Tracking Soviet Modernization: Four Case Studies
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Tracking Soviet Modernization: Four Case Studies
A RrKirch Pspei
This paper was prepared
of Soviet Analysis. Contributipm were providedOffice ol Imagery Analysisof Leadcnhip Analysis. Technical assprovidedand
, SOVA. Com menu and queries ate weJeome and may be directed to the Chief .SOVA.
Tracking Soviei Modernization: tour Case Studies
Since ibe bes'inning of hb tenure as General Secretary. Mikhail established modernizatioa of the country's industrial baseop
He haiourse that includes renovation of existing facilities,
of the technological base, and speedier assimilation of
discoveries. The crmcept of "accelerating scientific and technical
progress" predates Gorbachev by at leastears, but, unlikeomprehensive overhaul of previously
untouched areas of economic policy.
Forlan period, the Soviets have specified scores ofand deseloprrvent projects designed to revitalize key sectors of tbe economy. We have selected for detailed examination four of these projects on the basis of their importance to Moscow, the insights tbey provide into Gorbachev's moderniTatioa plan, and the availability of reliable wtrJligence:
Reconstruction of tbe Magnitogorsk metallurgical
of tho Astrakhan' gis^ondensate complex.
Construction of the Amur-Yakutsk branch of tbe Baikal-Amur Mainline Railroad.
Modernization of the Ivanovo machine tool plant
We found that several common problems run through most of thesetoo little investment chasing too many tasks, InsulTicicntand social amenities to maintain adequate levels of skilledproduction and modernization plans that bear little relationresources and the capabilities of the enterprises or sectorsfulfill
breakneck pace at which work is being pursued at some projects in order to meet planned targets is causing managers to cut comers, reducing ultimate production efficiency and creating safety problems. Builders of the Amor-Yakutsk branch line, for example, under pressure to meet construction deadlines, hare opted to use material* that do not meet the rigorous requirements ofailroadermafrost region.
Lack of infrastructure, especially bousing,ccommodate (he large influx uf workers a( Astrakhan' is creating morale and produciiviiy problems. Thisack of invesimcni resources to accomplish both primary and support functionsilemma facing many industrial enterprises) and ihe inherent allocation bias of local managers in favor of the primarybias loitered by the perverse Sonet incentive system
All of these problems arcons of such generic problems as aa overly centralized system of controlack of incentives to encourage personal commitment and economically rational decisions (seeoreover, these problems are compounded by the compter Interamong the various industrial sectors -as illustrated in the case ofIhe resultant ripple effects of shortcomings in one sector on many others. Gains from mcderniring tbe Magnitogorskcomplex, for example, will be slow to materialize largely because of the "chicken-and-egg" nature of the ccrrnplca's relationship withplants on which il depends for new equipment.in equipment arc limited in part by the inability of Ihe Magnitogorsk complex (and other Soviet steel plants) to provide high-quality sleds. But improving the qualitv and variety of steel prcducu depends oss new and better equipment
Moscow has identified ihese problems, but in many cases iu solutions have not translated into workable cures for ailing industrial enterprises Tbe economic reforms adopted ai the7 plenum will not solve many of the problems evident In the four case studies, largely because ihe basic system of cenlraliied planning, supply, and pricing lias been left Intact.esult, cnterpr jc and project managers remain subjecteasure nf central control potent enough to stifle initiative and retard industrial innervation and growth rintoitc Gorbachev's efforts to thin ihe ranks of the central bureaucracy
In the one case we examined where moderniiatioo ts proceeding apace, the Ivanovo machine-building plant, achievements arc coming oolyainful and costly adjusunent period, and sustained success was assured ooly after Moscow employed its standardresourcerior to receiving such support, efforts by ananager lo modern ire the plant resultedoss of incentive funds, bonuses, and other employee benefits that caused an exodus of SO percent of the plant's staff. The Ivanovo eaperience suggests thai,ationalthe period of painful adjustments could go or, indefinitely since preferential resource allocations cannot be given across the board.
I'roblnrn lg Soiirl Modcmiration
! IIK BAM
ffcalai and nodcrairatiOa tnd*
of (Umin ikoiiW
of too-ooUo- -alaruS,
rwb alkeacka drcrncca
fundi tor Vnulai and raid Manila
Although our caie undies can only highlight tome ol* the key problems associated with rnodcsnisjig the Soviet iridustrial base, ihey suggest that, while some productivity and qualitative gains from Moscow's moderoiia-tion program undoubtedly will occur, Gorbachev'g Hated goal ofIhe backwardness of Soviet industry will not be realized in the time frame be wouldontinued gap between promises of an improved and relatively independent workplace and Ihe reality of central control over most resources and economic decisions would prolong the turmoil of the adjustment period and, in some cases, thwart modernization altogether. Unless Moscow frees its industries from the umbilicali of ministerial oversight and adrninisteredeak industrial infrastructure and impotent work incentives will almost certainly bold rrsodcrniration of Soviet industry to ihose projects on which Moscow can lavish preferential support.
