Russia Seeks Quick Response to JSF
The debate on the development of a warplane of the fifth generation in Russia intensified in 2001, definite attitudes to the matter evolved and various groups appeared, some holding diametrically opposite opinions. The subject of the new aircraft generation is directly connected with the Russian defense industry reform the program, which was approved in October 2001. The prospects of developing the new fighter should be considered in the context of the reform that implies the redistribution of property and is marked by a struggle for control over financial flows.
The present stage of developing aircraft of the fifth generation began in 1998 when the Russian Air Force came up with the request for proposal (RFP) for light multirole frontline aircraft. The next step was the specification of the configuration of an advanced frontline aviation grouping at the end of 2000. Then, in April 2001, the Air Force updated its requirements to the multirole frontline aircraft system (MFS). The amendment of the RFP evidently followed the rejection of the program of a multirole fighter known as MFI.
Government officials and Air Force representatives declare that a model of the new aircraft should be submitted for flight tests in 2005-2006. Evidently the draft ten-year government program of armaments provides for completing tests by 2010. The aircraft is expected to be adopted for service at the same time.
It easy to see that such a timeframe would require a revolution in aircraft-making. It took 15-20 years for aircraft of the fourth generation to develop from concept to delivery to customers in Russia and abroad. It is not clear so far what organizational, financial and technical solutions are to be applied to reverse the general world trend when the development of aircraft of every new generation takes more time than the previous, and to finish the MFS in less than 10 years.
The current state of affairs is known to the public in the most general terms. For instance, in February 2001 Mikhail Pogosyan, General Director of Sukhoi Aircraft Military Industrial Complex (AMIC) said that design work had been launched. His competitor Nikolai Nikitin, Director General and Chief Designer of RAC "MiG", has said the initial concept of the fighter of the fifth generation will be ready by spring 2002.
So far, several contradictory statements have been made in Russia about a tender for the general contractor of the project. The very term "tender" cropped up only after the press reminded the authorities that the law requires a competitive procedure of selecting the general contractor. There is no exact information about who announced the contest or when or what the deadline should be. Very different dates have been named: from September 2001 to March 2002. Like in the case of most other military programs, the procedure of selecting the contractor is not transparent.
High-ranking officials are clearly partial as they predict the victory of Sukhoi AMIC. Some analysts regard this as an example of improper lobbying. They also question the approach of the Russian Aviation and Space Agency (Rosaviakosmos), which has announced that the contract should go to the bidder with greater resources. As RAC "MiG" representatives have justifiably said, if this criteria is applied, the project should be entrusted to a major oil company.
The price of the MFS program is likely to be decisive for its future. The official stance is that the development of the aircraft will cost approximately $1.5 billion. The sum seems meager compared to US spending on its fighter of the fifth generation. Thus, even at the stage of demonstrating the concept (1993-2001) the Americans spent approximately $3.5 billion on R&D on the Joint Strike Fighter (JSF). Full-scale development and construction of a test batch (2002-2008) is expected to cost $19 billion and the price-tag of the program as a whole is estimated at $250-280 billion.
In Russia the cost of R&D and production is much lower than in the United States, of course. However, this factor that gave Russia an advantage ten years ago is losing its significance as technological equipment is aging, the headway made in science and technology in the Soviet times is fading and the average age of the personnel at design bureaus and industrial facilities is growing.
Many Russian top officials do not believe a JSF equivalent can be made for $1.5 billion. Head of Rosaviakosmos Yuri Koptev has said that even though the Russian project will be approximately ten times cheaper than the American, spending from state coffers (covering 20-22% of the costs) will run into "billions of dollars." President of the Irkutsk Aviation Industrial Association (IAIA) Alexei Fiodorov believes that the program of developing a national fifth generation aircraft will require $2.5-3 billion. A spokesman for Sukhoi said about a year ago that it would require approximately $10 billion to advance work on S-37 from an experimental model to serial production. (MFS will evidently be cheaper but the job will also have to be started almost from scratch).
