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bmpd
February 11 2023, 23:40
The cost of some Russian military aircraft, helicopters and missiles
The American online publication
“The Drive” published an interesting
article by Pyotr Butovsky and Thomas Newdick, “Here Is What Russia’s Military Aircraft And Missiles Actually Cost. We examine official documentation to decode the actual cost of some of Russia's most prominent air combat weapons." "), with data gleaned from Russian sources on the cost of a number of Russian military aircraft, helicopters and missiles.
Ka-52 combat helicopters of the Russian Aerospace Forces during a special operation in Ukraine (c) Ministry of Defense of the Russian Federation
The Russian special military operation in Ukraine in February 2022 led to a sharp increase in military spending in many countries, including Russia. While the Kremlin is generally keen to openly promote its large-scale defense programs, primarily to facilitate lucrative export sales, it is much more difficult to get a sense of how much Russia itself is currently spending on these various weapons.
However, a search of official Russian documents still provides a fascinating insight into the costs involved for at least some key defense programs. This is of particular interest in relation to those military aircraft that have participated in combat operations over Ukraine and suffered significant losses in the process, such as the Ka-52 attack helicopter, as well as in relation to some critical aircraft weapons that are being expended in the same conflict .
With that in mind, let's take a look at the prices of Russian military aircraft based on available official documents.
How much does the Su-57 cost?
The Su-57, known to NATO as the Felon, is Russia's newest fighter jet and is just beginning mass production. So far, the combat units are not equipped with them and all nine aircraft transferred to the Russian Ministry of Defense (the last four in December 2022) are at the Akhtubinsky training ground and in the Lipetsk crew retraining center.
Since June 2022, Russian officials have reported several uses of the Su-57 in Ukraine, including the use of weapons launched from its internal compartments. The head of the United Aircraft Corporation, Yuri Slyusar, said last August that “the aircraft is taking part in a special military operation, showing its best side.” It is almost certain that the Su-57s did not fly over Ukrainian-controlled territory—Russia simply would not take the risk. If they were used in combat, they launched their missiles from Russian territory.
The most reliable information about the price of the Su-57 comes from a presentation shown to Russian Defense Minister Sergei Shoigu during his visit to the Su-57 production plant in Komsomolsk-on-Amur [KnAAZ] in August 2020. According to the poster shown to Shoigu, the price of two aircraft from the initial batch (built in 2019 and 2020) was 4,700 million rubles each (including 20 percent VAT). In addition, the poster indicated a projected price reduction during the production of a batch of 76 fighters ordered in June 2019 (with deliveries until 2028); the price of one aircraft produced in 2028 is expected to be 3,192 million rubles. It is important to remember that this is the unit price for the current production aircraft and does not include R&D or pre-production costs that were previously paid for under separate contracts.
How much does the Il-76MD-90A cost?
Il-76 (Candid) is the main large military transport aircraft in Russia and the only one used in significant quantities. During Soviet times, it was produced in Tashkent in the Uzbek SSR. In 2006, the Russian government decided to launch production of an improved version of the Il-76MD-90A in Russia at the Aviastar-SP plant in Ulyanovsk. It should be emphasized that we are not talking about the resumption of production, but about the start of production of a thoroughly modernized aircraft practically from scratch in a new place. The old Il-76 equipment remains in Tashkent.
On October 4, 2012, the Russian Ministry of Defense ordered 39 Il-76MD-90A aircraft, the delivery of which was planned between 2014 and 2020. The total cost of the contract was 139.4 billion rubles, or 3,570 million rubles per unit. The price was indexed, and the price of the last aircraft, which was to be delivered in 2020, was to be 3,710 million rubles. Obviously, indexation was insufficient, since actual inflation in Russia in those years ranged from 5 to 12% per year. We know these prices from court cases where the manufacturer failed to meet deadlines; the production of Il-76MD-90A is an example of failure to fulfill all the terms of the contract.
In April 2017, the Russian Ministry of Defense admitted that the main reason for the delay was the high failure rate of the aircraft's new equipment, a significant number of changes to its documentation made by the Ilyushin Design Bureau during the production process, as well as additional requirements for the aircraft's systems introduced by the Ministry of Defense. The management of the Aviastar-SP company complained about a significant increase in prices from subcontractors. According to Russian media reports, the plant was losing a billion rubles on the production of each aircraft, and therefore demanded that the contract be renegotiated. In May 2019, the Department of Defense agreed to change the terms of the contract. However, new conditions, including price, are unknown.
How much does the Ka-52 cost?
The Ka-52 is currently the main Russian combat helicopter and is very actively used in Ukraine. By January 2023, Russia had lost more than 30 of these helicopters in Ukraine, or a quarter of the fleet of 140-145 Ka-52s that were in service before the invasion.
