• Military Menu                       

• Introduction
• Systems
• Facilities
• Agencies
• Industry
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• WMD
• Intelligence
• Homeland Security
• Space

Industrial Construction Industry

The process of industrial capital renovation was interrupted as early as in 1980s and a whole generation built almost nothing. They’ve lost courage to start large-scale responsible construction projects. They have forgotten how to build alot, often and at a high professional level. But at the present moment a complete swing-round is emerging in the sphere of industrial construction. Is appears thatthe period of the chronic suspended construction is about to end. Russia had a large number of small engineering companies with a staff of 10 to 100 people. They slowly evolved. For the twenty years up to the year 2010 a small part of them acquired some expertise and increased the staff to 1,000.

The history of a miserable Russian industry of industrial engineering and construction is full of outstanding achievements. The USSR built a lot of large-scale projects – hundreds of technologically intensive and large-scale facilities were built in the Soviet Union, including those built “for the first time in the history of our planet”; all the necessary services – from engineering to construction and installation works and commissioning – were developed.

However, in the first half of 1990s that powerful system of industrial construction was completely destroyed. And only a very little part of its remnant was used in order to create a Russian industry. Unlike Western countries where major engineering firms have key industrial construction competences, in the USSR such competences were divided between a network of research, design and engineering organizations. There were building and installation trusts responsible for the construction of new facilities. Branch ministries and their capital projects departments in the field performed a function of integrators of this network. Also they were responsible for project management from start to finish.

When the planned economy was dismantled, the system split into separate cells. Privatization destroyed the system completely and pieces of those cells passed into different hands. Ideologues of privatization did not consider research and design institutes as producers of anything valuable. So many of them did not find any interested owners. Many design and technology institutes, which could give rise to major engineering companies, were destroyed.

The overall picture in the contractors’ camp is depressing. A small group of the “right” companies is surrounded by a “swamp of incompetence”, which casts a shadow on all those working in the field of design and construction of industrial facilities. In the segment of design of industrial facilities, the weakness of major design institutes - the wreckage of the Soviet system of industrial design and engineering organizations, is evident. Captive contractors and the own engineering and construction capacities of customers leave only 25-30 percent of the market for independent players.

The industrial construction sector in Russia differs fundamentally from the one in thedeveloped countries. This is due to climate, geology, vast geographical distances, specific business practice and so on. And in myopinion, the most important feature is that in Russia, unlike in most Western countries, there is no civilized market of special construction and installation services. That is why a contractor usually suffers a severe shortage of skilled assemblers, instrument specialists, electricians, welders and so on.

The most common approach in Russia starts when a customer gets basic engineering documentation prepared by organizations involved only into engineering. After that the customer procures equipment and construction materials (sometimes including nails) for the facility. Only then does the customer involve a construction company that carries out construction works. Frequently the company engaged only at the construction stage sees that the project is based on inadequate, odd, hardly producible and excess solutions. Nevertheless, the cost of construction and of a whole project is determined, to a large extent, by the quality of the basic engineering documentation.

The customer sooner or later realizes that the winner of the tender did not initially understand either the actual cost of the works performed in a quality manner, risks, or the requirements. But by this time the contractor has already whipped something up. The customer has to accept the work in progress and hand the project over to a new contractor. And this is always pain in the neck – it is necessary to carry out inspections, investigations and tests of everything that has been done. Furthermore, it is necessary to revise everything. That’s why it is common practice to change a general contractor two or three times in the course of the execution of one project.