Vladimir Kozhin: S-400 contract with Turkey signed, about to be executed

This past summer was very eventful in the military-
technical sphere. First and foremost there were three
major international weapons shows – Army-2017,
Moscow aerospace show MAKS, and International
Maritime Defense Show (IMDS-2017), where despite
Western sanctions Russia signed a number of major
contracts and intergovernmental agreements.
Russian presidential aide for military-technical
cooperation, Vladimir Kozhin, reviewed the results of
these events, the conclusion of a number of major
military-technical contracts, including those with
Turkey for the supply of S-400 air defense systems
and also promising agreements in that sphere that
may materialize by the end of 2017 in an interview
granted to TASS.
- Did Army-2017, MAKS-2017 and IMDS-2017 rise to
the expectations of the military-technical sphere
captains and the main manufacturers?
- It is true that last summer’s schedule was very
tight. We don’t have so many specialized exhibitions
each year. I can tell you right away that the achieved
results are rather high. All events received extensive
media coverage. All those who wished were able to
see our military equipment live and in action. In the
wake of the exhibitions the feeling we are on the
right track has grown much stronger. There were no
signs of isolation in military-technical cooperation. All
exhibitions gathered many foreign delegations. First
and foremost, among the participants we saw the
main or most promising potential buyers of weapons
and military equipment. Of course, there were
countries from South East Asia, Central Asia and
Latin America. Quite a few meetings and negotiations
were held.
Now, some facts and figures. Army-2017 attracted
114 delegations. This is not exactly what can be
called isolation, right? There was a very tight
business program not only from the standpoint of
meetings and talks. There were sessions of three
inter-governmental commissions for military-technical
cooperation with Bolivia, Sudan and Kyrgyzstan. A
new inter-governmental agreement on military-
technical cooperation with Niger was concluded. The
total value of contracts signed at the Army-2017
forum in Kubinka reached about $300 million. This list
includes the supply of Sukhoi-30SM planes to
Kazakhstan and of helicopters Mi-171Sh to Burkina
Faso and a number of other agreements.
As for the combined effect of all three summer
exhibitions, I should also mention the contracts to
provide helicopters for China, several extra contracts
complementing the previously concluded agreements
to sell military equipment to Zambia and a number of
arrangements for post-sale maintenance of our
hardware, including aircraft. For instance, with
Malaysia. In a word, contracts, agreements, protocols
and memorandums on military-technical cooperation
concluded last summer are many and their
geographic scope is a reason for optimism.
Incidentally, our exhibitions were attended by some
countries that in the current political situationmight
stay away by all odds, because they are members of
NATO. For instance, with Bulgaria an agreement was
concluded on the repairs and maintenance of
helicopters being used in Afghanistan.
- What can you say about the European exhibitions, for
instance, Le Bourget, in the context of the continuing
sanctions? Did Russian companies feel isolation?
- At such events a great deal depends on the
organizers. At the latest Le Bourget show our
delegation was present as a full-fledged member. It
conducted negotiations with the partners it was free
to choose. But there is also Britain’s Farnborough,
for instance. Its organizers’ stance is different, so we
preferred to refrain from participation in the latest
British air show of our own accord.
- What most significant events would you single out at
the three Russian shows?
- As I’ve already said, there was an important inter-
governmental agreement with Niger, which paves the
way for our further cooperation. It is possible
conduct no end of negotiations, but as long as there
is no basic document words will remain words. We
signed a fundamental agreement with Niger. It is a
large African country with a vast potential. Specific
work on its requests is about to begin.
On the sidelines of the Army-2017 show there was a
meeting of the observer council of our joint venture
with India that manufactures Brahmos missiles. The
venture’s future development and guidelines for the
promotion of its products to the market were
discussed. As for the specific contracts concluded at
the summer shows, I’ve already mentioned the most
important of them. Quite a few remarkable
memorandums were signed with Israel and Malaysia.
They precede contracts proper. But at the same time
they are rather important and many of them
incorporate the parties’ concrete liabilities, and not
just fine intentions.
- Russia’s victory in the bidding contest to provide
Ka-52K helicopters for Egypt’s Mistral amphibious
assault ships made headlines last summer. What about
the other equipment for the helicopter carriers? When
do you expect the conclusion of contracts for
helicopters and other military technologies?
- Let’s talk about helicopters first. It is true, we won
the context , but that does not necessarily mean that
a contract is signed instantly, although huge piles of
work have been handled and everything is pretty
close to the moment when the Ka-52K contract will
be inked. I do hope this will happen soon. It goes
without saying that without the navigation equipment
and command and communication centers the
helicopters may have problems with keeping in touch
with the ship.Talks on this theme are in progress, but
at this point I cannot yet say that there is a contract.