The cost of one Ka-52 helicopter is indicated in the financial report of its manufacturer - the Progress plant in Arsenyev - for 2021. According to this document, in 2021 the plant supplied 12 helicopters to the Russian Ministry of Defense and received 11,497 million rubles, or 958 million rubles for each helicopter in accordance with the agreement. However, the production cost of one helicopter was higher and amounted to 1,177 million rubles. This means that the production of each Ka-52 brought a loss of 219 million rubles (all prices excluding VAT).
Surprisingly, the Russian Ministry of Defense often pays a purchase price lower than the production cost. Russian industry has long been dissatisfied with this policy of the Ministry of Defense, which lowers prices. Enterprises agree to this because most often the Department of Defense contract is their only source of orders. At the same time, the Ministry of Defense has a principle of setting prices in long-term contracts without taking into account real inflation. Taken together, this means that many factories are actually selling their products below their actual cost. Later, the government tries to compensate for these losses, since it cannot allow the defense company to go bankrupt. For example, the state can pay off a company's debts to state-owned banks. For the Russian industry, this is unpleasant and not very logical. The
above price indicators are close to another value obtained from data published in April 2019 on a tender for insurance of transportation of a batch of export Ka-52E helicopters delivered to Egypt. At the same time, the cost of one helicopter was estimated at 1,102 million rubles, which at the then exchange rate was equal to $17 million. Of course, Egypt, which ordered 46 Ka-52E helicopters in 2015, paid much more for them. The insured value probably corresponds to the amount received by the manufacturer (the rest of the money is taken by the intermediary, that is, Rosoboronexport JSC, the state agency for the export and import of weapons).
How much does the R-77-1 missile cost?
The R-77-1, known to NATO as the AA-12B Adder, is the primary over-the-horizon air-to-air missile currently produced in Russia. It was developed by the Toropov-Vympel company (like all other current Russian air-to-air missiles) and is produced by the same company at its plant in Moscow. We learned about the price of the missile from a court case initiated in 2019 by the Russian Ministry of Defense against Vympel. The Ministry of Defense demanded compensation for the delay in November 2018 in the delivery of a batch of 10 R-77-1 missiles with a total cost of 299 million rubles, which means that one missile cost 29.9 million rubles in 2018 prices.
This episode also allows us to estimate the production volume of R-77-1 missiles. It was reported that the cost of the entire five-year contract with execution from 2018 to 2022 is 64,880 million rubles, which at a fixed price would be enough for 2,170 missiles, or about 430 missiles per year.
How much does the LMUR rocket cost?
The LMUR Light Multipurpose Guided Missile (or Izdeliye 305) is Russia's newest and most advanced anti-tank weapon. It has been in serial production for about five years and is used on the Mi-8MNP-2 special purpose helicopters, as well as on the modernized Mi-28NM and Ka-52M combat helicopters. It was used in combat operations in Ukraine. The missile weighs 231 lb (105 kg), twice as much as typical Russian helicopter-launched anti-tank missiles, and travels up to 9 miles (16 km), also twice as long as other Russian anti-tank missiles .
You can learn about the price of LMUR from the court case initiated by the Russian Ministry of Defense against the manufacturer - Mechanical Engineering Design Bureau in Kolomna, Moscow Region. This is due to the demand for compensation for the delay in delivery of a batch of 30 LMUR missiles in 2018. According to these documents, the cost of one LMUR missile is 14.2 million rubles (including 18% VAT).
The production volume can be estimated using the same document. The cost of the entire three-year contract (2018-2020) was 1,807 million rubles, which is enough for 127 missiles at a fixed price. The 2018 batch was designed for 30 missiles, which assumed the production of about 50 missiles per year in subsequent years.
Other prices
Unfortunately, this is where the prices confirmed in the available official documents end. In addition, we must rely on information with a lower degree of certainty.
The most expensive Russian aircraft is the Tu-160 Blackjack strategic bomber. On January 25, 2018, in Kazan, in the presence of President Vladimir Putin, the Russian Ministry of Defense signed an order for the delivery of 10 new Tu-160M bombers by 2028. After signing the contract, Putin said that the Ministry of Defense had purchased “10 aircraft, each of them for 15 billion - even more than 15 billion - 160 billion [in total].” This amounts to more than $500 million per aircraft, based on purchasing power parity.
Slightly different prices for aviation equipment can be found in insurance tenders, where the costs of insured objects are indicated. Thus, the Be-200ChS amphibious aircraft, a dual-purpose fire-rescue aircraft manufactured in 2022, costs 2,640 million rubles, and its simpler Be-200T version without a fire extinguishing function costs 2,005 million rubles.
