OREANDA-NEWS. March 19, 2009. We will discuss a number of issues linked with the development of our missile space industry, above all, the course and prospects of its technical re-equipment.

Obviously, without this we cannot effectively develop the industry that is of vast economic and defence significance.

We associate the serious plans to diversify the economy and encourage its research- and innovation-based development with the advance of space technology and recourse to the new markets of space services.

I'd like to emphasize that even the current difficulties caused by global recession do not remove strategic goals from the agenda.

We will use all resources and opportunities to preserve the industry's scientific, technical and labour potential, to conduct its accelerated technical re-equipment, and to continue attracting highly qualified personnel.

In the last two years, companies of the missile space complex have received and spent more than 21 billion roubles. I'd like to draw your attention to the fact that the industry did not receive such huge investment in the last 20 years. About half of these federal funds were spent on the production's technical re-equipment. Mr Nesterov (Vladimir Nesterov is the director-general of the Khrunichev State Research and Production Space Centre) told us today about the situation in the centre. In 2008, about 12 billion roubles were earmarked for technical re-equipment. This is a handsome sum.

I do not want to repeat in what conditions we have to live and work today, but I'd like to emphasize that the adjusted version of the budget does not envisage any reduction in the allocations on the missile space industry. All in all, almost 82 billion roubles are earmarked for it under three federal programmes.

At the same time, I'd like you to be very responsible and rational in using these substantial funds. Their use should produce tangible results.

Therefore, in line with the already determined strategy, we should continue to carry out structural reforms of the missile space industry and streamline its technological and experimental base. As a result, we should be able to greatly enhance its effectiveness and bring its management to a much higher level.

Allow me to remind you that we are planning to establish 15 integrated structures by 2015. Five of them have in effect already been established, and 10 are being currently set up.

We should adopt a rational approach to production capacities, and enhance cooperation by using free capacities of related enterprises.

We should focus on priority projects and guarantee their successful completion. I'm referring to the construction of the Angara missile complex and development of the new space equipment for navigation, communication, and the Earth's remote probing.

I'd like to emphasize again that we are determined to continue to support the missile space industry. We will help the companies wherever necessary to keep them afloat. I will speak about this in more detail later.

As you know, contracts for the production of civilian goods have diminished because of the consequences of the recession. We have just spoken about this. Current long-term contracts remain unchanged and help companies to operate and retain liquidity and financial stability but medium- and long-term orders are being reduced, which is making it more difficult for them to receive loans.

In these difficult conditions, the Government has adopted a number of additional measures to support the industry.

First, it has passed a resolution to allot eight billion roubles to the Khrunichev Centre. I have signed it today. This entire sum will be used to increase the centre's charter capital. Support for the centre means support for the whole industry, considering it and associated enterprises employ about 120,000 people.

Second, the Energomash Stock Company will receive state guarantees for up to three billion roubles.

Third, 16 of the industry's companies will receive subsidies in the established procedure and will reimburse themselves for part of their expenses on interest payments.

These include the Obukhov State Plant, the Aksion-Holding Izhevsky Plant, the Korolyov Energiya Space Corporation, and the Lavochkin Research and Production Association.

In turn, we expect top managers of the companies concerned to conduct rational and responsible policy. I have already mentioned this. The funds must be used effectively.