THE SIGNIFICANCE OF RECENT CHANGES IN THE PROGRAM FOR THE SOVIET CONSTRUCTION I

Created: 10/28/1955

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IH Dissemination Authorized Assistant Director Office of Current Intelligence

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SC5 No.5 Copy No. - .

THE SIGNIFICANCE OF RECENT CHANGES IN THE PROGRAM FOR THE SOVIET CONSTRUCTION INDUSTRY

Office of Research and Reports

CENTRAL INTELLIGENCE AGENCY

This document contains information within the meaningi.t

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indicate thatelatively short period the preponderance of long-term industrial construction projects in the USSR may he completed. urvey of selected developments in the Fifth Five Year,ocus on known large-scale industrial projects, was designed to test this hypothesis.

Continuation of development of new industrial centers,of new plants, and major expansions of existing plants are the main concern of this report. The commitments for the completion of heavy industrial projects are much firmer than those forprojects because the latter may be partially exploited, even if they have not been completed.

The survey of outstanding construction projects varies infrom industry to industry. For example, the coverage for construction of coal mines, blast furnaces, and hydroelectric power plants is nearly complete, whereas the coverage forin the chemical industry is noticeably less complete. What is shown in this report is the status of known construction projects, which may serve as the basis for some broad conclusions.

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CONTENTS

Page

>

I. Shifts in Economic Policy During the Fifth Five Year

Plan

arch

on the Consumer Sector Following

the Death of

Suspension of

Announced

Evidence of

Difficulties of

Achievements

Effect on Construction for Heavy Industry .

to Emphasis on Heavy

Positive

Negative

II. Effect of5 Changes in Emphasis

on the Construction

A. Consumor

Light and Food Industries . .

Industry

Construction Targets

of Known Projects

Industry

Number of Projects . .

Ministerial Structure for. .

Program for Precast Concrete

Constructionactor in Economic

Mobilization

Appendix

Source References

Tables

in Output per Soviet Construction Worker.

Construction Projects for Heavy Industry

Known to Have Been Completed45 .

Construction Projects for Heavy Industry

Scheduled or Estimated for Completion5 . .

Construction Projects for Heavy Industry

Scheduled or Estimated for Completion6

or Later

b

28

0 31

31

33

10

19

21

ORR)

THE SIGNIFICANCE OF RECENT CHANGES IN THE PROGRAM FOR THE SOVIET CONSTRUCTION INDUSTRY*

Summary

Construction for heavy industryaa characterized by the continuation of projects already started, the initiation of asmall number of new large-scale projects, and the expansion of existing plants. Plans5 call for the completionaximum number of projects5estriction of the initiation of new projects. Although shifts in economic policy have had an effect on the disposition of Soviet construction resources, constant efforts have been made to advance the development of heavy industry.

In the period1 to Stalin's death, work continued on projects carried over from the Fourth Five Year, but very few new long-range construction projects were observed. In the eastern areas of the USSR, cutbacks and deferments of individual projects reflected the strong regional effect of the Korean Wax. The Fifth Five Year Plan, which was announced inalledontinued high share of investment in heavy industry but specified very few new large industrial projects.

* The estimates and conclusions contained in this report represent the best judgment of ORR as

The changes in the construction program which.were made after Stalin's death did not affect heavy industrial construction materially, although the suspensionignificant number of projects wasin widely scattered areas of the USSR. Most of the major suspensions were of long-range projects for transportation and Later3 the important role of the construction industry

in the plansapid expansion of the consumer sector*-wae stated explicitly. The expressed need to continue to develop heavy industry led to an ambitious program for the building up of heavy industry and the consumer-oriented sector on an approximately equalerious effort by the construction industry to carry out this program is indicated by preparations3 and implementation in most The underfulfillment of investment plans for certain elements of heavy industry and all of the consumer-oriented sector can be attributed largely to shortcomings in construction work. The peak carryover of unfinished construction4 largely reflected the ambitiousness of the plans of the "newhichide dispersal of construction resources. Lags in construction schedules for several important branches of heavy industry have been admitted by the Soviet government.

The extent of the "new course" apparentlyimiting effect on the number of new long-term industrial projects. An important exception is the electric power industry, where at least eight, large hydroelectric projects have been started

At the present time, construction is concentrated on nearlyheavy industrial projects and on the requirements of the new agricultural areas. Housing constructions in most of the postwar years, will absorb only aboutercent of Sovietresources. Successful completion of5 construction program will be easier to achieve because the most important elements of the Soviet construction industry have been integratedew deputy premier.

One result of these efforts will be to ensure the completion of most known long-range industrial construction projects in the USSR by the endurvey of industrial construction projects

* The consumer sector is generally considered to include the light and food industries, agriculture, and internal trade. In this report, housing construction is included in discussions of the consumer sector.

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reveals that many were completedhat an additional large number will have been completed by the endnd that few projects will extend far The* major exception isprojects, some of which are in the early stages ofand will not be completed for several years.

Although it is possible to predict the completion of most known industrial projects, the USSR is maintaining its policy of restricting the initiation of new projects. Construction resourcesimited number, of projects so that those which are started may be completed as soon asf the restriction on the number of new projects should prove severe and of long duration, the volume of Soviet industrial construction should dip to an unusually low level. Even if this restriction were moderate andear's duration, the amount of unfinished construction should declinein comparison with the recent years.

I. Shifts in Economic: Policy During the Fifth Five

A. Initial.

* For serially numbered source references* see the Appendix.