View of Industrial ModenraWm
of the MatnilOfOrsk MculluraicaJ Combine
econd Wind for Masrniloeorsk
for Reconstruction: Stayini Home
to New Economic Disciplines
of the Astrakhan" Cas^ondeasate Coniplea
to lhc West for Assistance
Equipment for Astrakhan-
Help From Eastern Europe
Support Services Strained
Oxulruction of tbe Amur-Yakutsk Branch of the Baikal-Amur Mainline Railroad
Rich Resources: Plans for the AYaM
" Housing and Labor Shortages: The Chkken and tbe Egg
of the Ivanovo Machine Tool Plant
Upstarts. Today's Heroes
and Technology Requirements
Moving Ahead in Fits and Starts
Scop*Sovieu haveumbei of major development projects lo be
started or completed duringh Five-Yearaper na mines four such protectseans of gaininginto the larger problems facing Gorbachev's industrialDrawing orwell as Soviet
open soarccs. tbe si aay also assesses the Impact of new, quality control and self-financing on the pace oforaraerraenu recent Dl studies ofuch asihe Soviet Workplace: The New SltUt
I- Plenum and Supreme Soviet Seulonv Building Support for Economic 5aoflg#;tndr
Tracking Soviei Modernization: Four Case Studies
If food use Ii made ofhi Kghe imrgru afh Fnr-Year Flam ran bt met mlng ratuint equtpmtwi.olcietm eautpmrat would In one way or another drag hi backward, timer li would be unable io put out modem yroduett. Old maehlntry mutl bt ttrrn up. Thli it why we art SO drastically ehanrtnt ourolMes.
Mikhail Gorbachev <
V aim far Omi
ft ii iwaanwem rm
Prusetpal ektnetvts of Mikhails*chev'i program lo tnvpeuve Soviet economic performance include rnodcrairieg iisdusirial facilitiesurther developing energy and mineral resources, and suergtberttBg the Iransport infra siruc-lurc. Woven into tab strategy la hit belief that the keyto upfliadtni 'odusiry lies In accelerating scientific and technical progress. Rctngniiing thet the sclentiflc establishnvent has frequently failed to irarufcemaccompliib.meota into practical spplicalions foe industry. Gcebeclacv is diicctiag policy and organiia-tioeval changes deaigned to improve assimilation of scientific and technical devesocenenu at home "bile Improviag the USSR's ability to canon manufactured goods for hard currency. In broader terms, the regime's efforts to improve the efficiency of the industrial bate have meant Introducing new methods of planning, supplying raw materials, and orienting eaterprisea more toward profits
earpecifies scores of mayor development protects as "eil as plant tokey industrial enterprises As Gorbachev'sgains momentum, the saccess or failure of these major projects "ill indicate the ability of bis program to reenetgire the ailing economy and eventually make Soviet products more competitive on world nuttkeU.
Achievement of these goals will require aan invent of investment and political sopporiand bis ted leagues.
commitment. Gertaebev'seed to showceuks without posingrge threat lo the entrenched bureaucratic esiabhthraeel that It attempt! to undermine his efforts. Since Gorbachev assumed power, be has enjoyed more success in gathering support from the iotelugerrtsia lhan from ihc economic bureaucracy and ladustrlal
Tbe need forcomprehensive ntoderulsatloa program is acute for all of Soviet heavy industry. Gorbachev it cslbag oa industrial enterprises to display financial iatdcpctsdesscc aad act on new incentives lo produce Ittgh-qeality. maroods. He apparentlyreak Use cycle la) wUch some iadosirtes fueled poor performance in Others by prewMing tben "ith low-quality materials and equipment. Il la loo early to judge how hii remedy will affect Industrial production over (he long haul, but short-term results have been discouraging. Gorbachev himself has said Ihat ihe taoceas of his program cannot be meat ured simply In lerms of meeting quantitative plan targets. His latent to bring quality-oriented perfrstuaajsce to Sovietistep in the right direction, but, until positive results arebe risks widespreadand confusion over his program. The results of bis clTorts to mcdemize the itsdustrkl baae will be monitored closely by opponents and supporters alike.
The following case studies represent our efforts to track the progress of Gorbachev's Iridustrialprogram. We selected four majorand development projects and era mined ihc conditions under which each is currentlyincluding the elurscteritties of management that
odrawbroaderaboul ihe efficacy ol" Gorbachev'istrategy.bow each of these projects has managedwith ihe recent onslaught of reformsencourage scene enterprises to start "runningmore effectively. Several of theIn the projects we studied may becomeas Gorbachev's raogram for .
Rteoastrtsction of the Magritogexik Mttsuhaglcil Gnaaatal
The gi'rr i; of heavyitandjntecond
Sovcukaya Rossiya aBiwatu mi
Modernization of the Soviet steel industry is critical to the overhaul of ihe USSR's antiquated industrial base Long considered the backbone of Sovietbuilding. Use sled industry's ability to improve tbe quality and varidy of ils products win,arge extent, determine the sdcccss of Gorbachev's program lo produce more sophisticated machinery andAccordingly, Moscow haside-ranging program for iccqulpping the steel industry and expanding the mix or output by.
Reconstructing older steel plants.
Replacing open-hearth steelfnaking furnaces with basic oxygen or dectric furnaces.
More than doubling the ihsrc of sled continuously cut'
Specifically, at the Magnitogorsk Metallurgicalplans call for major efforts to replace outdated machinery and improve the qualily of output. The modernization of Magnitogorsk is not intended to increase ihe combine's total production of metal, but to improve quality without an increase in Iheof raw materials such as iron ore and coke. 1
ni IndUrmor. AtsowncnlC
I'llHal Un Akrtd,
The Lenin Metallurgical Combine in Magnitogorsk is the largest integrated sled plant in the world (see figure J) According to Soviet officials, Magnilka (as the combine is popularly called) aod other prewar sted plants are slated to receive "special priority" ia reconstruction during tbe current five-year plan. The sheer volume of oulpul from theillion Ions of tied annually or aboulerceni of lotal SovietMoscow's call for reconstruction. Outdated and ineffi-dent siedmaking methods hare resulted in enormous waste. According to Pravda. al leaslercent of the finished sled products produced at Magnitka end up as waste and have so be remelted 'j.
