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Interview with the CEO of the Northern Shipyard

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The online publication Delovoy Peterburg, under the heading "The head of the Northern Shipyard: "It's sad that we were late with the modernization of our shipyards," published an interview with Igor Orlov, General Director of PJSC Shipbuilding Plant Severnaya Verf (as part of JSC United Shipbuilding Corporation). His statements in the interview, in particular, demonstrate the sad state and vague prospects of the modernization process of the Northern Shipyard.

The head trawler processor "Captain Sokolov" of project 170701, built at PJSC "Shipbuilding Plant "Severnaya Verf" (part of USC) in St. Petersburg for the fishing holding "Norebo", at the testing stage, October 2023 (c) paluba.media

The Northern Shipyard has perhaps the largest package of contracts in Russia for the construction of ships under the investment quota program. These are 10 processor trawlers and four longline catchers. Igor Orlov, General Director of PJSC Shipbuilding Plant Severnaya Verf, spoke about the problems of the industry, litigation with European suppliers and the upcoming modernization of DP.

The Northern Shipyard, like others, faced difficulties in the construction of civilian vessels. What was the reason?

- We have overcome a huge number of difficulties at different stages. Everything gathered: external factors, managerial factors, and many others. And the current situation with economic sanctions obviously affects shipyards more than investors in the fishing fleet.

They made all possible mistakes at the time: they started building "everything at once", launching projects in a short time, having a very small package of documents to start. After all, the shipyard did not have working and design documentation for any unit of the vessels that it undertook to build. I left shipbuilding for a while (from 2012 to 2020 I was the governor of the Arkhangelsk region. - Ed.), and when he returned, he was faced with a new concept - "design documentation of a vessel under construction", or, abbreviated, a DSP. I cannot explain how it was possible to sign a contract for the construction of a series of vessels based on it, without being able to return to the valuation in the future.

According to all the documents that are available today, any deviation from the DSP must be agreed with the customer. Moreover, it is possible to make changes to it only through the customer's contract with Rosregister. And besides, he often "holds" some of these changes and "does not let" them into the register, having an additional lever of pressure on me. And I can't show the vessel to the register, since these changes have not been carried out through the PSP. Here are the figures on yarusolov at hand: the delay in the release of documentation since the start of construction is a year and a half. The number of changes made to the DSP is more than 600. Plus, the level of equipment replacement during construction in the engine room of this small vessel is more than 30%.

I remember well that when I worked with complex projects on the Asterisk, the contract took 200-250 pages, plus there were about 600 pages of applications. Now the contract for the construction of one of the vessels for fishermen is 46 pages, together with appendices.

You can talk about our shipbuilding as much as you like, criticize - and, of course, justifiably - but in an effort to participate in this investment project and solve an important state task, you need to find a solution to this interweaving of intractable problems. Yes, the ships are surrendering, but it's all not thanks, but in spite.

Many customers say that in Turkey trawlers are built faster and for the money that has been agreed in advance. And also that the projects are Norwegian and it should be easy to build on them.

- They're lying. The Turks do not let the customer into any decision on the project: we will make an order - you will come for the ship. With us, the customer signs each building certificate, simultaneously entering his "wishlist" into it. This is how contracts are drawn up: they are generally interpreted in favor of the customer in everything. But in defense of the former head of the Northern Shipyard, I want to say that he signed them in conditions when he had nothing to pay people's salaries. This story has been going on in shipbuilding since the 1990s: if I don't snatch the contract now, then there will be nothing to pay with.

We have long cycles - 3-5 years, and for different types of production, which are loaded into different stages of construction. That is, the director of the plant should, while one vessel is being completed, already start a new one. I note that the marginality in shipbuilding is on average 3%. And with one such vessel, it turns out: a respected Norwegian designer schematically indicated the engine room, and 30% of what he placed there does not fit - a design error.

I already have three longline buildings ready with the same problem. The redesign of the engine room has begun - and this is the worst thing that can happen in shipbuilding: the re-placement of the platform, engines, tracing all pipes on all ships at the same time.

How did the European partners behave when the sanctions were announced?

- It was possible to assume anything, but when more than 10 million euros were paid for the supply of various equipment in the form of advances and conversations were simply stopped... We tried to establish a dialogue, to find an opportunity to pay for some other work with this money, but we saw the stone faces of our "partners" and unwillingness to negotiate. They just turned away, that's all. Later, maybe I will write in my memoirs how, under the conditions of sanctions, we handed over ships with foreign mooring and anchor devices that require the presence of chief engineers.

To be more precise, the Europeans owe us more than 12 million euros. Among the leaders is the Finnish Wärtsilä, which has received huge funds. We have advanced the delivery of three propulsion systems. In addition, I have already purchased 22 more of their installations, which needed support: solving operational issues, software, correcting comments on test results. They have not fulfilled any obligations. But there is also a fish factory, there is other equipment.

The "heirs" of the Europeans who bought their Russian "daughters" could not help you?

- They have nothing to do with this, the deliveries were made through a Scandinavian legal entity. We offered them: there is your supplied equipment, for which we have not yet fully paid. Transfer the remainder to the Russian organization so that they can help us finish everything. No. Theft in its purest form - I simply have no other definition. We have filed lawsuits in Russian courts, everything is as it should be. But the prospects are vague.

