Putin decided to liquidate Spetsstroy by mid-2017

Putin decided to liquidate Spetsstroy by mid-2017
The decision on liquidation is a natural conclusion of the notorious agency’s activities

Numerous claims against the financial discipline and terms of works execution are the reason the Federal Agency for Special Construction has been closed.

The decision to abolish Spetsstroy, which is subordinated to the Ministry of Defense, was made by Vladimir Putin on November 18 at a private meeting with the leaders of the military establishment, which was held at the Bocharov Ruchey residence. This was reported by Kommersant referring to an employee of the presidential administration, as well as sources close to the Ministry of Defense.

The President’s decision was a natural conclusion of the notorious agency’s activities. Verifications of efficient spending of budget funds in Spetsstroy began in October this year, after President received a devastating report on the activities of the agency.

According to Kommersant, at a closed meeting with the Head of the General Staff of the Russian Armed Forces in the fall of 2016, the Acting Deputy Director of Spetsstroy, Aleksey Mogilnikov, announced that only 11 out of 83 facilities built in the interests of the Ministry of Defense did not fall behind the schedule; at the same time, the Spetsstroy employee deemed the condition of 61 facilities critical. Spetsstroy used to regularly inform about financial difficulties in the past. In October 2016, it became known that the agency had filed a lawsuit totaling over 150 billion rubles against unscrupulous contractors.

Spetsstroy was responsible for the construction of the Vostochniy Cosmodrome, which is known for multi-billion dollar embezzlement and a dozen criminal cases.

The situation with the construction of the most expensive cosmodrome in the world became critical in 2013. Slippage on a number of objects reached 18 months. Back then, the Head of Spetsstroy was dismissed, following by the dismissal of the General Director of Dalspetsstroy and the Head of Roscosmos.

A year ago, in November 2015, the Deputy Prime Minister responsible for space industry, Dmitry Rogozin, reported to Putin that Spetsstroy had performed work only at 15-40% of the total amount of contracts, reassigning the main volume on the construction and development of project documentation to other organizations. Thus, 250 companies without the necessary competencies and equipment found themselves involved in the construction of the Vostochniy Cosmodrome. The Ministry of Defense defused the conflict by promising to put the subordinate agency’s activities back on track.

Spetsstroy consists of 18 enterprises (and 130 subsidiaries); the total number of Spetsstroy’s employees is about 46 thousand people. It is expected that the agency will be eliminated by mid-2017. All functions involving construction of objects, as well as assets of the abolished agency will be transferred directly to the Ministry of Defense. 

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