs and modernization, as well as profit.
With the outbreak of the armed conflict in the south-east of Ukraine, the contract was suspended (some sources claimed that the contract was terminated), although official representatives in Kiev denied this. In the summer of the same year, a modification of the T-64B1M tank was publicly presented for the first time, and on September 10, 2014, the first 10 T-64B1M tanks produced under a Congolese contract were transferred by the manufacturer to the National Guard of Ukraine.
In April 2016, it became known about the shadow supply scheme of 25 T-64 tanks to the DRC through Estonia - it was reported that the Estonian company TransLogistic Group OU illegally delivered these tanks from Ukraine to the DRC along with machine guns and ammunition. The Money Laundering Data Bureau of the Estonian Police and Border Guard Department became interested in the transaction. The department noted that in February of that year, 862 thousand dollars were received at the Estonian branch of Danske Bank to the account of TransLogistic Group OU, owned by Gennady Vilkaste, who lives in Latvia. This amount was an advance payment for the transportation of tanks and ammunition. According to the documents of the Estonian police, these were 25 T-64BV-1 tanks, 12.7 mm NSVT and 7.62 mm PKT machine guns and 25 corrective packs, ammunition and additional devices.
Pakistan
In May 2021, the Malyshev plant, through Ukrspetsexport, delivered the last batch of 10 new 6TD-2 459M tank engines to the Pakistani state armored enterprise Heavy Industries Taxila (HIT) and Arsenal 304 Spares Depot EME.TU, 6TD-1 459I.THAT with a delay in the execution of the contract for four years.
Pakistan, since 1995, remains one of the main and most stable customers of the Ukrainian armored industry. So, apart from the annual deliveries of spare parts, consumables for warranty service and components for the T-80UD tanks previously delivered from Ukraine in the 1990s and the Chinese-Pakistani MVT-2000 (Al-Khalid) tanks produced at HIT, 110 engine and transmission compartments based on 6TD-2 diesel engines for Al-Khalid tanks and about 40 MTOs based on 6TD-1 for the T-80UD produced by the Malyshev plant were shipped from 2014 to 2021.
In February 2021, at the international arms exhibition IDEX 2021, Ukrspetsexport signed a contract for the repair of Pakistani T-80UD tanks for a total of $85.6 million.
Nevertheless, the Malyshev plant ended 2020 with losses of UAH 112.4 million (in 2019 losses amounted to UAH 420 million), and total accounts payable as of January 1, 2021 amounted to UAH 1.8 billion (about $ 65 million). The growing problems of the company, which has been in the stage of permanent bankruptcy since 2011, are also indicated by the fact that seven general directors have already been replaced in the period from 2014 to 2019.
Myanmar
Myanmar continued to be another long-standing partner of Ukraine in military-technical cooperation, despite numerous sanctions from Western countries, where, with the participation of Ukrainian specialists, licensed production of BTR-3U armored personnel carriers from machine kits supplied from Ukraine was established. In 2003, Ukrspetsexport signed a contract with the Myanmar state-owned company Amthyst Trading Company Limited for the supply of 100 BTR-3U units, and this contract provided, in addition to the supply of the first 10 ready-made BTR-3U armored personnel carriers, also the organization of their production in Myanmar. Judging by the number of produced by PJSC "Kiev Plant of Automation named after G. I. Petrovsky" and delivered over the past years digital stabilizers of weapons SVU500-3TS, which are installed on the combat module "Squall" of the armored personnel carrier BTR-3U, at least 92 armored personnel carriers have already been assembled in Myanmar.
Expanding the range of manufactured products, Ukrspetsexport, under a contract with the Defense Industry Department of the Headquarters of the Commander-in-Chief of the Armed Forces of Myanmar from 2014, began to supply technical documentation for the assembly and manufacture of welded hulls of lightly armored vehicles (wheeled armored personnel carriers BTR-4U and tracked platforms 2S1U), as well as MMT-40-1 medium tanks and production and technological equipment for the assembly of armored personnel carriers BTR-4. The designation 2C1U was given to a tracked vehicle based on the chassis and armored hull of the 122-mm self-propelled howitzer 2C1 "Carnation", the assembly of which is being adjusted in Myanmar. The MMT-40-1 tank, in turn, was created in Myanmar by installing a turret with a 105 mm cannon from the Chinese wheeled (6×6) WMA301 (PTL02) Assaulter on the 2X1U platform.
In June 2014 Anatoly Girshfeld, the owner of the largest forging and stamping enterprise in Ukraine, PJSC Lozovsky Forging and Mechanical Plant, said that in the interests of Myanmar, it is planned to produce about 200 armored hulls for wheeled armored personnel carriers.