Magnitka Is located in Ihe southwestilometers south of Chelyabinskite chosen for its rich deposits of iron ore- Construction begannd tbe plant began operations2 when the first Mast furnace was blown in. Open-hearth furnaces were added, followed by blooming andmills, coke, chemical, and railroad fadliiies
Al lis numerous rolling mills, Magnitogorsk can manufadure virtually every category and size of flat-rolled and section sted listed in Soviei tundards. Tbe combine haslast furnaces, and ils prcducu arc deliveredoviet plants. Tbe large number of antiquated furnaces and rolling mills, however, threatens tbe industry's goal of obtaining improved sted prcducu. Magnitogorsk and other large sted dims tn the USSR arc beset with problems from aging capiul stock such as frequent equipment(Soviei press reports indicate that about half of tbe fixed capital has been in operation at leastean)ressing need for overall rebuilding, which will require billions of rubles in capiul outlays.
Moscow'second Wind for Magnitogorsk
Considerable debate on ways of effectivelythe plant has been under way since.esolution adopted by the USSR Coundl of Ministers called for Ihe plant's reconstruction But inadequate investment and difficulties caused by
dbproportioiu between the capacities of the peoductioo tho pi and support services slowed effort* to revitalize productioru The most recent etTorti to reconstruct the riant arc focused on updatingequipment
progtant to ihirrJj improve the quality and variety of tied producti haa put added prtswitc on Magrdtogortk and other Soviet Heel planu to modern ire equipment aad procestea for producing monger drill pipe, highnerfoi mince electrical theet for trtmfot iiKi i. and tpecial alloy steels for lighter, monger, precision machine tools. Included io the current scheme lo rnodernlic Magnitogorsk are plans tot
Construct large basic eaygea faraacra and phase out several of Ihe smaller open hearth farnaces
" hot-rolling sheet metal mill to replace theill as an energy-saving measure.
ew sinterto prepare blast furnacereplace the existing plant.
Construct new coke batteries and celiac some of the old units.
Coristruction teams at Mngrutogorsfc bareommitment to complete the new oxygen furnaces by9 (in honor of thehsix months earlier than called for in the five-year plan. Equipment suppliers have also agreed to meet tbe earlier deadline. Snch commitments, however, are being stifledesult of shortages of materials and an inefficient allocation or lhc ptani's lirnitedresources.
The cosu of Gorbachev's steel modat ionare high, and competition for renovationfunds Is undoubtedly slowing some ofunder way at the
_J: lie current financial situation in the Soviet tied industry as "abysmal."
severely restricting some planu fromfor modernization. Soviet mediaoted that the "main task is to findforndicating that limitedwas hindering llmdy Installation ofil Ihe
UBoa ia ouioi for
acini oimlod bttiiK of tare
or Heeorrttraetioo: Staying Home Allhough purchasing Western equipmeni forthe sled Industry would be tbe quickest route for speedy reconstruction at facilities such asreduced hard currencycould last ai least through ihe end of thissharply limited Moscow's acquisitions of highersupplies and equipment from the West1 Moreover, theoe East European suppliers of sled mao greatly Increase production of machinery for export. Open-source reporting suggests Poland is notosition toubstantial portion of the
' Aant millJ"f. lor iuMi
loatflnne Mfd Inrotect.rif inillr
The chid dolgna lor id Mninilntixittaiuict. The no* euchina, Ike firvt of ibesr kind in world prvcitcce the
opabilii* of canlntor lowmicMna
d br reduced merit Inpw.se iSopchr ImuBcdnotute.'
eeds foi vcrvtiiitieaied metallurgical ma "ihe
Polish rruehlne-building industry ii suffering fiain labor shortages ind ma; have problems increasing rxoductron enough to satisfy the conniry's own re-Quiierneou The Vitkovicc combine ia CwcSvstlcwahra it fill ina: ordcn fee rolling-miO coaipcneat itbai an obsolete quality tont rotas contributed lo what I'rague otnCiali hue called the "long-term problems" of iu machine-bui Id ing icctoe, suggesting Magnitogorsk officialt may be unabtc lo count on receiving quality machinery /
Thus. Magnitogorsk will be most heavily depended on lhc overburdened domestic ma eh ine- bul Id IngTbe Zhdanov Heavy Machinery Association will build ihe basic oxygen coovcrtcri forfocal point of ihe reconstruction effort. However. Ihe Zhdanov Association, which is also the mainfor renovitf ihe Atovslal' steel ptaai. isuffering from manpower shortages lhat haveed construction of Ihe convert en and aoto-maiiou and control systems lor she Magaiiogortk project. Inkrainian party chief Vladimir Shcherbllskiy singled Ml the Zhdanov plant forpoorly with the new guidelines to reduce the amount of obsolete equipmeni produced by machine buiMert.'
pravda hat cnticieed the machine-building loetor ie general for slowing recottstrttction al Magnitogorsk, According*6 article:
he main partners of the mrialworkrri are ihe machine hillders. Unfortunately, mueh of the production equipment which they supply Is still inferior to similar foreiin equipment in terms of metal consumption, rtllnbillly. Ie*el of mechanization and automation, relative eon sumptionrlcami and inner parti, and productlwlj per worker
' Poind .InduHry il ill rqwprwri
prvrajtet wmr wiili">iir*cd nunhtntry ilic ttim
rutiinif far tmeirrs per ihr
rrfil jo Kin
The Ural Heavy Machinery Plant (Uralrnath) is alsoeading role in Magnitogorsk's modernijj-lioa etTotts. Bat ia rctara for Uralaaash's production
of eortisvaows-caMing eo/iiproeiK.o tnp-pty high-quilhy metal to Uralraash' Both Uralmasb and Magnitogorsk have been criticised for producing inferior pioducts (by worldhat do not meet ihe demands of modern machine building (seeHb both organitalions producingquality output for each other's needs, their inter dependence bas created aihe capacily lorrtasovalioa Is inextricably linked to depend' bit del..er iei of quality equipment, wtule the prodoction of the tontinaous-casiing equipmeni at Uralmash requires me tab Maiallka bas difficulty producing.
