11:48 GMT +323 March 2018
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    MOSCOW, March 3 (RIA Novosti) - On Wednesday, at an enlarged Russian Conventional Weapons Agency (RAV) board session on the results of the agency's 2003 activities, the head of the RAV, Alexander Nozdrachyov, told journalists that the number of defense sector enterprises facing bankruptcy would increase.

    According to Mr. Nozdrachyov, the military industrial sector is facing grave financial problems.

    "Thirty-seven percent of the 127enterprises in our sector have every reason to declare bankruptcy and the financial situation of the other 32% is very unstable," Mr. Nozdrachyov said.

    He said the defense industry enterprises owe the RAV more than 45 billion rubles (more than $1.5 billion).

    "This makes up half of the industry output. We have made about 92 billion rubles in total. It means that the half of our production output is the debt of the enterprises," Mr. Nozdrachyov said.

    He cited an inadequate tax policy as a major problem. He explained that defense factories pay twice as much in taxes as other sectors, including the financial and the oil and gas sectors.

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