The guide lines for industrial construction work in the currentFiveYearere not revealed until the plan was announced in0 andelays and adjustments in individual projects in the eastern areas of the USSR were observed which probably reflected the strong regional effect of the Korean War. 2/ During the period immediatelyStalin's death, most of the known industrial construction projects under way were thoBe that had been carried over from the Fourth Five Year. Of the few new projects

that were started, the most important were the large hydroelectric plants near Kuybyshev, Stalingrad, Kakhovka, and Novosibirsk. 3/

The announced Five Year Plan goals for industrialwere reflected by planned capital investment* in heavy industry. Investment in this sector was toercent greaterhan in theears,hus continuing to absorb aboutercent of total state capital investment. 5/

Despite this high level of investment, relatively few new large-scale industrial projects were specified in the Fifth Fiv* Year Plan. Constructionarge hydroelectric projects andumber of others" was scheduled to get under way in this period, in addition tohat had already been started. In other industries, new construction was apparently to be in linerogram ofexpansion. Completion of most of these projects5 was planned-

B. Emphasis on the Consumer Sector Following the

of Projects.

From March toignificant numberprojects were suspended or curtailed in widelyof the USSR.

Some of the projects suspended or curtailed were among the largest under way in the USSR. All of these projects

* In the USSR, expenditures for construction have constituted aboutercent of total state capital investment. Therefore, data on capital investment are frequently cited in this report to indicate trends In construction.

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were in the early stages of construction, and it is estimated that no more than iO percent of the monetary outlays for any of the projects had been expended. 6/

The most important changes were made in construction for transportation and agriculture, inumber of long.range projects were suspended (the Mys Lazarevka tunnel,he branch rail line in Primorskiy Kray,he Kungrad-Gur'yev railroad line,he Main Turkmenhe Southorth Crimean Canal, U/ the Volga-Uralnd the Kura-Araks reclamation Heavy industrial construction was not greatly affected by these changes: only one project was suspended.

It is estimated that the value of projects known to have been, or strongly believed to have been, suspended between March and3 was roughlyilliont is difficult to be precise in relating this value to the total value of construction work in the USSR because some but not all of the projects would have been in progressnd because at least one of these projects has already been resumed.

2. Announced

The important role of the construction industry was stated explicitly later3 in the series of decrees callingapid expansion of the consumer sectorharpwere called for in investment in the light and foodagriculture, and trade. For example, the share ofpheres of the. economy in total capital investment (exclusive of capital repairs) was to rise fromercent2 toercent/ Housing construction was to be expanded atccording to statements of Sovietpecific plan was not revealed. Meanwhile, construction for heavy industry was not to bes indicated by Sovietnd bypercent increase in capital investmentshich placed the share of heavy industry atf state investments.

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Statements on housing construction by Soviet leaders were vague but contained suggestions that the rate would be stepped up at least3 Plan calledpercentin investment in housing over2 4 the Plan calledpercent increase in housing

Thousands of rural buildings were to be erected, according to the initial decree on the development Subsequent decrees called for the openingf new landB forn area ofillion toillion hectares, according to the moat recent The increasedrequirements for the state agriculture program are reflectedise of aboutercent in capital investment allocations in

,,M-

and Fond Industries.

The program for the Ministry of IndustrialGoods specified the start of constructionewconstructionew enterprises, and theexpansion In addition,factories were scheduled to be completed for thethe Food Industry by the end Oflarge.

factories" were already under construction

Total capital investmentorndustries was to be aboutercent greater thannvestment4 was to be overillion rubles, an increase of more thanercent over3

An impressive total of stores, dfiiing establishments, and other structures was to be built, accordirfg to the decree

on internal trade.4 investment in the trade sector (the Ministry of Internal Trade, the Central Union of Cooperatives, and Departments of Workers' Supply) was increasedillion rubles, orercent of total statehis figure may be compared with the levelhen investment in this sector amountedillion rubles, or lessercent of total state

3. Evidence of Intentions.

The consumer industries and heavy industry weredeveloped on an approximately equal basis, according to

Preparations3 and implementation through most4 indicated that the Soviet government was serious in itsto carryrogram of dual development as announced. Evidence to this effect is provided by the plans outlined3 and establishedhe assignments of industrial constructionand the priorities in the allocation of building materials. In the late monthsrgent planning for the construction of Machine Tractor Stations (MTS's) was noted. Housing construction was also accelerated during this In the fourth quarteronstruction for the light and food industries was

Construction units usually assigned almost exclusively to heavy industry were detailed to work on aspects of the consumer goods program Housing construction, always an important part of the work of heavy industrial construction trusts,onstruction of MTS's was performed by trusts of the constructionnd by construction trusts of the coal, oil, and electric power industries, as well as of the Ministry ofhe construction ministries were to perform workillion rubles for the Ministry of Industrial Consumer Goodshich undoubtedly far exceeded their usual amount of work for light industry. Intention to implement this program is further shown by the allocations of building materials. As early asome aspects of the consumer goods program enjoyed priority in such

January to Junewnxcb showed priority

for the period fromhole industry orarticular aspect of the Soviet economy for an extended orperiod dealt with the consumer goods program,

umber ol

instance b, lnaiviauai lnfUllations ot heavy industry received special priority, but the priority usually covered shipmentew naryshipping orders) orhort period of time. Thus, in the first parthe consumer goods program had high priority both in plan and in fact, with few

Between July and4 the consumer goods program continued to be rated above heavy industry in the over-all priority plan. At the beginning ofonth period,ew individual installations of heavy industry were given high priority.ew industrieshole or entire ministries in the heavy industry category received special priority. Undershipments to the consumer goods program which were evident during the whole4 and especially in the latter part of the year, probably resulted in part from the assignment of such "spot" priorities to heavy

4. Difficulties of Accomplishment.

* Investment in housing is included in investment totals for other sectors.