Adapting to Nrw Eetaseadc DbdpCnet
In addition lo Moscow's dciiiartds for retooling, many plants such as Magnitogorsk face ihe additionalof adapting lo new programs that pressureand plant managers to change their workiscary session of tbe Cbetjabiosk Obits!Committee laarty members criti-cued il eel workers at Migr tit who reportedly bad not fulfilled eontracical shipment commitments aad were poorly prepared for the introduction of stateorkers were also critkiied for failingmooth transition lo muitisriifl work
' litil Uotruih wortrrtenl" lilted lr> early
ilmuk piMtfd "io ntimtiaun
Stllxrinvrlr awif*uwn Iw< f_
w infa) amrnli nrr mt
sum it* WujJirw rt un Mcpuudiw iruhtmmry irtl.
txuoiad mm* niiu|
cnorf opWy rmtiel mretnmtmtn ctfSfl at
rtfcri'scu on Wm opiniinM. TWa
uA twai Matoiioiana. bnvtua. wtddilnnil luk ol mrrlint tmnmd mitmn tmu
duringidt uiBm inrmiivq In tnonnt pun |imHhi iiidiilimlSaiinla Ul tooli iivnlur"hat hr% Sjnf ehtrieirrjrrd iwKr
Quality af Soviet Machine Building
Distrust toward equlpmem produced la ike USSR hat become deeply Ingrained In Soviet plant manag-tn. Officially, at Iran tkr Soviets discouragr ikis attitude, claiming It Inflictsharm'on
the development of domestic rrsrarck amd production
resource* In various brmncha of Industry,n ihe seictmbtc and itchntcml caavumntty have argued that If foreign imports areill promote domestic efforts to speed up technological progress and ultimately lead to advemcements In Sovietand technology. In a*8 speech. Gorbachev noted: "Today, many headsften see only oneas much Imported equipment as possiblt. Thli Isay oui of ihene should rely on one's own. Soviet engineering.'
The ditruptron of prod union line* that occult during any reconstruction project hitteer bated by lhc difuculiles of adapting In Ihese ne* disciplines.1
Row-llM" of roftinf. mMi foruallyilai It*
(nilfly br ikuin um- imiinin. kowowr.i nol rerpoired. Mm mo tuM oirt'n furnaces sea baih at Miiano-
l-"lk. (ori Ihe Sotlatt upon Uwlopen-kranh><
Ihn pl.il wot bttllikmifkMp kern produttloa up duiinilia Mil* Sa Bonne oailny in ihr utfiijl drawn out coniiroMMn pernio
The current state of Sovin machine building,suggests domestic solutions have been Insufficient to renew the machineryeputy chairman of the State Planning Committee sold In6 thai the nuschlne-bulldlug Industry and lis bate oftechnology urrong way from completely meeting the requirements of rapid economicBureaucratic teparat on of research facilities from production rnltrprtses slows the Introduction of new technology into the production process.the special!ted equipment needed for renovation projects Such at Magydiha requires am Innovative approach, which the current Incentive systemUncertainty ovtt tht working tkaruclrrtttlcJ of new matrrlali or proeessri amd the availability af supplies itnds to discourage Innovation. Underpressure to boost output. Soviet machine builders tend to continue producing the same types of equipment they have been making for yeari
In5 lhc Tndc Union Central Coenrnillce semrto troubled enterprises within ihe fettcas metals indasiry to improveand render practicalrr inproductionrigade ital Mif-itogortk. aad. accordingonet metals mdvstry journal, the btigadet have eased scan*rattled toami tun in new txwitsaaeM by establishing tpecial material incentives for shifts thai eseeed prodaction plant. Tbe Ministry of Ferrous Metsllurgyo iastntctcat enterprises to move workers from more successful production lines to those ihat have problemsag production ouotas.
5 Magnitogorsk was patelf-financingnew refurm thai was appliedide scale throughout Soviet industry inhe Soviets report self-financing helped the plantercent increase in labor productivity (ts much in one year as it had accomplished In tbc previous fiveut Ibe level of profits isto meet the demands of self-financing. The enormous reconstruction costs, for nmrnplr', have left little for new housing and social amenitiesity where the average waiting time for new apartments isccording to plant officials, the combine is currently devoting about half of its profits to pay for reconstruction. Tbe remainder Is used to pay for new housing and other social amenities. Accordinghe combine's chief economist. Yurior that, we itill don't have enough.'