The experience of France is very indicative in this respect. The program of developing the Rafale multirole fighter (approaching Su-30MKI and Su-35 in its capabilities and holding an intermediate position between the fourth and fifth generations) is estimated at FFR 40.8 billion or $6 billion. Out of that sum FFR 28.1 billion (about $4 billions) was spent on development, namely 11.1 billion on the airframe, 8.9 billion on the engine, 1.9 billion on aircraft systems, 5.5 billion on avionics and 0.6 billion on security systems. In addition FFR 12.7 billion ($1.9 billions) had to be invested in launching production: 8.9 billion in the production of the airframe, 1.75 billion in the engine, 0.75 billion in aircraft systems, 1.25 billion in avionics.
Spending on developing the Rafale airframe amounted to approximately $1.6 billion or 27% of overall spending on the program. This indirectly confirms the fact that the $1.5 billion Russian program is quite possible, if it is going to rely on developing a new airframe with high aerodynamic parameters. However, many specialists in Russia think that there is no sense building a third demonstration model (after S-37 and 1.44) by 2006.
Many experts, for instance, Yevgeny Fedosov, head of the State Research Institute for Aviation Systems, have pointed out that the airframe does not make the main difference between aircraft of the fourth and fifth generations. Instead raidoelectronic equipment, computer hardware and software as well as weaponry will make MFS a qualitatively new system. Opponents to the government program say that the engine rather than the airframe can guarantee cruising supersonic speed.
The MFS will hardly get a new engine by 2005. Yuri Koptev has already announced that at first the aircraft will be powered by advanced versions of AL-31F that are currently installed in fighters of the Su-27 family. Their modernization will cost $1.2-1.5 billion. However, it is not clear how these heavy engines are compatible with the concept of a light fighter that should have a takeoff weight of about 20 tonnes, according to official representatives.
Koptev believes it will require $600-800 million to complete work on an engine of a new generation (AL-41F) that is now 30% ready. He estimated the spending of Saturn Scientific Production Association on launching the serial production of the engine at $150 million. Clearly the government and the engine-makers do not have the money. For the sake of comparison: the United States has already spent $3.5 billion on the new basic engine for JSF and assigned $4 billion more for the continuation of the effort.
Air Force experts believe that Russia lags behind leading countries in aircraft weaponry more than in other sectors. Revolutionary solutions are needed in air-to-surface class weaponry because Russia simply does not have "a long arm" for its tactical aviation at an acceptable price. A long-range fast missile of the Novator Design Bureau is the only fundamentally new air-to-air weapon that Russia has at disposal. By 2005-2010 the situation will be more or less acceptable only with supersonic anti-ship missiles, and only if money is found to complete work on air-borne modifications of the Moskit (SS-N-22) ship-to-ship missile and the Yakhont anti-ship missile system.
Here is one example to give an idea what kind of weaponry aircraft of the fifth generation will need. Boeing Corporation is working on an ARRMD hypersonic missile for JSF (speed - 6M, range - 1,200 kilometers, serial price - up to $200,000, mission - surface and naval targets, adoption - after 2010).
Only representatives of IAIA have risked to estimate the cost of developing a new set of weaponry for MFS by publicly speaking of the need to invest $3 billion in the effort.
There is still less information about the price of the avionics program. However, work is known to have been launched in 2001 under the aegis of the Tikhomirov Instrument-Making Research Institute to develop electronically scanned phased arrays for aircraft radars. The Americans, who hope to start the serial production of such radars in 2-4 years believe Russia is at least a decade behind in the sphere.
If in the next few years all resources are channeled to the development of the airframe, the MFS will have either the same engines, avionics and weaponry as Su-30MKI and Su-35, or experimental ones and therefore unprepared for serial production.
Capabilities of the government
So far we have been dealing with the cost of the project, but it is far more important to understand how much Russia can theoretically invest in the development of aircraft of the fifth generation.
