Russia is reportedly still facing delays and issues with its shipbuilding programs over six years after it announced the results of its first round of investment quota auctions.
Russia first introduced the idea of tying access to fishery quotas to investments in new vessels or processing facilities in 2016 before approving of the idea in 2017. Companies that won auctions to lucrative crab-fishing quotas were tasked with building a new fishing vessel within five years, with the added requirement that any vessel built for the program had to be built within a Russian shipyard.
Now, as the end of 2024 is just over a month away and the program is already a year past its final due date, the industry is still waiting on the majority of its vessels. Russian shipbuilders were originally contracted to build 64 fishing vessels and 42 crab-fishing vessels for a total of 106 vessels. Currently, Fishnews reports, shipbuilders are nowhere close to that total.
“To date, the construction of 32 vessels under the first stage of investment quotas has been completed,” Federation Council Committee on Agriculture, Food Policy, and Environmental Management First Deputy Chair Sergei Mitin said during a 21 November federation council meeting.
Mitin added that with the delivery of the crab-fishing vessel Andrey Basargin in the second stage of the crab quota auctions – which ran in 2023 – Russian shipyards have delivered 33 vessels across the entire program.
According to Fishnews, in 2024, Russian shipyards were supposed to deliver 19 new vessels, but so far, only 11 have been delivered. The Ministry of Industry said it expects three more vessels to be delivered by the end of the year; however, even with that addition, the industry is well behind the original five-year deadline.
Earlier this year, the Russian government issued a decree stating the original five-year deadline is now a seven-year deadline – so long as companies give a RUB 1 billion (USD 9.6 million, EUR 9.2 million) bank guarantee.
During the federation council meeting, Russian Deputy Minister of Agriculture Maxim Uvaidov said some of the main problems with the first stage of quota auctions stem from shipbuilders that are part of the state corporation USC, or the United Shipbuilding Corporation. As of 2020, 39 of the ships scheduled to be assembled were being built by USC.
According to Uvaidov, those shipyards are still waiting on funds allocated by the government to continue working on the fishing vessels. Private shipyards, however, have managed to make continued progress.
"Everyone continues to build systematically and find contact with our customers, with fishermen, and I can say that they often solve all the problems without our help," Uvaidov said.
A representative of the Ministry of Industry and Trade is forecasting that an additional RUB 9.2 billion (USD 88.5 million, EUR 84.2 million) will be delivered to shipyards “by the end of this year,” but according to Fishnews, that total will be well under the amount needed to solve the financial problems.
Admiralty Shipyards General Director Andrei Bystrov said the shipyard lacks the funds to complete the last four large-tonnage fishing vessels, which he estimated will cost RUB 17 billion (USD 163 million, EUR 156 million).
Mitin attributed the financial issues occurring at larger shipyards to poor management and a high debt load.
"This does not paint either the Ministry of Industry and Trade or USC in a good light, but it shows that the entire system is very poorly managed,” Mitin said.
As the industry continues to wait for vessels, All-Russian Association of Fishing Industry (VARPE) President German Zverev called for the creation of a new subgroup on ship repair, according to VARPE’s Telegram channel.
“To hush up and ignore the problems of ship repair means creating a colossus with feet of clay,” Zverev said.
VARPE also said that while construction schedules continue to shift, the industry has done its part.
“The customers of the vessels are fulfilling all the conditions stipulated by the contracts,” VARPE said.