It was reported that the fishing group "Norebo" plans to take part of its unfinished fishing trawlers from the Northern Shipyard. Is it so?

- Yes, they want to take it. We have signed a contract for the construction of a series of 10 vessels, six of them are already afloat, and we haven't even really "deployed" four. Taking into account the improvements, each vessel turned out to be more expensive by a third than it was fixed in the contract. Attempts to index it have not been crowned with anything, the issue of support from the state is being resolved. Therefore, there is a delay in the timing and they decided not to build four trawlers at this stage.

Not to build at the Northern Shipyard?

- As they say, do not build at all. Life will show. There is no money offsetting here, so we will be financially responsible, which we do not refuse. We are in dialogue with the owner and the state: financially it is difficult, but not tragic.

At what stage is the construction of a new boathouse now?

- The contract with the third contractor has been terminated at the moment, he could not confirm his qualification requirements: he did not provide bank guarantees. There is even a question about the project as a whole: it had a lot of imported equipment, including air conditioning, power supply, ventilation and electrical supply systems. The former management of the United Shipbuilding Corporation (USC, it includes the Northern Shipyard. - Ed.) believed that it was possible to solve some issues in the process of completion. There was a possibility that the contractor would be able to redesign during construction. But the banks said: given that the price is obviously higher, we will not give a bank guarantee. None of the first-tier banks agreed to guarantee this project, so it did not work out.

The boathouse is our pain. There is no need to talk about the future of the shipyard without him. Plus a lot has already been spent to have it. We are in a great dialogue with the state as the main investor of this project in order to find resources for its implementation. We have found all solutions to replace imported ones. There are also status interested parties who want to enter the project, but they are waiting for confirmed funding, which is not yet available. The readiness of the facility at the moment is 38%: two spans of supports have been delivered.

Is there any news on the Project 20385 "Agile" corvette?

- The ship has been completely restored, painted, the composite superstructure has been reinstalled, there is an active saturation of equipment. I think the launch will take place no later than May 2024, and in 2025 we can transfer it to the fleet if the customer does not make amendments.

Is it already known what caused the fire?

- The investigation is not over yet. We expect that the case will soon be brought to court with charges. In its course, the amount of damage, the responsibility of certain persons and organizations will be determined. It was a grave tragedy. I can say that the composite from which the superstructure burned down at that time is made is considered a non-combustible material. I assure you that the plant is not very much to blame for this: we are assemblers, we assemble in accordance with the rules and acted strictly according to the documents that were at that moment. Now we have finalized the standards and work with composite materials and with the fire extinguishing system. Unfortunately, such an experience is also given by such difficult events.

The media reported the amount of damage of 22 billion rubles.

"That's nonsense. In fact, 22 billion is closer to the cost of almost everything "Agile". The figures that sounded then were from the field of, let's say, deep incompetence. I can say that it is more than 10 times smaller.

Did the Northern Shipyard end last year with losses?

- Yes, the shipyard is unprofitable because of the "fishermen". The state plans to subsidize us for these losses. As soon as this happens, we will be able to return to some decent financial direction.

Do you agree with the VTB head's assessment of the problems of USC, which includes the Northern Shipyard?

- It seems to me that from the point of view of express analysis, VTB President Andrey Kostin said everything correctly: managerial mistakes, mistakes on concluded contracts, lack of development of the industry in accordance with modern requirements. I remember the largest Chinese shipyards a decade and a half ago with manual and primitive labor. It is very sad that we were so late with the modernization of our shipyards. I hope that the colleagues who undertook this will be able to implement it.

Do you mean the construction of a boathouse?

- The construction of a boathouse will not solve all the problems. We will finish it and get 30 thousand tons per year at the output, but I will still have only 7 thousand tons at the input. Of course, there is a question of modernizing the rest of the chain. We have presented the concept, and it has been approved at the USC level, there is a question of its implementation. The total volume of investments is about 100 billion rubles. Against the background of how much is invested in related high-tech industries, this is not the biggest money. Kostin said that from 500 billion to 1 trillion should be invested in USC. I think that's a reasonable estimate.

What will change then?

- There will be a super-modern Northern Shipyard capable of building facilities in the interests of any customer. We have already refused several orders: I have a dock width of 25 m, a length of up to 140 m, which is very small. The same modern bulk carriers today have a length of 180 m. The country needs at least a hundred of them - and this is only one of the niches. In the new boathouse we will be able to build even "afromaks", if necessary.

Is it a fast process?

- We have planned three stages of modernization. The first one is coming now. If you "parallelize" financial resources, then this process can be completed in 6 years.

Svetlana Afonina

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Comments [1]
№1
19.10.2023 01:38
Когда контракт на "Норебо" только подписывался червячок ел навряд ли будет 10 процессоров   ,а так и получилось в готовности 6 и 4 в достройке ,а если норвежцы выкупят траулеры-процессоры чтож  теперь учитывать их как врага ? А что такое трал думаю знает любой подводник.
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