GorbscheVt reforms hive also placed greateron timely contract deliveries. As produclion lines are shul down for retooling and labor is diverted to the combine's recent!ruction. Magnitogorsk faces
ctles ot repeat! itifcillrit tuppori attvleta Ulere net prepared for Ihr larrr rnltui ot wortm reportedly
prompted la* local track anicri iaortallrKatc eSoscio 10
pertent of Ilw capital iliocatod for ibt (rcoaiituetloa tlton to ncrvrdwtriil connnictMw. pcrsmMr lOCWlHaton tuuini. Aecmdlni io Sorkt ml mam, lag lo taroe times men vrakoi frail are oaneeily oa tin arcrrQuircd (ei Ilw overall rtDHBtructiea ttton. Uclodlrif tnilnrm, toiuiiaclrcn penrwocf. ant Intra-indusli) aatuluati
cosily problems meeting iuhe ptnnl paidillion lubles in lines for failing to meet delivery schedalcshe wisdom of levying inch heavy lines on planu under reconslruction has been the subject of some discussion in Ihe local press.-
ProsprcU for Success
We believe thai the heart of the reconstructionbasic oxygenbe close to compkiion near the cadhis facilityritical link inrod act ton capability, bat chronic probletrti ia caber areas of the plant, sach as frequent eouipment breakdowns, will have to be sotted before the combine will realise ihe beneAu ofoe! ma king methods. Thus, iheteams' commitment io finish the workshop by9 miy result In "symbolicut the eouipment probably will not be ready for fall-scale production for some time. Tbe systems for remote control of furnaceare usuallydo not fsssvctloaibe main lines of machine tools for cutting metal at Mignitka have been described asnd rolling mill have generally been equipped with leaky hydraulic ty turns.
Soviet press reports also suggest ihai
the overall modernization project is behind schedule and thai delivery of the equipment could be delayed. Atth Congress of Mcullurglcal Industry Workers inndustry leaders hintedack of cooperation among the corutruction workers, machine builders, and metalworker! ai Magnitogorsk.
ii MiWaatoraataaaiiaawvk mo a
wrribtni Ihr (osUca twdihrMtgnl lofotik. In addlt*Nitm (htr otool lervtoM t* ihr area, hu undid obvivaitoM niuiiidlilwty dtbala In Iht niwipintr atoul prvbltini In Iht nutftrnira-
lionht iittl taani.
Iktvelormewt ol the Astrakhan*rnplrx
The icale and ratei cd work la Astrakhan'art eornparable to tueh tttanilf iltet at ihe
Deputyhe Got Induiiry
Devetoevneai of the Astrakhan' compter is one of four key oil aad gas pro-ecu schedakd for compleiion during ibe current five-year plan. Moscow is intent oa fully exploiting ihe rich rtsscnircra al Astrakhan* to offset declines in production from the Orenburg and North Caucasus natural gasfietdi. Currently entering the second of three, and perhaps four, phases of planned development. Astrakhan' it alreadygas. but the drilling and completion of wdb are years behind schedsle (tee Inset) Eventually,illion cubic meters ofillion tons of conden-satc. andons of licruefied petroleum gas arc to be recoveredn additMa, up illion tons of sulfur art ripeeied lo be recovered cacb year and will be used to snake sulfuric acid and fcrtil Iters
Tbe Astrakhan'ocated la ibepart of ihe North Caspian Basin in the Volga River delta, aboutilometers northwest of the city ofl covers an area of0 square kilometers and conslsU of many Individual oil and gas deposiu. The geology of theomplex, and operating conditions are etircmely severe because of Ihe great depth and high formation pressure of tbe sour gas deposiu. which contain hydrogen sulfide and otber iieaahydrocBrboni lent. e. iCc*o-
wnawi naaatw jwi rwar-
mm. Imp aainrina otmij ba aradvcnl iht (as. Tho* Isiudi to ootail tone bai ana raxm Halt in ihi* ThU iMvK fraction It oallrsd owdccaaie awd ihtnwai> rondtauic rod-
tiii, io Sevtti Hudka o* Iha aria, imn" mwom al
Aiiraklua' artpti Mailt InchtOdraim C. (IH) il.tr in Ft. aad iheiai may (oonan>iaptriw* hrdregin lulflat it wit percent cathon dm^4a
i af Astrakhan' Development
Commlettemtlomeirri of pipeline.
< un.'truetlon of gas-proersslng plant.
ConstructioniO-kllometer carbon dioxide pipeline la Our ye* oilfields.
Exposition of gas-processing plant
Phases III and IV
of addilional wells as old wells are retired.
tlcaied technology it aeeOed to remove these irnpuri-im before tht gas CtB bt trant pipeline Moreover, the gtt-pr - nd tnrttr>ott facilities require carrc* loo-resistant materials,1trots, tod Oiber expensive equiprnenl to ensure safe tad effect/re etraenuiton of Ibe decoait*
The largest tingle depositdiscoveredul eaploralion was put on bold becauseack of eorrotson^rjjsunt tubing, eating, and drill pipe. The firti phase of Astrakhan'inby subeianlial delays ia drilling actrrily end well completions duer-quality docncsllc ctraip-meal and dimeatty assimilating new trxrbocriogics aoqulred from ihe Weal. The decision lo purchase state-of-the-art technology and equipmeni from the West reflected Mcsccw'i recognition that Astrakbaa' developrnetti would be seriosssly hindered without coinpuler technology. high-Qaaliiy drilling equipment, special steel tubing, and technical integration systems. For example, deficiencies in domestic equipment ledajor bicr-out* dec to ioir ration and collapse of lhc well casings
