Import tariffs to stay for at least seven years as government seeks to protect and develop domestic industry

The Russian government has drawn up a multi-billion dollar funding proposal to support procurement of 135 civil airliners in a leasing programme. The proposal is part of its draft plan for "Development of Commercial Aircraft in Russia for 2002-2010 and beyond to 2015", say industry sources familiar with the document.

About Rb17 billion ($608 million) of state funding will be allocated and another Rb26 billion will be raised in private-sector investment to develop the MS-21 and Russian Regional Jet medium- and short-haul airliners, Kamov Ka-62 and Mil Mi-38 helicopters, and associated engines and systems, according to the document.

A further Rb60 billion in government cash and about the same amount of private sector funding will be used for their development, tests and introduction into mass production.

If the plan goes ahead, it will represent the state's strongest support for domestic civil aviation since 1991 and is probably the last hope for maintaining a meaningful civil production base in Russia.

The proposal comes at a time of unprecedented restructuring, aiming to produce a united aviation holding company. "This volume of funding for the next decade means that about Rb6 billion annually is to be allocated from the state budget, which is quite realistic," an industry source says.

The programme, which was updated with the help of leading aerospace institutes and enterprises, was forwarded to the economic development ministry in late April.

Russia will maintain the existing 20% import duties on aircraft for up to seven years after joining the World Trade Organisation (WTO) in an effort to protect domestic industry, according to Maxim Medvedkov, leader of the Russian delegation at talks on WTO accession.

"Our position is to preserve the existing level of import duties on aircraft for seven years.

"Then, we might think about lowering them to a level that provides the necessary safeguards for Russian manufacturers," Medvedkov says.

Import duties on aircraft components might be lowered, "not to zero, but perhaps to 5-6%," Medvedkov says.

HOWARD GETHIN/MOSCOW

Source: Flight International