The nature of4 construction program in the USSR ledide dispersal of resources. This dispersal is one of the major reasons given by the Soviet government for underfulfillment of its investment plan It wasajor factor inof the failure of the program by the intelligence community. The sise and complexity of4 construction program is roughly indicated by data on capital investment. The planned level of state capital investment4 was setillion rubles, an increase of at leastercent over that espective increasesercent were Invest, ment in heavy industry was to riseercent, in the consumer sector by aboutercent, and in housing by about .

The sharpness of the rise in consumer-oriented investment and the complexity of the program (in the sense that plans for the consumer sectoride variety,of structures, mostly small ones,ultitude of sites)ifficult task on the Sovietindustry.

Dissatisfaction with construction performance4 in branches of all sectors of the economy has been expressed in the Soviet The most important causes for failure to meet construction goals were identified as poor and tardy design work, delays in issuing yearly plans, weak administrativeultiplicity of small construction organizations, failure to utilize equipment properly, and failure toteady volume ofwork through all the seasons.

Despite these general criticisms of constructionan important gain in labor output was madehen the declining rate of increase of theears was reversed. Tableowever, shows that the plan to raise output per worker05 byercent will be under fulfilled byercent.

Failure to meet the planned output of building materials cannot be regardedajor cause of shortcomings in construction work. 4 the Ministry of the Construction Materials Industry overfulfilled its over-all planercent and the plan for cement productionraction ver-allby this ministry wasercenTgreatcr thanndicating that production is ahead of the rate set for the current Five Year Plan, which calledercent increase5 over0 Although numerous spot shortages ofmaterials4 were noted, there is little evidence of any serious, broad-scale disruptions in construction work resultingeneral prolonged shortage of materials. Transportation difficulties, however, were noted as an important cause forof building materials

ollows on

Tabic 1

Increases in Output per Soviet Construction Worker

Percent

over Previous Year

Output

A.

a/

b/

a/

A.

a/

a/

c/

d/

1 e/

on the assumption that5 Plan will

The inability to accomplish4 construction program appears to haveirect result of the ambitious nature of the program itself, although other causes undoubtedly contributed to the failure.

5. Achievements.

4 construction program is marked by certain achievements. The total of real capital investment rose The investment plan, however, was under-fulfilled, although probably onlynd the over-all plan for putting new industrial "capacity into operation was also under-fulfilled by an unstated

Theercent increase in investment in heavy industry, amounting toillion rubles, is estimated to have been fulfilled or very nearly The planned increase of aboutercent in the consumer sector, which amounted4 billion rubles, was fulfilled by only about Housing(included in the above totals and elsewhere in the investment plan) was to increase byercentillion rubles, but this plan was fulfilled by about

Soviet experience in heavy industrial construction is far greater. Although large,ercent increase inwas far more moderate than lhat for the consumer-oriented suctor. The large volume of heavy industrial! construction and the degree to which resources can be concentratea probablythe fulfillment of plans in this sector, while constructionin the consumer sector were widely scattered.

6. Effect on Construction for Heavy Industry.

The effect of increased emphasis upon construction for the consumer sector on planned construction for heavy industry4 was apparently moderate, although significant. asic factor influencing the implementation of plans for heavy industry was the necessity for shaping manpower and materials with other sectors on an approximately equal basis.

If the imposed need to share resources had been severe, numerous and prolonged stoppages of heavy industrial construction projects would have been observed. Such stoppages did not become evident. The examples of underdelivery of building materials to projects for heavy industry, although numerous, do not provide evidence of acute conditions. The moderate impact of this need to share resources may be illustrated by examples ofprojects. Deliveries of cement and lumber fell behind scheduleumber ofut the plan for putting new capacity into operation was

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It is probable that schedules for the completion of projects, rather than the volume of construction for heavy industry, were affected by the emphasis on consumer goods. The unprecedented number ofconstruction projects has been mentioned by Soviet economic leaders with apparently grave The seriousness of this lag in planned construction schedules may have been exaggerated,in view of the announced completion or near-completioneries of important projects in the early months

Evidence that the effect of consumer emphasis on heavy industrial construction was moderate is the fulfillment orof the investment The lags in planned construction schedules are significant. The general seriousness of these lags, however, cannot be precisely determined and, as pointed out above, may have been exaggerated.

C. Return to Emphasis on Heavy Industry.

The Soviet return to an emphasis on heavy industry5 is evidencedlood of official statements and by the character of5 Some positive signs ofhange were indicated by certain developments involving the constructionin the later months There is, however, some evidence which also indicates that the swing back to an emphasis on heavy industry has not been complete.

1. Positive

a. Early Indications.