Nevertheless, wort on Phase II began shortly after the French enjincenng trus, Tech nip. wasontract for ctpartsion of Ihe gat-rroensing plant in
5 ifigure si Despite the use of Western crpiipnsesst. laa safety suasstards nave ooatiaaed lo ptagne the project. Another ea plosion inT at an underground gas-smfldensetc storage facility, for euro pie. killed four rsersons and resulted in ashaatdown of tbe iis processing plant (see inset I
ticca use comrrseraal espioitntion in the Pre-Cespian Basin is estrnoely difficult andincreased acqomuoo and association of Western urinology will bef eapuralion and development arc to accelerate. Since Gorbachev assumed power, he has Instituted several change* In the foreign trade rules ilesigned so improve the ability of indrvidoil enter-pi ise* lo purchase Western equipmeni and arrange joiat ventures. Such aningcmcuis are essentisl to developing Astrakhan', where most of tbcchieved lo that point la exploration and drilling could not hive been achieved If only dacnestic equipenerttmuch of it unsafe and in suited io ihc geological environmentbeen used. j
Tersakssg la the West ft Aailittari
Contracts for Western equipenort havt been awarded io France, ihe Neihertaivdt. Weal Qermsny. Sweden, Canada. Japan, and the United States (seehe Soviets hive recently shied away from Western particularlyrntrchsrsetv. lethag Wencm bluirirasrnrri in7 that hard currency conitralnit have been responsible for the on-and-off nalerc of recent negotiations
Moscow has gceicrally preferred non-US suppliers because they can offer suic-of-ihe-ari equipment at moreive prices and with more ttiractive lane ring. Although the Scwiets have rua into scene i'umb-ingbkx-hs because of Western earsort rcgula-lions, Moscow has managed to arrange delivery of an imprest)re variety of computers, drilling accessories, and seamless tubular steel In spite of the tight budgets under winch many Soviet industrial projectsfenced to operate, developmenl it Astrakhan" has
givenh pfioriiy.'* Two of ihe largestiii for Astiekhan* development with Technip of Manet and Majutcinunn of0 million. The Soviets have estimated lotal investment fot developing Astrakhan' Beads and cooitrocting facilities ataDson. i
F^vipcarat for Artrakbaa'
Although tbe Soviets have purchasedsi table amount of equipment froen Use West. Ihey still mutt rely heavily on domestic skills and eouipment In particular, tbey have continued to use dornealkequiratsent. despite problems with qualily and reliability. Even with qualily hardware purchased from ihe West, the Soviets do the construction and
assembly work themselves, and. In many cases, the -anils do not measure up to Western standard!.
bus, many of the problems encountered alresult from ibortcocniop common to much of Sovietas those illustrated In the case cf Magnitogorskand demonstrate tlie difficulty Moscow will have trying lo modonirc basic faalitiei and simakanraily imleiaia forward momentum co eh asor eiample, develop-of the Aiiiakhaa* deposits depends heavilyariety uf domestic machine-build ing andinduitriet. all of which have been heavily criii-eUcd in ihe Soviei press for iheir lack nf support:
i..' r r bf
Ing example of the dangees Involved la developing tour gat deposits. Scorn of safety violations were documentedtrtes af artldet Im the Soviet new,paper SouUlbtkactkar* uvJatUtytt la March
wen twmltted to emer am area ofreased danger"from lectle gaiei without wearing prttteettve gat masks.
Intrndrd for use In an emergency evacuation of families living In the area were found unequipped with necessary medical supplies:est of emergencyone of the drivers answered the alarm.
A special Investigation Into the deathenior operator revealed no one had discovered his absenceork shift. His body was foundand evenedical teom had to travel only abouiilometers, they arrivedinutes after ihey were called.
A syttem of Intercoms between various Installations designed to enable quick communication In the event of an emergency was not In operation.Tj
The list of violations also Includes Imperfections In welded seams of pipelines carrying toxicack af Instrumenti to warn of the presence of toxic gases, and flagrant carelessness over establishedprocedure!.
Mio.nr, olower, sad TransportBuilding wt. singled oat for failing to produce equipment for drilling deep wells al Astrakhan'.
The fcrroaii metals industry. coMbnously criiidred for failure to improve the qiaaiiiy and variety of iu nrodueu, has been beroled on several occasions for not developing corrosion-resistant pipes.
The Ministry of Chemical and Petroleum Machine Building bas been censured for -failing lo master Ibe oulpul of nm'discharge equipmeni to prevent blowouU to cnsuic on- lite safety."
The Ministry of Instrument Making.uipment. ind Control Systems has come under lire for iu slow pace in producing instrunvenu and automation cquir^ncat"
" *lllwaik It. aaaOwaa afbl.
aw> a. ". .taa. wt arv tktr ta mala ihavnaaaiTtatwtaalnii Iw pn'SatW ufaaBWf aSawaaaa OW Went arxral ranIs.