According to official reports, in 2000 the Air Force was assigned about $100 million for R&D or approximately 50% of the requested sum. If the GDP grows at 5% a year as the Russian Ministry of Economic Development and Trade predicts, allocations may rise to approximately $160 million by 2010 on condition that the share of defense spending in the national budget remains unchanged. If the decree of President Boris Yeltsin on increasing the share of defense spending in the GDP from 2.6% to 3.5% is implemented, the Air Force should get about $215 million for R&D in 2010.
The current ratio between expenditures on the maintenance of the Armed Forces and their development is 70% to 30%. If the plans of the Defense Ministry materialize, and the ratio is changed to 50%-50% in 2010, in ten years the Air Force will be spending between $250 million given the current share of defense spending in the GDP, and $350 million, if the share rises to 3.5%.
Consequently, the total government orders for R&D for the Air Force in ten years should be around $1.7-2 billion. As the size of state orders and their distribution between programs are classified, it is every difficult to estimate what part of the funds may be assigned to MFS. Let us assume that the state order will steadily grow from almost nil in 2000 and average 20% of Air Force spending on R&D in the next 10 years.
Then if the government radically changes its attitude to investments in military security, it is theoretically capable of investing $350-500 million in the MFS program. Changes in world oil prices may reduce to naught even much more accurate estimates, of course. But even if we apply a double error either way, the outlook is not very optimistic: government investments in the MFS project would be 95-98% smaller than in comparable programs abroad.
Investments from other sources
Chiefs and experts of the Russian defense industry realize the existence of the problem and suggest drawing funds from the export revenues of the aircraft industry and raising more by including foreign participants in the MFS program.
In the first case the receipts of RAC "MiG" and Sukhoi aircraft-making plants are actually in question. An analysis of their foreign currency revenues indicates that if the share of the MFS program in their investments ranges from 50 to 65%, they will be able to invest $300-400 million in the next five years. However, one cannot count on increasing or even maintaining such volumes. Closer to 2010 their key partners are likely to stop Russian aircraft purchases in their present form and concentrate on the production of Su-27 and Su-30 under license. As a result, the volume of receipts will drop by at least a half.
Even if the resources of the entire aircraft-making sector, not simply aircraft- making plants but also companies developing and manufacturing engines, avionics and weaponry, are pooled, the MFS program theoretically will not get more than $1 billion in export returns in 10 years.
The prospects of foreign investments in the project are even less certain. Russia's two major foreign trade partners are working on national programs of light fighters (China on J-10 and India on LCA). It is almost impossible to get Beijing and Delhi involved in the MFS program at the same time. Foreigners want at least an equal, if not decisive role in major projects in return for their investments. Meanwhile, the Russian military still want the fighter for the Russian Air Force to be better than its export version. If in 10 years foreign partners invest $500 million in the MFS project, it will be a tremendous success for Russia.
Thus, according to the most optimistic estimate the total 10-year budget of the program will not exceed $1.5-2 billion. Out of that sum the government will be able to contribute approximately 20-25%. It should be noted that abroad, the lion's share for comparable programs is taken from the state coffers. For instance, in the case of Rafale it amounted to 72%.
Losses and gains
Let's compare the expenditures on the development of the MFS with the revenues from its sale. If the above technique of evaluating Air Force expenditures is applied to large-scale procurements (in 2000 about $100 million was assigned to them as well as to R&D), we can predict that by 2010 $250 million to $350 million will be spent on them. If we assume, that by that time the acquisition of MFS becomes a top priority of the Air Force and about 30% of total allocations is assigned to it, the ultimate figure will be $75 million to $105 million which means the Russian Air Force will be buying 3-5 aircraft a year at best.
There are no guarantees of higher foreign demand for the MFS that will be hastily developed for 2010. True demand for aircraft of the fifth generation among foreign partners will appear in only 15 years when their quite expensive national or license projects (Su-30MKI in India and Su-27SK in China) near completion. Smaller countries interested in importing new Russian aircraft are unlikely to be willing to pay for completing the system. They will sooner prefer to wait for the inevitable "children's diseases" of the new aircraft to be cured. One way or other, real demand among foreign customers for the new fighter is likely to appear in 2015 or later.