* It has been suggested that4 is an important date in the analysis of adjustments in Soviet economic policy because on that date the endorsementajor economic decree by the Central Committee of the Communist Party preceded the endorsement by the Council of Ministers for the first time since Stalin's death, and since then subsequent economic measures have been at the initiation of the Communist Party rather than at that of the Council of

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top trrPFT

"TreaTXeTionScapital investmentbb. As has" been uuirueuuch reductionstronger arid more immediate

impact on construction than on durable capitalsby the Soviet budget, allocations for capital investment in

re slightly lower than

Cmecree was issued on the development of the precast concrete industry which calledore than fivefold increase in production4verercent of the construction to be erected with the use of precast structural concrete was to be" used directly for consumer purposes. It was implied in the decreeumber ofprojects'in early stages would be-deferred pending theof precast concrete. An additional indication lhat the announcement of the precast concrete programurning point in the consumer goods program is provided by thein construction plans of several consumer-orienteds well as adjustments5 capital investment'allocations. An estimated decreaseercent in investment in state agriculture and an almost certain reduction for the light and food industries and trade are to take place

Between July4 theprogram-continued1 to be rated aboveheavy industry inpriorityt the' beginning ofontha few individual installations of heavy industry werepriority. ew industrieshole or entirethe heavy industry category later received special priority.to the consumer goods program which wereduring the wholeut especially in-the latterthe year, probably resulted from the assignment -of suchto heavy-

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Discussions of Economic Policy.

Inxpressions of dissatisfaction with the progress of construction for two important branches of heavy industry, iron andnd coal.HQ/ appeared in the press. In each case it was urged that construction lags be eliminated.

In the well-known discussion of the relativeof heavy and light industry which was carried on in Pravda and in Iavestiya fromoecember the allocation of construction resources wasoint of issue. Two features of the Khrushchev speech to the Builders Conference, which was published in Pravda onecember, are discussed below.

Speech at the Builders Conference.

Two features ofecember speech at the Buildersre particularly pertinenthis emphasis on the primacy of heavy industry and his remarks on the dispersal of resources. Khrushchev's statements on the importance of heavy industry could only be interpreted by his audience asa general, high priority for heavy industrial construction. His remarks on the dispersal of resources were amplified by examples of construction projects which had been prolonged. His conclusion' wasoncentration of construction resources would materially reduce the duration of construction projects. Both of these points made by Khrushchev at the Builders Conference have since beenin current Soviet construction plans and policies.

2. Negative Indications.

Priorities in construction under way for thewere apparently not strongly affected. During5 there is noharp change

in the allocations of building

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II. Effect of5 Changes in Emphasis on the. *.

The effect on the distribution of Soviet construction resourceshange from the "new course" is difficult to measure. Because projects well under way are generally continued, radical, abrupt changesast construction program cannot be expected. eriod of time, howver, changes will be effected by theof resources from completed projects. Some indications of prospective change are available.

A. Consumer Sector.

otal investment allocations for the consumerare considerably below4 allocations, and the share of this sector in state capital investment is also to decline83/

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The5 investment in housingillionhis amount represents an increase ofercent over the actual leveleclineercent from4 plan

A valid comparison of these levels cannot be made,the degree of fulfillment of5 housing plan cannot be precisely estimated. If it is assumed,hat the plan wasercent, it follows that theercent increasea significant decline from recent rates of growth of housing investment, which wereercentndercent

investment in state agriculture5 is estimated to beercent less than the amount plannedfor the development of sovkhbzes funs'counter to the trend

for agriculturehole. Allocations for this purpose amountedillion rubles, an increase ofercent over4onstruction byfilometers of narrow-gauge andilometers of broad-gauge railroad lines has been planned as part of the new lands Priorities in the allocation of materials for construction in the new lands provide additional evidence of the importance of this

and Food Industries.

The investment allocations for the light and foodwere nol specified in5 Soviet budget. It is estimated, however, that investment in these industries5 will bebelow4 planned

As in the light and food industries,5 plannedin trade is estimated to have been considerably below4 planned

B. Heavy Industry.

onstruction project in the final stages of completion is referred to by the term puskovoy ob"yekt. This term is defined asroject scheduled to be put into operationiven planningecause this is the final year of the Fifth Five Year Plan, any current reference lo Ihis term almost certainly signifies the intention tothe project involved by the end Minister of Finance Zverev, in his recent budget speech, used the term puskovayahen he was discussing the concentration of construction resources This term is almost synonymous with puskovoy ob"yekt.

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Investment in heavy industry5 willillion rubles, and its share of total investment will beercent,with its share ofercent The increase of planned investment in heavy industry5 is to be only Construction in support of the current investment plan for heavy industry is to be concentrated on projects in the final stages of Meanwhile, Soviet policy calls for a

restriction on the number of new construction projects in order that the projects started may be completed in minimum time/

The portion of construction expenditures in the totalin heavyillion rubles) cannot be accurately estimated. The possibility suggested by the foregoing data, however, that the relative importance of construction in heavy industryis declining will be examined in this section.

1. 5 Construction Targets.

5 targets for heavy industry construction and the measures adopted to ease their attainment have been made abundantly clear in Soviet announcements.

a. Concentration of Construction Effort.

The policy to be followed by the construction Indus-try5 was clearly defined in the budget speech of Finance Minister Zverev. His key statement was as follows:

The USSR Government has deemed it necessary5 to concentrate monetary and material resources, as well ason the most important enterprises about to be commissioned, and not tothe dispersal of capital investments, in order to assure unconditionally the com-missioning of projects provided for in the/

That heavy industrial construction is to be the focal area for this concentration of effort is clearly indicated by the tenor of Zverev's speech. This emphasis within the heavy industry sector5 is most likely to be placed on plants which produce industrial materials and electric power. The ministries which were reported toarticularly large volume of unfinished construction (either in monetary terms or in terms of the number of projects) are those

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for the petroleum, coal, electric power, ferrous metallurgical, and nonferrous metallurgical industries./ In the same address. Zvcrev revealed that the volume of unfinished construction of plants and of housing had risen significantly by the end

b. Restrictions on the Initiation of New Projects.