Similar work was carried out in Thailand. In July 2019, the General Director of the Ukroboronprom concern, Pavel Bukin, announced the dispatch of the first armored command and staff vehicle BTR-3KSh for licensed assembly at an authorized enterprise in cooperation with the Institute of Defense Technologies of the Ministry of Defense of Thailand for the production of BTR3E1 of various modifications and vehicles based on it, as well as to provide service in Thailand within the framework of the agreement concluded in November 2015.
After 2014, small-scale deliveries of BTR-4 armored personnel carriers to Nigeria, Indonesia and the United States, as well as repaired T-72 tanks and armored BTS-4 tractors to Nigeria, Myanmar and Uganda were carried out. A large batch of repaired and partially modernized BRDM-2s was delivered to the UAE (apparently for subsequent transfer to Middle Eastern armed formations). In 2020, also for the first time in history, export deliveries of Kozak-2 armored vehicles (4×4) produced by PJSC NPO Praktika (Kiev) began - two cars were sent to Indonesia.
Ukrainian State Defense Order of armored vehicles
The Chief of Armament of the Armed Forces of Ukraine officially recognized irretrievable losses during active hostilities in 2014-2015. 78 tanks and 236 infantry fighting vehicles. Independent experts, based on the analysis of open source data, believe that by the beginning of 2014 Ukraine had 83 BM Bulat tanks and 700 T-64BV tanks, but during the fighting in the Donbas at least 170 T-64 tanks (according to other sources, more than 300 units) of different series were destroyed in battle, and 65 were captured by enemy forces. According to the inventory of material assets of the 17th Separate Tank Brigade of the Armed Forces of Ukraine alone, its official irretrievable losses in the ATO zone are 48 units of armored weapons and equipment.
To compensate for the losses of the armed forces of Ukraine in armored vehicles and build up its forces and means, since 2014, funding has been significantly increased and unprecedented measures have been taken, including the ban on exports and redirection of armored vehicles already ready for shipment to a foreign customer to Ukrainian law enforcement agencies.
At the same time, the more than threefold increase in the dollar exchange rate against the hryvnia, the rupture of traditional cooperative ties with Russian enterprises, the general deterioration of the economic situation and the loss of a number of factories remaining in the territories of Crimea and Donbass not controlled by Kiev, offset the efforts made. The expected significant increase in the number, and even more so the quality of armored vehicles in the Ukrainian troops did not happen. However, at the initiative of state and private enterprises, as well as due to low-based imports, the nomenclature of the operated armored vehicles has significantly increased, which has aggravated the already difficult provision of the anti-terrorist operation in the Donbas.
To assess the scale of the problems of logistical and logistical support of armored units of the Ground Forces of Ukraine, even an incomplete list of operated armored personnel carriers allows: upgraded BTR-60, BTR-70, BTR-70Di-02 "Svityaz", BTR-80, BTR-3 with Iveco engine, BTR-3E with Deutz engine, BTR-3E with UTD-20 engine, BTR-3DA/70, BTR-3E1U, BTR-4E with 3TD engine, BTR-4E with Deutz engine and BTR-4MV, etc. A similar picture is with infantry fighting vehicles, which have undergone numerous upgrades, and tanks, which have four main types (T-64, T-72, T-80 and T-84U "Oplot") and more than a dozen of their modifications. Equally difficult are the measures for the training and retraining of personnel necessary for the operation of such a diverse fleet of military equipment.
Even the significantly increased hryvnia budget of the Ministry of Defense of Ukraine and other law enforcement agencies was used extremely inefficiently, and often even plundered, which led to regular disruptions in the implementation of planned indicators of the Ukrainian state defense order. So, the former chief of the General Staff of the Armed Forces of Ukraine Viktor Muzhenko, already being retired, said that the actual execution of the State Budget did not exceed 30%. Ukrainian experts explain the problems with the implementation of the state Budget by inept management of the industry and rampant corruption, but, first of all, by the hostile influence of "Russian agents". Meanwhile, it should be noted that none of the export contracts that brought hundreds of millions of dollars, and almost all state contracts, would not have been fulfilled without the supply of Russian spare parts and components, which, despite the prohibitions imposed by the Ukrainian authorities in 2014, were supplied both directly and through a chain of intermediaries.
Indicative is the history of the light armored vehicle TKBM "Dozor-B" (4×4), developed by the A. A. Morozov KKBM back in the early 2000s (the first prototype was manufactured in 2006). After numerous scandals and trials, the Lviv Armored Plant still released in 2016 an experimental batch of ten machines "Dozor-B". After that, the Ministry of Defense of Ukraine in 2019 concluded with the NPC "VK Sistema and the Polish company Mista have a contract for the purchase of 25 Oncilla 4×4 L2014-UD armored combat vehicles, which are a modified version of the same Dozor-B vehicle, at a price of UAH 8.3 million per unit. The Polish company received documentation for their production through the Cyprus Lacenaire Limited.
