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By John Helmer in Moscow

Russia’s state-aid agent for struggling shipyards, the United Shipbuilding Corporation (USC), is to have another chief executive after the current one, Alexander Buzakov (right figure), was ordered out by the chairman of USC’s board, Deputy Prime Minister Igor Sechin (left figure).

A newspaper leak, published in Moscow on Monday, reporting that Buzakov had aroused Sechin’s ire, without identifying the cause, has mystified St. Petersburg shipyard sources. One told Fairplay that poor financial control may be one of the reasons. Another suggested that the new holding is unwieldy, and impossible to put on a sound financial footing. The shipyard union in Kaliningrad and a St. Peterrsburg shiping expert say they believe Buzakov is being scapegoated for trying to halt the diversion of state cash through the corporation.

Buzakov is one of a series of USC executives who have failed to stay for more than a few months at a time. As a holding, with state budget money and financing subsidies, there is predictable tension over the future of Russian shipbuilding, and who is to pay for it. Policy clashes have been common between the federal cabinet ministers in charge of the sector; between the defence establishment and the civil shipbuilders; and also between the chief executive and the yards comprising the group. These include Admiralty, Northern, Sredne-Nevsky — all of St. Petersburg — Red Sormovo of Nizhny Novgorod, and three Kaliningrad yards — Amber, Ayr, and the 33rd Ship-Repair Plant. Moscow maritime analyst Alexei Bezborodov told Fairplay the Baltic coast yards are “literally out of control. There is no practical reason for their existence.”

Shipyard workers in Kaliningrad have told Fairplay they suspect that state funds paid into USC have been diverted, as unpaid wage arrears have been accumulating, and Kremlin promises to pay have been issued publicly, but have fallen short. According to a maritime union source in Kaliningrad, the USC structure “has turned into an easy way to spend the government’s money, instead of paying salaries to workers and maintaining the yards. In the beginning of the year, the delay in salary payments [for Kaliningrad shipyard workers] was four to five months. Only in May, after a series of protest meetings, did we start receiving the money. A week ago, we received the August salaries; yesterday [November 2] we received those for September. On September 28, [President Dmitry] Medvedev visited the [USC] Western Centre of Ship-building, and we were promised the salaries [on time]. But when he left, everything stopped again”.

The shipyard sentiment favours Buzakov. But according to the union sources, he has told them that, despite his efforts, he “doesn’t have the methods or the powers to apply pressure at the Defence Ministry”, where part of the funding for OSC and the naval order-book are controlled. Buzakov’s firing is viewed by the yard union as the result of “a struggle for power inside the corporation.” The union says it has been told by OSC security men not to hold public protests. “We have tried to explain to them,” said the union source, “that the shipyards belong to the state, not to the managers, but they won’t listen. The yards end up participating in competitions to get orders, but then what is the point of creating the corporation? It does not control the money; it doesn’t pay salaries. And the competitions are another ground for bribery.”

A St. Petersburg shipping source said Buzakov is being made a scapegoat for the failure of the Kremlin to revive shipbuilding. Before his appointment last year to the USC post, Buzakov had been head of the Northern Shipyard, and before that Sredne-Nevsky. “Buzakov was highly professional shipbuilder,” the source said. “He was able to manage equally well construction of warships and of tankers for Lukoil and Sovcomflot. He was against mismanagement — an honest man. This attack on him is a tragedy.”

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