• 2022 January 20

    Third attempt of Severnaya Verf to get new shipbuilding facility

    According to information obtained by IAA PortNews, Severnaya Verf, a shipyard of United Shipbuilding Corporation (USC), cancelled its agreement with yet another company contracted for modernization of the shipyard planned for implementation back in 2015 and valued at RUB 7.8 billion. Between 2017 and 2019, the works on construction of a new covered shipbuilding slipway was conducted by Metrostroy, from 2020 – by OST Group, a supplier of Rostech. Shipbuilders say both contractors failed to meet the deadlines. The works were to be completed in September 2019, but the delivery was postponed and now the shipbuilding company expects its facility to be put into operation in 2022 and take over part of the production load from the existing facilities. 

    In the end of 2021, Severnaya Verf cancelled its contract with OST because of disruption of deadlines on delivery of new shipbuilding facilities, the shipyard told IAA PortNews. “We have fulfilled our obligations but the works have not been completed so far”, emphasized the shipyard. OST has not responded to IAA PortNews’ inquiry about a possible initiation of legal action to challenge the customer’s decision in court. USC does not comment on the issue. 

    Modernization of Severnaya Verf has been discussed from 2015. Under consideration was a dry dock construction and a purchase of an overhead Goliath crane of 1,200 tonnes in capacity but those plans were rejected due to the shortage of financial resources. Finally it was decided to build a covered shipbuilding slipway with a shipbuilding slab and then, at the second phase, build a fitting out dock and a hull plating shop.

    In autumn 2020, basing on the results of the closed competition, Severnaya Verf signed a contract with OST on further implementation of Phase I works including construction of two level shipbuilding slabs of 250х100 m covered by a 73.5-meter high structure with overhead cranes of 350 tonnes in capacity. The new facility is intended for building civil and military vessels with launching weight of up to 25,000 tonnes.

    OST used to operate on the construction site having replaced the previous general contractor, Metrostroy OJSC. 

    In summer 2020, Igor Orlov, General Director of Severnaya Verf told Kommersant about the purpose of the shipyard modernization financed under the federal targeted programme on development of defense industry complex: “A 250х100 meter covered shipbuilding facility can be used for construction of long and wide ships. Given our focus on defence products, we currently have very narrow shipbuilding facilities with the width restrictions even in the segment of fishing ships. The new facility will be able to accommodate one wide ship or two smaller ones”. The new shipbuilding facility is supposed to be used for construction of 22350М frigates as well as corvettes.

    Severnaya Verf earlier said the construction would be finalized in 2021 with the delivery scheduled for 2022. According to IAA PortNews’ source of information, the shipyard still hopes to take the delivery in 2022. 

    The new shipbuilding facility is to take over part of the production load from the existing ones thus allowing to meet the deadlines for implementation of orders, says the shipyard’s report for 2020. At that time the shipyard was simultaneously building 7 frigates, 5 corvettes and 11 civil ships (4 long-liners and 7 trawlers). 

    USC Head Aleksey Rakhmanov commented following the cancellation of the contract with Metrostroy: “We do not want to award such a complicated and crucial project to unreliable companies or scammers any more”

    In his interview with Kommersant in the end of 2021, Aleksey Rakhmanov blamed the 5-months delay of works on the contractor “which had undertaken heightened obligations and failed to fulfill them”. USC Head emphasized that the company turned into a prisoner of the situation with rising metal prices. According to OST, Aleksey Rakhmanov says, the contract is undervalued and a new expert evaluation is needed. 

    “It is one of the key investment projects of USC because the construction in covered facilities is proved to raise labour productivity by 15–25%. Then the Severnaya Verf will undergo modernization of its hull-plating shop, welding equipment and storage facilities”, said Aleksey Rakhmanov. 

    The first contract between Severnaya Verf and Metrostroy was worth RUB 6 billion. By the moment of termination the contractor complete works worth about RUB 2billion, IAA PortNews was informed. By the second competition, Glavgosexpertiza, Russia's Main Department of State Expertise, approved the value of works at RUB 7.8 billion including RUB 1.6 billion allocated in 2020 and RUB 6.2 billion – in 2021, according to the state procurement portal. Actual scope of implemented works is not known. 

    The new competition is still to be announced. Yury Fedyukin, Managing Partner at Enterprise Legal Solutions, says that Severnaya Verf will have to define a new supplier and take into account the scope of works fulfilled and delivered by ex-contractors when defining the new contract value. Since the company’s procurement is regulated by the federal law No 223-FL, it is quite free in signing contracts with a sole supplier or with a sole bidder, says the expert. In other words, if the newly announced competition has only one compliant bidder, a contract will be signed with it. It can take 1.5-2 months to define a new general contractor, says Yury Fedyukin. 

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Yana Wojciechowska