Current Soviet policy also callseduction of the total number of. new construction projects. The Soviet government expects to facilitate the earliest possible completion of the projects that are .it.ir.ted by concentrating its construction resources. This policy has been stated directly or indirectly by top Soviet leaders (Khrushchev and Zverev) as well as by speakers at the An elaborate exposition of this policy is in an article in the Soviet construction newspaper, Stroitel'naya gaaeta, dated It is made clear that restrictions on new construction apply to heavy industrial construction. Examples of the desired time limitations for the construction of specific types of installations were given. All but one of the examples were plants for heavy industry./

2. Status of Known Projects.

Tables, andndicate that, for the industriesmost large projects will have been completed by the end5 or soon after. As noted earlier, hydroelectric construction is the major exception. Another exception is to be found in theof new coal mines. In addition, an undetermined volume ofat three metallurgicalill be carried over into the Sixth Five Year*

lAicaieuerepover.S, NovoErolTJK, aftdof imprecise information on actual accomplishments or present plans, the completion dates of these plants are not* Continued on

* ollows on p.ablennd Tablen* The tables cover the petroleum, coal, iron and steel, electric power, and chemical industries; part of the defense industry; and most of the machine-building industries. The coverages vary in

Soviet Construction Projects for Heavy Industry Known to Have Been Completed45

and Type of Project

of Project Date orCompletion

Industry

Synthetic fuels plant (first section)

Iron and Steel Industry

Blast furnace, two open-hearth furnaces, and other installations

Blast furnace, three open-hearth furnaces,unnameda/*

Blast furnace

Blast furnace No.nd other installations

Blast furnace No.nd other installations

Blast furnacend other installations

Two ore concentration plants

Rolling mill,

Angarsk. Irkutsk Oblast

Magnitogorsk, Chelyabinsk Oblast

Dnepr odzherzhinsk, Ukrainian SSR

Novotroitsk, southern Urali Rustavi, Georgian SSR

Rustavi, Georgian SSR

ologda Oblast

Dashkesan Iron Ore Mine,

Azerbaydzhan SSR Chelyabinsk, Chelyabinsk

Oblast

N. A. N. A.

N. A. N. A.

N. A.

N. A.

N. A.

N. A.

etric / ton

/

/

/ July and/

4/

/

End/

/

Soviet Construction projects for Heavy Industry Known to Have Been Completed45 (Continued)

and Type of Project

of Project (Planned)

Date or Degree of Completion

and Steel Industry (Continue d)

mill,nd several open-hearth furnaces

Two electric furnaces

/

Zestafoni Ferroalloy Plant,. Probably small / Georgian SSR

Industry

Nitrogen chemical plant

Electric Power Industry b/

Hydroelectric station Hydroelectric station Hydroelectric station

Ruatavi, Georgian SSR

Mingechaur, Kura River Tsimlyanak, Don River Kama, Kama River

N. A.

/

w c/ w cf w Six ofurbines installed/

Tableelow.

of the capacities of the hydroelectric stations are based, in some cases, on prewarestimates are intended only to show the relative magnitudes of the construction.

or estimated eventual capacity.

m

Soviet Construction Projects for Heavy Industry Scheduled or Estimated for Completion5

and Type of Project

Location

Size of Project

orf Completion .

o

Industry

"Many industrial projects"

Iron and Steel Industry

Cherepovets, Vologda Oblast

Blast furnace No.oke batteries and other productive and municipal facilities

"Additional unnameda/*

Tinplate mill

Sheet-rolling mill Chemical Industry

Phosphate fertilizer plants Estonian SSR, Ukrainian SSR,

and Uzbek SSR

PhosphoriteOblast

Coal Industry

One hundred and fifty-three new shaft mines

N. A.

N.A. Large N. A.

N..

To be completed/

By end/

/

Partial completion in

/

/

Completion/

I

Footnotes forollow on

I

Soviet Construction Projects for Heavy Industry Scheduled or Estimated for Completion5 (Continued)

and Type of Project

of Project

of Degree of Completion

Power Industry b/

Hydroelectric station

Hydroelectric station

Hydroelectric station

Hydroelectric station

Hydroelectric station Hydroelectric station Hydroelectric station

Hydroelectric station

Tractor Industry

Kuybyshev, Volga River

Kakhovka, Dnepr River

Gor'kiy, Volga River

Kama, Kama River

Narva, Narva River Dubossary, Dnestr River Gumat, Rion River,

Georgian SSR Karabakh, Azerbaydzhan SSR

w

w

w

w

0.

w

/

cf

b/ c/

Partial completion by the end/

Partial completion by the end/

Partial completion by the end/

Additional units to/

/

Completion/

Partial or full completion/

Partial or full completion/

Program to expand aof existing plantslanned investment cost45illion rubles to/

3

Pi

m

Tablebove.

of the capacities of the hydroelectric stations are based, in some cases, on prewarestimates are intended only to show the relative magnitudes of the construction.

or estimated eventual capacity.

