Week of April 14, 1997

By Vovick Karnozov

KAPO and Sirena-3


Oil dollars for KAPO

A year ago, on 28 March 1996, the Russian Government issued Decree 208 giving the Gorbunov's Aircraft Production Association of Kazan, located in Tatarstan republic, exclusive rights on oil export as a means of funding the program of the Tupolev Tu-324 50-seat regional twin powered with either the GE CF-34 or Motor SICh D-436. The plane will also be available as a corporate plane for 20 executives and a business jet for 4 VIPs. The range for those three models will be 2500, 5000 and 7000 km respectively. Mentimer Shaimiev, the President of Tatarstan, is known as one of powerful supporters for the Tu-324 project.

The whole project estimated at US $300 million, calls for development and preparation of series production of the plane by the year 2000, including assembly of three development prototypes. The oil quotas for the previous and current years were set at 4 million tonne. AO Alpha-Eko oil trader was contracted to undertake deliveries and sales of the oil. In 1996, however, only 1.3 million tonne of oil was actually exported with the first payment of US$2.6 million transferred to KAPO in September.

By now a total of US$45 million have been transferred, which partly was spent on the already-fulfilled R&D work at Tupolev (US$800,000) and paying off KAPO old debts amounting to US$5.22 million. Despite the resistance of Russian oil exporters, which are not happy with KAPO's exclusive rights on oil export, in the first quarter of 1997 Alpha-Eko exported 0.85 m t of oil. Because the real figures of the oil export have been lower than expected, KAPO is now planning to sell the first two prototypes at US$13 million in order to get additional money for the program.

US Ex-Im Bank funds Sirena-3

The former USSR recognized the need for a new air-traffic management system in the early eighties. During that time the country's passenger traffic grew steadily and it was found necessary to create a comprehensive, satellite-based network of stations all over the Soviet Union with powerful computer centers in key airports. The future system, christened "Sirena-3," would have placed five such centers in Moscow, Kiev, Alma-Ata, Sverdlovsk and Novosibirsk. Its computing capacity would be big enough to handle an annual traffic of 150 million passengers.

Unhappy with local manufacturers and programmers, the Ministry of Civil Aviation decided to use Western computers and software from the very outset. IBM won the tender and began working on the project largely with its own money.

The break-up of the Soviet Union and a sharp decline in air traffic in the CIS countries put an end to the initial plans. However, the very need for a modern air traffic management system has remained all these years. Only in 1996, state agencies from several CIS countries formed the MTK Sirena international technological corporation, capitalized with Rbs 15 billion, to undertake the creation and introduction into service of a modified version of the Sirena-3.

At first, MTK Sirena tried to attract European financiers to fund the project, but to no avail. Instead, the corporation found a reception in the USA. In January, Yuri Darymov, the first deputy general director of MTK Sirena, said that after a series of iterations, the Ex-Im Bank of the USA had agreed to provide financing for development and fielding of the Sirena-3 automated air traffic management system, under guarantees from the Russian Government.

The appropriate governmental decree, Number 103, was signed by Russian Premier Victor Chernomyrdin on 2 February. The document says the Government approves of the plan to take a US$90 million credit from the Ex-Im Bank of the USA and orders the Ministry of Finance and the state-run Vneshekonombank (for "Bank for Economical Relations with Foreign Countries") to give appropriate guarantees to the Americans. The credit will be paid off from the special commission fee to be levied on airspace users. It is reported that 52 air companies have already signed appropriate agreements with MTK Sirena.

According to L.Ilchuk, the General Director of MTK Sirena, on 20 March the council of directors at US Ex-Im Bank made its final decision to provide US$90 million for the Sirena-3. The credit will be served by Commerzbank AG and LLama Co. MTK Sirena claims it now has found all the money needed - the overall cost of the project is estimated at US$142 million - and that the work will start in earnest in May.

The OKB MEI design bureau, a specialist in satellite-based communications, has been appointed the general contractor. AT&T Triedem will provide communications hardware; IBM will be responsible for S/390 computers and system software; Sabre Decision Technologies will act as the system integrator and developer of task software packages. The space component will be represented by the Express-6 communications satellites, which would serve 28 stations in Russia and several other CIS countries. At the moment, work on the first three stations in Novosibirsk, Mirny and Yakutsk nears completion; the remaining 25 stations will be in operation by the end of 1997. Upon creation, the Sirena-3 will be undergo operational trials in two pilot air companies.


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