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Price hike threatens Russian defense industry, rearmament program: official

Xinhua, February 10, 2015 Adjust font size:

Rising prices of defense industry's production jeopardize Russia's defense enterprises and implementation of rearmament program, Deputy Prime Minister Dmitry Rogozin said Monday.

"One of the most difficult challenges today is a risk of hiking the prices of contracted defense products," Rogozin told a meeting of military-industrial officials.

He stressed the prices could grow under the influence of the " very different factors" along the entire production chain, which would decrease profitability of defense-related enterprises.

"This also threatens our plans for the rearmament of the Armed Forces in full...We need an adequate response," Interfax news agency quoted him as saying.

Rogozin suggested the government to extend state price regulation of contracted defense products, as well as to apply quota schemes of raw materials and supplies used for military hardware production.

Meanwhile, related departments are considering to establish a budget spending control system to monitor state defense order fulfillment, Rogozin added.

Defense Minister Sergei Shoigu said in January that Russia's state rearmament program will be completed by 2020, with the most modern military equipment to comprise 70 to 100 percent of the Russian weaponry.

With a record-high national defense budget of some 3.3 trillion rubles (some 5 billion U.S. dollars) in 2015, Russia has been adjusting defense deployment and speeding up its military rearmament in the face of all-around face-off with the West. Endite