Within the framework of the Ukrainian state defense order, a number of state contracts were concluded between the Ministry of Defense of Ukraine and the Kiev Armored Plant with an estimated value of UAH 587.4 million for the manufacture of 38 BTR-3DA armored personnel carriers by July 30, 2019.
According to the plant, it successfully fulfilled the state defense order of 2017, transferring 51 new armored personnel carriers BTR-3DA to the armed forces, the National Guard and other law enforcement agencies of Ukraine.
According to the Minister of Defense of Ukraine, in 2016 The Kiev Armored Plant supplied 26 BTR-3DA armored personnel carriers instead of the required 42. Deliveries of new BTR-3DA in 2018-2020 were not reported. By the end of 2019 The Kiev Armored Plant carried warranty obligations for a total of 44 issued BTR-3DA. At the same time, specialization in the nomenclature of manufactured and repaired equipment was completely violated. So, KBTZ was included in the official register of performers of the following works: in April 2015 - on the BTR-3E1 (B1332A.TU), in May 2015 - on the T-72UA tank (77.184.1050.00.000TU), in November 2015 - on the BTR-3DA (B1352TU), in May 2018 - on the T-72AMT tank, in August 2020 - on the BTR-80 (TU 05.5903.069UR), in December 2020 - on the T-64 tank (447A.UK). In the summer of 2021, the plant fulfilled two state contracts for the capital (regulated) repair of the BTR-80 for the Ministry of Defense of Ukraine, which were previously handled by the Nikolaev BTZ.
For three years in a row, the Morozov Design Bureau did not fulfill the 2016 contract for the supply of 45 BTR-4 to the Ministry of Defense of Ukraine, which forced the postponement of the contract until August 31, 2020. At the same time, it was again claimed that the import substitution of Russian spare parts for the BTR-4E is almost complete.
All this significantly adjusted the plans originally announced in Ukraine: to release 40 Oplot tanks in 2015, and in 2016 to reach the level of their production of 100-120 units per year; in 2014-2015 to produce 150 wheeled combat vehicles "Dozor-B"; by 2020 to fully equip two AFU brigades with 300 units of BTR-4 alone; to put into service a new infantry fighting vehicle based on the T-64 tank, etc.
The most massive type of APU tanks is still the T-64, which serves as a platform for numerous upgrades. It was reported that the Kharkiv Armored Plant has already handed over to the Ukrainian army more than 100 modernized T-64 samples of 2017, simultaneously preparing a new version - T-64BM2. In parallel, the A. A. Morozov HCBM developed its own version of the modernization of the T-64 within the framework of the Crab R&D.
Import substitution
By the decision of the National Security Council of Ukraine of August 27, 2014 "On measures to improve the state military-technical policy", put into effect by the Decree of the President of Ukraine dated August 27, 2014 No. 691/2014, the export and import of military and dual-use goods to and from the Russian Federation was prohibited, therefore, the tasks of import substitution of Russian products, the share of which in some products exceeded 50%, became extremely urgent. Budget funds were allocated for these purposes and the corresponding ROC was ordered. It should be noted that "import substitution" in Ukraine refers to the process of replacing Russian supplies not so much with products of its own production, but with other imports, primarily of Western origin.
It was also reported about the success of import substitution on the BM "Oplot" tank: of the 140 positions that required replacement at the end of 2014, 130 were replaced by the end of 2015, and the remaining 10 were supposed to be "closed" in 2016. However, despite the optimism of the figures given in official reports, in reality, according to the KKBM, more than 5% of Russian-made parts were preserved in the BM "Oplot" design for 2021, complete replacement of which is expected no earlier than 2023 as part of the implementation of the "Bastion" ROC.
Other problems of the Ukrainian defense industry remain the continuous smuggling (primarily from Russia), the use of counterfeit products and the overhaul of the found remfund, the purchase of which has been established around the world by Ukrainian private and state structures. The process of "import substitution" in Ukraine eventually resulted in a banal replacement of the import source, which is not always legally flawless and meets the quality requirements.
Thus, the Ukrainian armored industry is still mainly engaged in the development of the Soviet heritage, without producing a single new tank for its own needs. Several hundred new armored personnel carriers BTR-3 and BTR-4, released in the period from 2014 or requisitioned from export supplies, also did not become the basis of the fleet of armored vehicles of Ukrainian law enforcement agencies. At the same time, the number of imported equipment of both Soviet models (BMP-1, MT LB, 2C1, etc.) and foreign ones (Oncilla, Saxon, HMMWV, etc.) is gradually increasing, actually to the detriment of the production and design potential of Ukraine.