One should take note of our advantage over
competitors, bearing in mind that the helicopters are
of Russian manufacture. The Mistral ships were
custom-made to accommodate our helicopters. We
hope that the talks will yield positive results.
- There has been much talk about the provision of
project 11356 frigates for India. When will Russia and
India come close to concluding this contract? What
power plants will be installed on the frigates to be
built at an Indian shipyard? The Russian Navy’s
Deputy Commander for Armaments, Viktor Bursuk, said
that a second troika of these frigates would be built at
the Yantar shipyard for the Black Sea Fleet, although
the original intention was to sell two of the three to
India. Will you please explain how will it all look like in
the end?
- As far as these frigates and their delivery are
concerned, we hope that all final contracts will be
signed by the end of this year. Under the terms of
the contract we are to build the frigates. India is to
purchase the power plants on its own. We know that
the power plants will be Ukrainian, but that’s the
customer’s realm of responsibility. India confirms
that it is moving in this direction. We will honor our
obligation regardless of the circumstances. I would
prefer to say nothing about the state defense order
or comment on what Defense Ministry officials say.
These two themes are in no way related with each
other.
- You said that Indonesia, the Philippines and Thailand
would like to purchase Russia’s project 636
submarines Varshavyanka. At what stage is the
negotiating process at the moment? And when will it
be possible to say specific contracts may be
concluded?
- It is true that the Philippines, Indonesia and
Thailand have taken interest in these submarines.
Their technical parameters and the price-quality ratio
as they are, these submarines are among those most
in demand in the world. Negotiations with all three
countries are underway, but it is too early to say that
a contract with any of them may be signed tomorrow.
It should be remembered that a submarine is much
more complex than a battle tank. Building it is a time
and effort-consuming process. Also, the customer is
to have a special infrastructure where ships of that
class are based. The process is not a fast one, but
the talks proceed. There is hope that in the future we
will forge specific agreements.
- Although our submarines are one of the best, the
share of naval technologies in the overall contract
portfolio is not as great as we would like it to be.
What’s the outlook for promoting our naval
technologies to new countries and regions? What
might help build up its share in the overall export?
- For now naval technologies come second after
aircraft, ground systems and air defense weapons.
This concerns the annual amounts and the effective
contracts. I believe that this trend will be changing
because the prospects of marketing these
armaments are very good. Practically any littoral
country needs its own effective naval force. Some
countries’ existing fleets require upgrading. Without a
naval force it is impossible to protect the maritime
border well enough or fight against piracy and
poaching. Many countries have realized that
protecting their offshore areas is entirely their own
business. Naturally, there is great interest in naval
technologies around the world and it will keep
growing. We are holding many talks with various
countries. There are such traditional partners as India
and China, and also Indonesia, Thailand, the
Philippines, some African countries and so on and so
forth. Some would like to have our equipment right
away, but there are problems with resources. Various
payment schemes are being discussed. We are
considering and analyzing them. Currently we have
the full range of naval technologies on
offer: submarines, frigates, patrol ships, speed boats
and mine sweepers. There are all reasons to expect
that that share of naval technologies in our export
structure will be growing. According to our estimates,
in 2017-2025 Russia’s export of naval hardware may
be up to $40 billion.
- Next, to aircraft. You’ve said that a contract with
Kazakhstan has been concluded for Sukhoi-30SM jets.
Earlier, Kazakhstan declared the purchase of twelve
such planes. How will it all work?
- It is true that this framework contract was signed at
the international military-technical forum Army-2017.
It will be implemented within the framework of the
2013 treaty on military-technical cooperation between
Russia and Kazakhstan, which envisages direct
interaction between the Irkut Corporation and
Kazakhstan’s government-run enterprise
Kazspetsexport. Under the terms of the contact it
will be implemented step by step starting from the
moment of its first delivery.
- A few words about another major aviation contract
then. Rosoboronexport has already said that MiG-29
planes have begun to be delivered to Egypt. Photo
news sections on some Egyptian websites confirm
this. Official information on that score is scarce,
though. When will this contact be implemented?
- Quite right. The contract has been signed. Some
fighters have been delivered to Egypt already. About
fifty planes will be provided over a period of several
years. Everything will depend on the manufacturers’
capabilities. I am certain that we will cope with our
contractual obligations on time.
- There have been conflicting reports about the
contract with Indonesia for Sukhoi-35 jets. Wouldn’t
you explain where these talks are at the moment?
When can one expect the contract to be signed and
how many planes would that country like to have?