In another document, the Mi-8AMTSh-VN helicopter in the latest, specially equipped and armed version for Russian special operations forces was insured for the amount of 1015 million rubles.
Is this a lot or a little?
Unfortunately, there is no easy way to convert the ruble prices above into more understandable currencies. Converting prices to US dollars using market exchange rates is inaccurate, as best demonstrated by the example of the Il-76MD-90A aircraft. Its price at the current exchange rate in 2012 was $115 million, and in 2020 it is only $51 million—which is clearly unrealistic. The ruble exchange rate, which is highly dependent on the price of oil on the world market, collapsed in 2014. At the same time, domestic prices in Russia have not changed that much.
It is more appropriate to adopt a conversion factor adjusted for purchasing power parity (PPP), and especially for defense PPP, instead of the general one. When using defense PPP exchange rates, US dollar prices for Russian military equipment are 1.9 to 2.3 times higher than when using market exchange rates (These values are taken from the report "Military Expenditures: Transparency, Defense Inflation, and Purchasing Power Parity" , published by the International Institute for Strategic Studies - IISS).
One unusual, but nonetheless interesting, way of estimating these costs is to convert them into the number of apartments that could be purchased for the same amount. The average price per square meter of housing in Moscow is now 300,000 rubles, in St. Petersburg – 200,000, and in other large cities of Russia – 100,000 (of course, the term “average” has many drawbacks). Thus, a typical three-room (75 sq. m.) apartment in St. Petersburg costs 15 million rubles. For the price of a Su-57 fighter you can buy more than 300 such apartments, for a Ka-52 helicopter - about 80, for one R-77-1 air-to-air missile - two apartments.
Along with the aforementioned difficulties of finding data on the cost of Russian military aircraft and missiles and then making sense of the equivalent figures in US dollars, there is also the question of how the country's defense industry responds to economic sanctions that have been imposed or tightened in some way after the invasion of Ukraine.
Back in April last year, a senior U.S. Department of Defense official confirmed to The War Zone that Russia's ability to resupply its forces was severely impacted by sanctions imposed by the U.S. and its allies. In particular, the representative noted that the ability to obtain protected high-tech components, including for precision-guided munitions, has been particularly affected. One example of this, according to Russian media reports, is the new generation A-100 Premier airborne early warning and control aircraft based on the Il-76MD-90A airframe, for which there appears to be an acute shortage of electronic components such as microcircuits .
The same senior US defense official did not specify which systems were affected by the supply chain issues imposed by the sanctions or by how much. However, he said the sanctions are exacerbating previous problems for the Russian supply chain.
Shortages of key components will likely only further increase the cost of Russian military aircraft and missiles and lead to further delays. Vympel was identified by the Ukrainian Embassy in the United States as one of “more than 20 Russian military enterprises [that] were forced to fully or partially suspend their operations due to shortages of parts and components, as well as rising prices due to sanctions.”
At the same time, the use of aviation weapons in Ukraine, such as the R-77-1 and LMUR, as well as helicopters such as the Ka-52, requires replenishment of stocks and replacement of lost aircraft. While this should be good news for Russian industry, the costs of these efforts must be weighed against the other financial demands of a conflict with no end in sight.
An analysis by Forbes Ukraine last November found that the Kremlin spent about $82 billion in the first nine months of the war, of which nearly $29 billion was allocated to support the armed forces, $16 billion on military pay and more than 9 billion dollars for the families of military personnel killed in combat. At the time, the same source suggested that the loss of Russian military equipment had cost another $21 billion.
Along with the colossal costs of the war and the fact that sanctions are driving up prices throughout the supply chain, Russia's already fragile economy as a whole looks unstable, given reports that gross domestic product output has fallen, although not as much as some had predicted.
While the Russian defense industry had previously relied heavily on foreign sales to keep its production lines running and to provide cash that could be put toward further research and development, especially in the case of the Sukhoi family of multi-role fighters, the war in Ukraine demonstrated that Russian defense exports have been hit hard, and existing contracts will be more difficult to fulfill.
“We expect them to have serious problems getting equipment [for export] because they are losing equipment in Ukraine,” a senior U.S. intelligence official told Foreign Policy last summer. Not only are helicopters like the Ka-52 now urgently needed by Russia to replace lost or end-of-life helicopters rather than for export, but the overall poor impression of Russian air power in this conflict will almost certainly make it less attractive for potential customers - if these customers are even ready to do business with Putin’s Russia.
Whatever happens next in this conflict, it seems clear that Russia's isolated position means that it will have to rely primarily on its domestic production capabilities to cover losses and replenish its weapons stockpile. We may never know how much all this will cost, but the examples above demonstrate a general lack of resilience in Russia's military aviation and military industries, and as exports dry up, the Kremlin may be forced to intervene in other ways to prop up its defense enterprises.