Soviet Construction Projects for Heavy Industry Scheduled or Estimated for Completion6 or Later

and Type of Project

Location

of Project (Planned)

Date or Degree of Completion

Industry

Synthetic fuels plant (second

Lubricating oil refining facilities

Angarsk, Irkutsk Oblast Baku

etric By the end6

N.by the end of

/

Industry

Synthetic rubber plant

Usol'ye-Sibirskoye, Irkutsk Oblast

N.by the end of

/

Chelya. binsk Oblast

Iron and Steel Industry

Tinplate mill andother unspecified installations

Coal Industry b/

Electric Power Industry c/

Hydroelectric station

Kuybyshev, Volga River

* Footnotes forollow on

Hydroelectric Dnepr River

N. A.

w

w

/

Additional installations to be completed6 and later years

Completion6

Tabic 4

Soviet Construction Projects for Heavy Industry Scheduled or Estimated for Completion6 or Later

(Continued)

and Type of Project

of Project (Planned)

Date or Degree of Completion

Power Industry c/ (Continued)

Hydroelectric station Hydroelectric station Hydroelectric station

Hydroelectric station

station station station station station station station station station station station

Hydroelectric station

Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric Hydroelectric

Kama, Kama River Gor'kiy, Volga River Ladzhanur, Ladzhanur

talingrad, Volga River

Irkutsk, Angara River

Novosibirsk, Ob'/ Bukhtarma, Irtysh River Kopchagay, Hi River Bratsk, Angara River Votkinsk, Kama/ Ufa, Ufa/nepr River Dar'yal', northern Caucasus Vartsikhe, Georgian SSR Chu Group, Chu/ Tokmak Group, Chu/

w N. A.

w

Completion possible6 Completion possible6 Completion possible in

/ Partial completion scheduled

ompletion

wA.

wA.

wA.

N.A.

w

w

N.A.

Industry and

of Project

or Degree

of Project

Completion

Power Industry c/

-

station

Volga

A,

A.

station

Kum, Syr Dar'ya

/

A.

3

discussion of the coal industry,elow.

of the capacities of the hydroelectric stations are based, in some cases, on prewarestimates are Intended only to show the relative magnitudes of construction.

I

Construction for the coal industry will be bothaccelerated5 Inears,inesworkings are to be commissioned, according to/ Late in4 the coal industryfor persistently lagging in the introduction of newit was urged that this lag be overcome in the shortesthere is some evidence that additions have beenprevious plans for the construction of mines and otherin theears. It was stated late inf new mining industry enterprises in excess of thethen being built in the old as well as in newer coaldditional mines were to be put into operation inand in the Voroshilovgrad and L'vovareas5 andindication of the acceleration of the construction foris contained in j ecree of early

The Ministry of the Construction Materials Industry was to guarantee full shipments to the Ministry of the Coal Industry on the fourth-quarter plan- as well as to make up undershipments of theonths The Ministry of Transportation was to supply cars for this purposeirst-priority basis./

5 Plan for the completion of new mines1 has been expressed twice, each time in different terms. In4 it was stated that two-thirds of the mines under construction would be completed by the third quarterossibly indicating that utould be in operation by that. date. In5 it was statedew shaft mines were to be completed/ Accomplishment of the latter plan would leave onlyinesrovided the goalew mines56 remained unchanged.

* For purposes of comparison, it should be noted thatew mines were openedf them4 alone.* Included in this survey were the automotive, agricultural machinery, railroad equipment, machine tool, construction equipment and machinery, and heavy machine-building industries^

The part played by construction in the expansion of the machine-buildinguring the course of the Fifth Five Year.

TOP^RET

Plan has apparently been relatively unimportant.* Known construction activity has been confined to the enlargement of existing plants. There is no evidence of the initiation of construction of any large newplants in recent years.

Announcements of plans for some of the industriessome indication of the volume and status of construction in this sector. Investment45 for completing the construction of existing plants in the tractor industry was to have amountedillion rubles. / Expansion of specific agricultural machine-building plants was scheduled, probably for the same period./ Some expansion of construction equipment plants is being undertaken in support of the precast concrete industry./

Observations of construction for tho machine-building industries fail toigh level of activity. There has been no major new construction for the automotive industry during the Fifth Five Year Plan. Some of the construction started in the Fourth Five Year Plan, however, has been completed during the present plan./ There has been no indication of extensive construction or of completely new plants going up for other sections of theindustry similar to the available indications offor the electric power, iron and steel, and petroleum industries.

* Capital investment may have remainedigh level during this period, with equipment purchases absorbing most of the allocations.

The status of industrial construction for the nuclear energy program is extremely difficult to evaluate. The lack of any evidence to show that new industrial centers for this program have been started0 indicates that the establishment ofis probably well advanced. It is possible, therefore, that there hasecline in the requirements of resources forconstruction in the nuclear energy program.

Expansionxisting aircraft plants has been observed in recent years, and it is believed that most of the construction will be completed by the end Construction at aircraft plants is known to have had the highest priority at least during the summer

The finding that most large industrial projects of the Fifth Five Year Plan will have been completed by the endhich is based on the specific and general information in Tables, andnd the above discussion, is supported by the Fifth Five Year Plan and by the observation that the initiation of new long-term industrial projects was limited during the enrrent plan period. n apparent contradiction of this finding is suggested by the grave concern of the Soviet government over the big carryover ofconstruction

This concern was probably exaggerated, however, as is evident from the situationndustries which were cited asarge amount of unfinished construction work at the end Completion or near-completion of some of the majornder construction for the Ministry of Ferrouswas accomplished in the early part Lags in theschedules of the petroleum industry are also probably not serious, which is indicated by the current goal of early completion of the Five Year Plan for the development of this industry./ In the coal industry,ew shaft mines were completed4 outotalhich had been scheduled for completion. /

C. Construction Industry.

The changes that have occurred in the Soviet construction programew approach to the solution of construction problems will probably have the effect of facilitating the achievement of the goals set for the construction industry. For the most part, these changes will be effective through the better part

*bove. ** At Dneprodzhershlnsk.Novotroitsk. Rustavi, and Chelyabinsk.