taoaai mm mm
Limitedoan Eastern luropr
The Scmcu have pureJsascdimited artsount of eouipment from Eastetti Europe Eastducing drtlllag and prcd-ctionarc severely limited, leaving the SovieU to rely largdyquipment for ihe task. The Sovieu are depending on Bloc labor to help complete pipeline work, however, and are rdylng on Bulgarian treetalisu looviei-designedstation along the caiboo-diotkle pipeline from Astrakhan' id the Our'ycv oilfields. Hast German. Pol iih. and Ctcehoslovak eooiUactkiti workers ate helping build the lirsi section of ihe pipelirtt
Lack of udrastructure, especially housing, to accora-modate the large influi of workers at Attrikhaa' is creating morale and produetivilf problems like
'bene atreflects tbe Ue* ofto accomplish both primary and support Func-tioiii and the Inherent aQccatidn bias of localin fiver of thet (he7 Central Committee pica urn. General Secretarydescribed tbe litunkat Astrakhan*:
Here they hare assimilated more than IJ billion rubles worth ofhere Is en armyorkers and spectallsis employed there, but only iJXtO af them have permanent housing. Moreover, the lae In the construction of housing, polyclinics, dining rooms, and other facilities ccf the social and cultural sphere had been built in the plans from the very beginning. This Is the sad result of an Incorrect, erroneous approach to social
According to one Soviet press report, someworkers are envious of those who sleep in rail-cars, since they are unable to find anywhatsoever. Some reports indicate Astrakhan* workers are forced to camp inside abandoned thacks with ileeping bags or to rent cellars from coworkers. Gas ministry officials are becoming Increasinglythat many workers may quit their jobs out of sheer frustration with housing problems and the poor ufety record. The chief of one of tbe project's drilling adnunistralions exclaimed inHow long can tbey goon likenother year or two? Then no amount of money will keep thembort-ages of medical facilities and public services arc abo growing at Astrakhan'. As Phase II expands, Soviet and Western labor complaints may rise unless housing construction and the sphere of tociil services isnded
bousing situation ia Astrakhan' was in poor shape before tbe discovery of the gas deposiu, bul it hat worsened with tbe need to accommodate thousands of new workers.as ministry decision not toeparate settlement foreans to save limitedesource* for purchasingcreated the additional problem of transporting workers from Ibe city of Astrakhan* to the'gas deposits
in the work there were largely attributable to commuting diBscultics that haday-to-day aggravation for foreign technicians working there. Housedrom their work sites, West German technicians found travel to Ibe work site ineEdeot since tbey invariably spent four or more hours perong waiterry. Since then, Ihe Soviets bareridgeide branch of Ibe Volga River that serves as an alternate commuter route and abo have openedailway line Unking tbe town of Asuakban* to tbe gas-processing complex.
The fatal accident al Astrakhan'of the mnltllayered problems the Soviets face In developing the rich gas deposits of the Pro-Caspiannsound technology, poor constructionand Insufficient training of personnel in using new equipment, along with the chronic equipment problems lhai plague much of Soviet civilian industry,rescription for delay. Wiih additionalhelpeliable flow of bard currency, the Soviels could hasten the otherwise slow Astrakhsn' devrJopmenl. Tbe Soviet press bas indicated lhat another gat-process in; unit will be manufactured by domestic industry, but in Cgbl of tbe poorof Ihe machine-building rector, we belkv that development will continue to ra-oceed slowly
We espect Moscow to remain committed todevelopment, but Ihe potential for another cota-strophic accident increases every day Ibe Soviets drill withcjl ib* use of sophisticated blowout preventers and ins (rumen tat ion currently available in the West. Corrective nteasures were taken following the latest accident, bul lhc SovieU seem to learn technical lessons slowly In thb area aad will have to move
of the problems associated with labor transport have been solved, but Astrakhan' city authoriiiet still find themselves witheople who have no housing al all. many of whom sleep in raikars.
careful!*avoid tnoee safety-related delays.the housing problem will continue as long as investment resources remain uul artd (be const ruction secior cominues to perform poorly."
f thr Atwer Vakutst, Brsneb ofurw,
The absence ofrtery Is kedasng back both the development af Yakutia's production fortes and ihe growth of the republic's comrtbu-Hon to the country's national economy.
Yurly Prokapyev First Secretary of Yakutsk Oblast Party Committee uhrakim
The 1st (est Soviei transport construction task since the Trsrts-SlbersanBaikal-Amur Mainline (BAM)mother essmpU of Soviet partners running ahead of available resources and conat radian apetusttitss. Traversing dinseuh ra vironment between Tsysbet in East Siberia end So-vetskaya Gas-an' oa the Pacific coast, the OAM was officially declared completelthough full operation of Ihc railroed ts years behind schedule because of numerous cot. struct too defects and unfin-is bed tunnels and bridges. Mc-rrvw't plans call for tbe BAMe brought into fell operationut kilometers of mused track are now rusiing aad many serious engineering problems remain unsolved.'
A major pott-BAM project the "Littlecoosastiorth-south line running nearly 4O0 kiloenetrrs frommall station onata-Siberian Railroad, north through Tyada oa Ihe BAMWni.it in Yikutit (secingle-track eatension of theMainline, orconnect Betkakil
- GorkarW'ealct toMtnt km iraili iHrjiM ttai men tttjrtcUut WVtiat.in liewwSlOoo-
www. rtmaim a* tw tan. tr *h
' Sot Dl lewll-afCTSO* ItA
elmmf: flnMnt6-faVa Sftir
with Yakutsk, passing through Churrrun. Aldan, and Tomrnoi Together, the AYaM and Utile BAMkilometer oortheio btartcb. tbc ma-yor train port Orvxkrprnem projecthe current five-year plan. If eonspletrd. the AYaM wtB mark lhc Ural limeailroad has penetrated the Yakut ASSR and will represent the fulfillment ofSoviei goal thai dates back to ibc turn of ibc ccsuary (see figurea eaietuaon of Use AYaM lo Magadan on the Pacificthe AYaM is fullyunder discussion.*
Despite tbc importance that Moscow has atisxbed to ooasMruclioc of ibeack ef seleq-jite istvest-rrseai restorers has already slowed (his projectear halt. Aa erlicle In Soviet Geotraphy saggests thai the AYaMas an outgrowthbe enthusiasm during the early yean of themay be symptomatic of the type of massive and somewhat futile developrnent seheencs criticised byisS speech to ibe Central, Cominlllce. According to the
he rrgtan Is /vutttlokiy gajsssjatrrraf by Send-el planners toraveyard for Investment capital. Capital and labor art used lesshere than ta any other major economic region In the RSFSR
Like lhc BAM. tbe AYaM was conceivedadly needed transportation linkatalyst for Ihc developmentast resource frontier. Just as Ihe BAM ippears to have become the "white elephant" of Soviei transportation projects, however, the AYaM is ia da age' ofimilar ersttrac Funding for the project came under close scrutiny whenconsolidated his power in Ihe summer and fall of
touiUveiMwof IW Utile BAM't twNrnbetween BawiUri an- Tr-aa srsaa ioWtartlilt
of iW BAMoatert lalti
m Waatti et Mw
BAM ctnalMtn IW teeH'irw Smiki of im LaiSa bamtht AYaM TV* liitlt BAM mai lUmnMitel lo BoSitiiItlli
nd real funding problems (or tbe project begin earlyorbachev hai not eanoeled Ihe project but be appears lo beard look at Ihe feasibility of large projects like theesources oa
FiytolUag Itkh Rrtaarnar the AYaM The ronie of the AYaM ran* aorth toward Yakutsk over tbe Aldan aad Lena Kuci i. crouiag moanisias and pertnafrott. large tonic development ol* ibemineral deposits waihe postwar years, but il hat been plagued by supply problems
largely bccauieoor traraportatlon network, la addition to lowering ibe costs of cargo shipments from Yakutia and the northeastern part of tbe countryhole, the AYaM it ibe single meat important link to eaptoiting the unupped rraourecj of the area. The Soviets eventually plan to develop southern Yakutia into one of the country's largest metallurgical centers.
