The government will force state companies to refuse imports

State-owned companies will have to import substitute equipment in a wide range.
The government starts a new stage of compelling state companies to import substitution. Minpromtorg prepared an extensive list of equipment, equipment and materials that the state-owned companies will not be able to buy abroad from July 1 without agreement with the government commission on import substitution. It included including aircraft, helicopters, passenger and cargo vessels with an annual volume of purchases of more than 50 million rubles. In the opinion of the interlocutors of Kommersant, either the list will eventually be reduced, and the price bracket will be raised, or the procedure will become an "exclusion parade".

The Ministry of Industry and Trade has prepared a list of engineering products and services that state companies (with a state stake of more than 50%) will be able to purchase abroad only after agreeing with the law commission on import substitution (the draft resolution was published at Kommersant wrote about this idea on September 11, 2017, at the end of the year amendments were approved to the law on purchases of state companies (223-FZ), which will enter into force on July 1. The bottom line is that the government commission should check the availability of Russian analogues and make state companies buy them.

Initially, it was about buying primarily aircraft, helicopters and sea vessels, but the final list consists of 227 positions. In particular, there were building materials (for example, cement), mining equipment, tower cranes, road construction equipment, etc. There are a number of positions for the oil and gas industry, such as drilling rigs, pumps (including hydraulic fracturing), floating platforms , as well as mainly rotary systems and equipment for LNG production purchased abroad. We will have to agree on purchases of power grid equipment, generators and steam boilers, but not the turbines with which the loudest scandal of 2017 in the sphere of import substitution was connected - the redirection of Siemens gas turbines to Crimea by the Rosteha structures.

The list also includes wagons, aircraft, helicopters, ships (both passenger and cargo, including tankers), and state companies will have to coordinate not only the purchase of these products, but also its leasing or freight. Finally, in the list of machines, special vehicles (from snowplows and trailers to ATVs and snowmobiles) and a number of other positions, such as warships, cyclotrons, tomographs and space rockets. In "Rosteha" the mechanism was supported, noting that it "will stimulate demand for Russian products that meet all the requirements for quality and cost". In other large state companies, they refused to comment, as in the ministries. The source of Kommersant, close to the Ministry of Industry and Trade, says that a special emphasis is placed on the concept of "services": the use of leasing and freight is "too widespread, which harms the purchases of domestic products within the country."

Active compulsion to import substitution appeared in government rhetoric as early as 2014, but so far its impact on the work of state companies was moderate and in any case much less significant than the direct effect of Western sanctions and the weakening of the ruble. But now a much more rigorous approach is proposed with a clear list that covers "a very large" part of purchases in a number of sectors, Kommersant sources say, and the purchases will have to be reconciled from the level much lower than the previously mentioned 1-2 billion rubles. "In practice, we will not be able to add equipment to the annual procurement plan, until we agree with the government, this can lead to great delays," one of the interlocutors of Kommersant is sure.

Given the low price limit, the government commission on import substitution (now it is headed by Prime Minister Dmitry Medvedev) will have to consider hundreds of transactions a year, whereas now it meets an average of once every three months. "To really check all transactions and see if there are any Russian counterparts, to work with the objections of the companies, they will have to sit at least once a week," one source of Kommersant believes. In his opinion, either the price limit of transactions in the final version of the government decree will be sharply increased, or this work will "sink in detail" and become formal. Another source of Kommersant believes that, in practice, the list of equipment under discussion will be much smaller than the indicated 227 positions. "Strong players will quickly prove that for most of their purchases there are no Russian counterparts, but someone will not be lucky," he says.