-

X

1. Number of Projects.

The concentration of construction resources on aof projects will result in an appreciable saving in thefor the completion of each one. The Soviet expectation isby "industrial methods" will increase the over-allof construction work./ esult of theresources on projects nearing/ and theof new/ the total number of projects inprobably be substantially less than the number under way inlogic of this conclusion is supported by the recent suspensionof several/ and by the need to deferthat was implied by the decree on the development ofconcrete industry. -

The objective of saving time is probably the primary consideration in the decision to restrict the initiation of new projects. This objective is illustratedomparison of the time the Soviet government intends to devotearticular project and the time that actually has been devotedimilar project. It is stated that an integrated steel milllast furnaces should be built in/ Construction of the Rustavi mill, which fits this description, will have requiredears./ The two examples may be extreme because the desired time period ia probably optimistic and because the Rustavi project may not be typical of Soviet It is nevertheless clear that the seemingly excessive timefor construction projects in the USSR could be further reduced by the simple expedient of concentrating construction

A limitation of the number of projects would lead the Soviet government-to expect increased efficiency in construction by an increased intensification of capital. The availability ofequipment and machinery has risen sharply in the course of the current Five Year Plan, but frequent complaints have been made of underutilization./ The installation of new productive capacity for precast concrete will add to the possibility of still moreuse of mechanization in construction. urther mechanization

- 29

of constructiononcentration of resourcesimited number of sites the Soviet government expects toignificantin monetary outlays, which will have their most important expression in terms of the savings in manpower. Alternatively, this saving would enable the USSR toigher volume of construction with the same-levels of labor inputs.

2. Ministerial Structure for Control.

The completion of the most urgent construction tasks5 will be facilitated by the recent strengthening of centralized administrative control over the Soviet construction industry./

Inesponsibility for construction wasthroughout the economy. Construction work was then per-formed by the Ministry of Construction and by construction units in most of the production ministries. Currently there are sevenresponsible for construction in particular sectors or branches of the economy. The functions of these ministries will undoubtedly be coordinateduperministerial level by V. A.ecently appointed deputy premier of the Council of Ministers and head of the State Committee on Construction/

Construction ministries now are responsible for work in most of the branches of heavy industry and transportation, for work in agriculture, and for civil construction projects. In heavy industry, five such ministries are essentially responsible forin the areas of machine building, defense, iron and steel, nonferrous metals, chemicals, electric power, petroleum, and coal./ The Ministry of Transport Construction is responsible for the construction of railroad lines and of ports, harbors, and related facilities for the maritime and river fleets./

Sovkhoz and MTS construction is the responsibility of the Ministry of City and Rural/ Civilis also the responsibility of the Ministry of City and Rural Construction./

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TOP vfcrft i

The responsiveness ol" the construction industry to the need* dictated by Soviet economic policy will undoubtedly improveesult of these tighter centralized controls. Stricter, better unifiedof manpower, materials, and equipment can be expected. Improved planning of construction work for the economyhole as well as for individual projects will probably result. Adjustments in plans during the courselanning period could be achieved much more smoothly.

for Precast Concrete.

The rapid development of the precast concrete industry will have an increasing impact on the over-all Soviet construction The importance of precast concrete is reflected by the percentage of the total cement output that will be required. ver 4will be used in the manufacture of precast concrete. This portion will rise to aboutercent/ The planned output ofstructural concrete and parts ia to be almostillion cubic metersr moreivefold increase in the scheduled expansion program./ Important savings in manpower, steel and lumber, and transportation will result from this/

The plans outlined in4 called for the use of at leastercent of the output of precast concrete in consumer-oriented construction such as housing and agriculture./ It now appears that efforts are being made to adapt this fabricated material more extensively to construction for heavy/

Although the program for precast concrete was slow to get under way, efforts to implement it were/ecent report indicates that the production of precast concrete5 will be greater than/

actor in Economic Mobilization.

The Soviet construction industry requires enormous amounts of manpower, materials, and transportation. With the

-

completion of most of the larger construction projects of the current Five Year Plan, the Soviet capability to move in the direction of economic mobilization is being enhanced. Construction resources could be re-employed in direct or indirect support of an increased military effort.

Although there is evidence that preparations are being made to expand the volume of construction,/ there is as yet no evidence that the Soviet construction industry has been committedarge, long-term program.

-

crft

APPENDIX

SOURCE REFERENCES

Press discussion of policies and problems relating to the Soviet construction industry has been continuous and abundant. Detailsumber of hydroelectric projects have also been revealed. The press has become an Increasingly valuable source of information on construction for heavy industry, with summaries of problems in branches of industry and material on specific projects. Even in*the most recent period, however, much of the information on specific projects has been in connection with the completion orof the projects .

Evaluations, following the classification entry and designatedave the following significance:

-

Source of Information

ocumentary

ompletely reliable

sually reliable

airly reliable

ot usually reliable

ot reliable

annot be judged

"Documentary" refers to original documents of foreignand organizations; copies or translations of such documentstaff officer; or information extracted from such documentstaff officer, all of which may carry the field evaluation

Evaluations not otherwise designated are those appearing on the cited document; those designated "RR" are by the author of this report. No "RR" evaluation is given when the author agrees with the evaluation on the cited document.

All sources used in this report are evaluated RR 2.

-

rET

.

' "I

.CIA. ORR, CSM, Change of Planar East Construe

tionS

>i

CIA. ORR, CSM, Resumption of Far East Construction Project.. S

.