This prompts one important conclusion: the production of the Russian MFS, if it developed by 2010, will be limited to several units a year. Such small-scale production may interest only the experimental facility of a design bureau, not a big industrial enterprise. An analysis of foreign experience leads to two other conclusions. Firstly, the cost of launching serial production is approximately equivalent to the development of the fifth generation airframe. Secondly, the purchasing price of an aircraft is usually in inverse proportion to the size of the order.
All over the world, governments play the leading role in funding programs similar to MFS. So far not a single company, not even American, has launched the production of a full-scale jet fighter at its own expense. Giant projects cannot be profitable from a narrow financial angle. They are justified only considering dividends in the form of military security. However, so far the Russian government has been reluctant to invest sufficient funds in the development of aircraft of the fifth generation.
At the same time, the MFS program, the way it is formulated by top defense industry officials now, does not guarantee the repayment of investments in the foreseeable future. We get an evident contradiction: there are plans of raising capital assets for the fifth generation from investors, but none of them is interested in the program in its current form.
There have been suggestions to resolve the problem through the accelerated formation of the Sukhoi holding that should channel the profits of its aircraft-making plants to the development of an advanced fighter. High-ranking officials believe that as KnAAPO and IAIA are reluctant to finance the program of developing MFS, they should be stripped of the role of investors, which the authorities themselves assigned to them. But whoever may act as the investor - a holding, design bureau or plant - its attitude to the problem is quite symptomatic.
There are reasons to believe that if Sukhoi after passing the stage of consolidation becomes a truly responsible investor, i.e. an entity spending its own money, its willingness to invest in the MFS program on the present terms will soon evaporate.
In this connection experts conclude that as long as the problem of investment attractiveness of the project of the fifth generation fighter is not resolved, no success should be expected.
Every man for himself
Analysis shows that fundamental positions of all aspects of the MFS program - financial, temporal, technical and organizational - remain vague and uncertain.
This evidently stems from the situation where each side or potential participant to the program pursues primarily its own aims. Their objectives are understandable and to a great extent justified. The problem is that nobody is willing to coordinate one's policy with the possibilities and needs of the other parties. What has been reported so far is merely a set of individual programs and good intentions.
Thus the Russian Air Force chiefs realize that the government does not intend to assign the necessary resources to MFS, and consequently it should support projects that imply the maximum use of export revenues. As it is clear to experts that in five years these returns will drop, the military stake on the fastest project - then at least something will remain for the needs of the national Air Force.
The Sukhoi holding has come up with the slogan of speeding up work on the fifth generation fighter to substantiate the need to collect everyone under its umbrella. Simultaneously, the joint leadership of the Sukhoi Design Bureau and Sukhoi AMIC is trying to keep designers busy because after the completion of large-scale design and testing of Su-30MKI and Su-30MKK they will be left without work. The corporation is not content with the modernization strategy because it will require a much smaller staff.
The stance of RAC "MiG", trying to put off the deadline for developing MFS, is also quite understandable. The leaders of this vertically integrated company are concerned about estimated low demand for the new aircraft in 2010. Besides, the present management, gradually dragging the corporation out of the grips of a severe crisis understands that MiG will be ready for full-scale work on MFS only after the time necessary to form a big team of designers out of the strongest group of ideologues of the fifth generation (originating from Sukhoi Design Bureau) who are currently working on export contracts.
The strategy of serial plants also stems from their vital interests. They cannot afford to freeze their investments for 15 years. Instead they want to spend their export revenues on upgrading equipment and modernizing production in which the government has not invested a penny since Soviet times. Besides, if the plants do not diversify their output, even the best military contracts will not save them from bankruptcy, because aircraft making, like the defense industry in general, is redundant.
