September 5, 2013:
Russia has gone public with fears that their ambitious new warship building program may take up to five years longer. The Navy modernization plans are underway and include new equipment and facilities. New base construction is continuing in the Black Sea (at Novorossiisk, as an alternative to the old Soviet base of Sevastopol that is rented from Ukraine), the north coast (for the new Borei and Yasen class nuclear subs), and the Pacific (for the two new Mistral class amphibious ships). Dozens of new ships are on order and the navy is on schedule to complete the current modernization plans after another decade of effort, if the promised money keeps coming.
Money is not the big problem. The inability of the Russian defense industry, especially the ship yards, is. This problem is not a secret, the extent of it, however, is generally unknown. The public got a hint three years ago that something was very wrong. In 2010, the government announced its decision to buy four Mistral amphibious assault ships from France. This was just the beginning, as the Russian Defense Minister made it clear that Russia would seek more Western weapons and military equipment. Russia was planning to spend over $600 billion in the next decade to replace aging Cold War gear. The Defense Ministry insisted that the Mistral deal was but the first of many. Russia already had a deal with Israel, to build a factory in Russia to build Israeli UAVs under license. Similar deals were made with other Western suppliers for armored vehicles from Italy and various bits of technology from other Western nations.
The problems with the Russian defense industry are many. They include a shortage of skilled workers and competent managers, as well as corruption, very poor quality control, and a tradition of ignoring complaints from users. Changing these Soviet era habits has proved extremely difficult. There are simply too few competent Russian managers (in general) and fewer still willing to work in the defense industries. Same deal with skilled workers. Even during the late Soviet era the defense industry was regarded as a refuge for over-paid and corrupt incompetents. Imposing Western ideas like warranties and financial controls didn't work. The warranties were not honored and the financial controls were seen as an interesting challenge, not a new tool to aid management.