- Our partners there wish to have a dozen planes. The
situation looks like this. Indonesia has adopted a new
law on the purchases of military products. It says
that there must be a large offset component. India is
pushing ahead with the Make in India program.
Indonesia is proceeding in the same direction.
In fact, this project is a pilot one for the Indonesians
and for us, too, from the legal point of view. We are
well aware that the contract is now in the active
development phase. We’ve made more than half of
the way, but the contract has not been signed yet.
Different payment options are being discussed at the
moment. They have offered to pay for part of the
contract with return suppliers. This procedure is
always rather complicated, but I believe that we will
agree with that to a certain extent. They have
formulated their proposals. We have them and are
studying them. I do hope that the contract will be
inked before the year is out.
- Of all items on the agenda of Russia’s military-
technical cooperation with other countries the S-400
contact with Turkey drew the greatest attention, didn’t
it? Opinions differ. Even high-ranking officials make
conflicting statements. But nobody has said for certain
if there is a contract or there is none. Couldn’t you
please explain what the main problem is and what
stage are the talks at now? Have an agreement been
achieved and a contract concluded?
- The contract has been signed and it is about to be
executed. As you may know, S-400 is one of the
most complicated systems consisting of a large set
of technical components, so there are quite a few
nuances. I can merely guarantee that all of the
decisions made under this contract strictly agree with
our strategic interests. In that connection we find
quite natural the reaction of some western countries
that have been trying to put pressure on Turkey.
Incidentally, I would like to point to one significant
circumstance: there is a waiting list of likely buyers
eager to have this system.
- Who is there in this queue of potential buyers?
- Southeast Asian and Middle Eastern countries and
some CSTO member-states. There are many
applications. A number of countries have taken
specific interest in that system. But one should
remember that it is a very expensive item of military
hardware and far from everybody can afford it. The
current contracts for these systems keep the
manufacturers fully busy.
- Lately, remote-controlled systems have been
mentioned ever more often. What is the share of
drones in Russia’s export and will it be growing?
- Yes, we do have plans for building up their share.
More than 50 applications are being worked on at the
moment. I cannot say that we are one of the
industry’s leaders, though. The United States and
Israel are ahead, but Russia will certainly catch up.
The Americans are developing not just
reconnaissance systems meant for situation
monitoring, but also attack systems on the basis of
drones. We are carrying this kind of work, too, and
already make a variety of unmanned systems. Also,
we are holding talks with Israel over the possibility of
some joint projects. In the overall amount drones
account for no more than 2%-3%, but the share will
grow considerably when a large variety of newly-
designed products are about to begin to be batch-
produced.
- Now, let’s move on to the next point – equipment
for the ground forces. First of all I would like to ask
about the contract for selling 64 T-90S/SK tanks to
Vietnam? How is the work on it proceeding?
- The contract for providing T-90S tanks to Vietnam
was signed last March and it is being implemented.
The dates will depend mostly on the manufacturers.
- Will a contract for selling the T-90MS/MSK tanks to
Kuwait be signed this year?
- The contract has not been signed yet, but I reckon
it will materialize by the end of this year, bearing in
mind the partners’ great interest and the active
negotiating process.
- Are there any plans for more major events this year,
something participants in military-technical cooperation
and all those who keep an eye on this sphere may be
looking forward to? Exhibitions, inter-government
commissions, or major visits?
- As far as exhibition activity is concerned, the Dubai
air show will be the largest event in the remaining
months of this year. Russia has always taken an
active part in the show, because the United Arab
Emirates is our partner. Some major contracts with
the UAE are being drafted and fundamental talks are
underway with Saudi Arabia. By tradition we present
the whole range of weapons at this exhibition.
Bahrain this autumn will host a new regional
exhibition and conference on security BIDEC (Bahrain
International Defense Exhibition and Conference).
Russia’s international show Interpolitex will be the
last one on the list of 2017 exhibition activities.
As far as other significant events in the military-
technical sphere are concerned, by the end of year
there are to be meetings of inter-governmental
commissions, committees and working groups with
Armenia, Jordan, the United Arab Emirates, Iraq,
Cuba, Cyprus, Serbia and a number of African
countries –as a matter of fact we have some events
every month.
- What contracts with the United Arab Emirates are
due?
- The media have already mentioned some projects
for cooperation in the sphere of armored vehicles, air
defense and aviation. As soon as there are
agreements, we will announce them.
- In what way has the operation in Syria influenced the
export of Russian weapons?
- Those well familiar with our hardware have been
able to see its merits once again. Possibly, the
demonstration of our weapons’ effectiveness in real
combat conditions was thestarting point in making
some fundamental decisions, including those in favor
of purchases.

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