It is very difficult for officials to publicly admit that all the schedules and deadlines they have been advocating for years are unrealistic. They realize that if the planned pattern of restructuring Sukhoi holding fails, the entire concept of reforming the defense industry with which their future is connected in various ways will be questioned. Officials constantly play up the subject of the fifth generation in PR actions on various domestic and international occasions. Finally, the struggle for integration can be regarded in the context of competition for control over arms trade receipts that before the formation of Rosoboronexport were controlled by several government mediators.
The most neglected part of the defense complex - specialized research centers without which any project of the fifth and following generations is irresponsible rhetoric - are ready to join any coalition that will promise them at least some kind of funding.
There used to be contradictions between parties to every major program even in Soviet times. But in those days there were tested mechanisms of settling such contradictions, for instance, the Aviation Industry Ministry that controlled significant resources. There is no corresponding ministry in Russia today or comparable resources, while the modern mechanisms of managing major projects such as consortiums are simply ignored by officials.
As centralized financing is insufficient, experts consider consortiums the optimal mechanism of advancing major projects. In Russia's specific conditions the mechanism could involve industrial facilities, research centers, foreign partners and even the military. The latter could contribute scientific-technical accompaniment and also provide the facilities for experiments, for instance, test sites.
However, the government did not support the April 2001 initiative of RAC "MiG", the Aircraft-Building Plant Sokol, IAIA or KnAAPO to organize work on the fifth generation fighter on the basis of risk sharing.
Neither are other alternative proposals on certain aspects of the program officially considered, such as the postponement of the deadline to 2015-2017, which could make the strategy more realistic and compatible with the financial capabilities of the government.
Of course, if this option is chosen, an answer should be found to the question: how to compensate for the aircraft withdrawn from service after the expiration of its service life? Many aircraft industry experts suggest developing an intermediate fighter generation before 2010, probably on the basis of advanced modifications of MiG-29 and Su-27 (Su-30MKI, Su-35) with new avionics and weaponry (probably standardized with Su-27IB). By the way, high-ranking generals who worked on the state program of armaments two-three years ago publicly said this option was acceptable.
Foreign experience also shows that such a path is quite probable. For instance, the US Air Force after public debates chose F/A-18E/F Super Hornet as the main deck fighter-bomber for the next 20 years. Their deliveries began in October 2001 and more than 5,000 aircraft should be ordered. Their forefather - YF-17 - made its maiden flight in 1974 (a year before the Russian aircraft of the fourth generation). Its aerodynamic parameters and upgrading capability are no better than of Su-27. The entire R&D program on the Super Hornet developed on the basis of F/A-18C/D cost $3.7 billion. It took only eight years from placing the RFP to adopting the aircraft for combat duty.
The intermediate option would also give time for getting a better idea of future air warfare. While Russia pursues a strategy of racing after the leader, i.e. JSF, the United States and lately Western Europe as well are increasingly focussing on fundamentally new equipment, such as unmanned fighter aircraft. A November 2001 news conference at the Pentagon featured a schedule of work on advanced unmanned aircraft. It followed from the schedule that the unmanned fighter developed on the basis of Boeing X-45 would be adopted by the Air Force some time in 2011. A similar plane for the Navy should appear by 2015. In unmanned air vehicles Russia lags behind China, to say nothing of the United States. Combat unmanned aircraft is advocated only by the most advanced Russian military and aircraft industry experts who have little support in the corridors of power.
All the hassle with the fifth generation aircraft is a symptom of a disease plaguing the entire Russian military-industrial complex: after losing the command levers of controlling major projects the authorities have failed to master up-to-date economic management tools. At the same time there is a growing understanding at the top level that the gap between military ambitions and economic reality should be bridged. In this context it is quite indicative that President Vladimir Putin has refused to approve the state program of armaments for 2001-2010 which experts believe is doomed to be underfunded by at least 50%. The president's attitude gives reason to hope that the unrealistic MFS program boiling down to the suggestion "let's build a new fighter in 10 years for $1.5 billion" may be revised.