6.

ctual Construction of Kakhovka GES

to Begin Early... Izvestiya,..

CIA. CIA/RRRR Contribution to, Soviet Capabilities and Probable Soviet Course of.

CIA. ORR,hanges in Soviet Construction Plans3 and the Outlook for the Balance of the Five-Year

Sj

8.

Pravda..

CIA. oviet Press Coverage of Great Construction Projects during Three Periods24.

Ibid.

-

-wIA QRR,p.bove).

1 FBIS. Economicoscow,FF USE.

II FBIS, Economic, Moscow, FF USE.

CIA. ClA/RRp... S.

U.

Ibid.

. Ibid. , .

CIA. CIA/RR., S.

U.

.

2.

Ibid., .

Ibid., .

CIA. CIA/RRp.., S. Pravda,.

CIA. ecent and Prospective Developments in Soviet Consumer Industries.

34.

Ibid.p.

CIA. CIA/RRp., S.

. , S.

Ibid.

rn/>

35. CIA. p.nd30,

37

40.

.

Pravda,.-

CIA. CIA/RRp., S.

.

, S.

Pravda,..9. I, U. Stroitel'naya gazeta,..

Promyshlennost1 stroitel'nikh materialov,. Pravda,..

Joint Committee on Slavic Studies. Current Digest of the

Soviet Press, vol2. (report by P. A. Yudln, Minister of the Construction Materials Industry, to BuildersConference,.)

- vestiya,..

54.

62.

J.

rvommumsi, no.

CIA. ORR.. Soviet Fifth Five Year Investment Plan,

. 4,

, S.

Pravda,... 2. U.1..

CIA. CIA/RRp.ravda,. .

CIA. CIA/RRp.bid.

Pravda,J.1. 2, U.

tanskaya pravda..

64.

65.

69.

U.

U.

U.1. p.8. .. Stroitel'naya.7. I, U.

1.

op., S.

.IA. CIA/RRp. cit.J. CIA. FBIS,espective Bases of Power in the Malenkov-Khyushchev Struggle, .

>LA. ORR.p..S CIA. CIA/RRp.., S.

0. .

-

TOP svcbf.t

Iy.vesliya.. .

92.

CIA/RRp.. , S.

Pravda. . .9. .8.

CIA. CIA/RRp., S.

, S.

Ibid.

Ibid.

Pravda,.1.

CIA. CIA/RR..

CIA. FBIS. Daily Report (USSR and Eastern7.FF USE..

Kp. cit. {b,, S. Ibid.

. S., S.

Slovar'-spravochnikpo flotsial'no-ckonomicheskoy

(Dictionary Handbook for Social and Economicoscow, Gosplanizdat,upplement, , p..

- 39

top se :ret

...

.

Ibid.

Ibid. Ibid. Ibid.

U.

TJ.

u. u. u. u.

Stroitcl'naya gazeta.. Ibid.

Ibid. ,

.

.

.

.

gazeta.an 55

P--

4.

CIA. ORR,, USSR Expanding Largest Steel

Combine,. 1,

Pravda.. I, GidrotekhnicheBkoye stroitel'stvo..J.

iM<r

Army. , Intelligence Review,,'

Stroitel'naya. I, U.

.

. .... ..... Ibid.

Ugol', no. . Army. , Intelligence Review,,

Ibid.

.. Army., Intelligence Review,./

.

.

gazeta . .

Army. . Intelligence Review,,

rr"

Pravda

, .. FDD, Summary,, Construction of Major USSR Electric Power Station*.,..

Kraanaya..

FDD, Summary,,, C.

Zarya vostoka,..

|lectric Power in the Trans-

Izvestiya..

ORR, Industrial Bank Trafficource of Intelligence on Capital Investment in the USSR,

Pravda.. I,. CIA. ORR,SSR Expanding Largest Steel Combine.* troitel'naya. .

-

.

FDD, Summary,, og.

Army. . Intelligence Review,,

i

ligei

Gid rotekhnrcric1sKoye etroitel'styo,.. Army. , Intelligence Review,,

,

II. 1. . Intelligence Review,. Feb-Mar28,

Ibid.

Turkmenakaya. .

CIA. ORR,. Preparatory Work Started in East Siberia for World's Largeal Hydroelectric Station and

Long cut TransmissionST Army. . Intelligence Review,.

.

.

.

gazeta,. I,

FD1S, Economic, FF USE, FBIS, Economic, FF USE. Ugol'..

, FF USE.

, FF USE.

Pravda.. .

toiuj

FBIS. TASSn English,USE.

FBTS. TASS0FF USE.

Izvestiya...

Ibid.

Pravda,..

CIA. , Post-war Developments in the Motor Vehicle Industry of theS

. Recent Expansion of USSR Aircraft

HOI

CIA. ORR,lants,S|_

.

4. 3, U. Stroitel'naya.. Ugol', no. . Stroitel'naya gazeta,.... Stroitel'naya gazeta, Zl. 3, U.

.

Stroitel'naya gazeta,..

.

..

1.troitel'naya gazeta,.IA. ORR,, Organization of Construction Ministries for USSR Heavy Industry.. Ibid. Ibid.

.. Ibid.

-

Ibid.

Tacment,., U.

CIA. CIA/RRroduction of Cement io the,.

Pravda,. .

Ibid.

Stroitel'naya promysblennoat',, U.

Stroitel'naya gazeta,. . '

9. .

Planovoyc khosyaystvo, no 1.. .

-

Original document.

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