secerary of tbeea rted that absenceail brae 10
daimlnf that whik the BAM was intended for the long-range future, tbe AYaMecessity stow for deliveries lo and from tbe Yakutsk region. Ia aa interview in Ibe Soviet eeasstrut*ice, ycwrnaJ, Slreilrl-.tbebrsti
Yakutsk has 1
of Yakutia's mineral wealth- The AYaM faefliuie trade with Japan, Nortb Korea, and Cbiraa. In the short term, it win allow better use of alreadymineral deposits and hasten deliveries to ibe BAM for further transport to processing facilities or delivery to seaports. Tbe AYaM tsritical link In the mtesrrated devesraurtenl of tbc entire Yakuiie region, helping to aid long-term estplolUllon of the region eocornpassed by ibe Yakul TerritorialComplex (see inset)
" Thr truncalOr art* nn >tirad,In thtti Mlillioalota of liottat sir datWaaed s*
1 ht lata Rnw amwiliy Thr lataaro* ln<oca year,aruancelDtrm to am- mtmU-a, aqne. Ptaw eai lor oarnilit-jn
t lioiM to to Moled woo ihe amtar wonIn.ait.M- AlUWurV ether mMiraaa-on an artaUtao on. wwaor lea rar-Si.allo<rutafatu,
issatwsssssl aaaaaaaammaamm. Hwae-w. uwaf ausw ata meat*Vatsssstnaaa aaaaas, mm
laial aaktalb cstiwita.aa af law afa
plans cal for the AYaM project to be completedany regional tsmciits arefor fitter developmenl of the railroad, however.
Thr Yahmt Territorial i'i swweriiow Camples
The Soviet concept of rrgtowal devrloymrm he* mo rral counterpart Im ike Weil. "Heglonailialloa" il driirmedaxlrrdst theiven area. Territorial Produclion Complete, ITPKs} havebeem designed to foster eoettplemrnlary aad economleallf related drvrloaunrmtiieftany ofplans for the eastern trasupar-atlon artwork. Imeiudimg ihe AYaM. are designed to ensure aevriap-mrm of ike Yakut ASSR. ' '
The economic life of Yakutia It lied to the Lena River. Ill main transportation trunk line. Bul Its capacttr to handle larte volumes affreight has became icverely restricted. The success af ihe, Yakut TPK depends heavilyeliable transportat ion network to haul raw material and fuel toai.ir.li Im the Soviet Far Bast. This TPK It the fieii In tht AYaM region and Is orttnttd loward tht Pacific coast to which ll has been linked via tht Trans-Siberian Railroad It is bring developed as partong-term compensation agrrrmenl with ihe Japanese Ocrvxranrnl Initiatedn which Japam agreed to provide the Soviet Union with credits worth ItiO million for purchase af equipment and some consumer goods. In return Tokyo received tht right toillion tons per year of coking coal3uture development of thr Yakut TPK will Include the large Iron ore dtpotlts near Aldan and ether nearby mineral deposit t. Much of Iht region's mew mineral production will probably be used, at least Initially, foe export.
project can proceed on scheduk. buland Ubor shoe lasts mayi nope.
Ot*vtneto tn Pirr
Fimrxii'j.fproblemi attracting worken will not be easy to ewxroorne snd win probably delay completion of ibe project by many yean, ilowini tkveiopment of ibe region Some of the problem* arc limllar to those experienced during BAM coostructko- lack ofpoor-quality equipment, aad hotiilc weathercertainn tbe AYaM. went unforeseen by plaaasen and have raised serious concerntbc ability of ihose ebargedYaM oiirinruition lo complete tbe ptojtct.
Financing Problems. InT the Soviet Bank for Financing Capita) Itrvestment* (Stroybank) announced it had slopped all 'tpecial financing" for the AYaM project. Touting the need for tuictcr firancitl ducapwwt,laimed that the USSR Miaastry of Rairwayt bad drrrrladnillioo nibtet Intended (or the AYaM lo othersuch as completion of un ft ribbed aocttoni of Ibe BAM.svestlya ankle, tbc Ministry assumed Stroybank wouldthe necessary fands for the AYaM and therefore taw ao reason lo hesitate over diverting capital to Ibcusanc-ing problemsimited amount of construction on tbe AYaM enrrtinactate7 press report indicated "general par-pose funds" allocated by the Ministry of Railways are currently being used to food AYaM construction.
Threonttyl of*the Territorial Production CompUt vatV-rrV1 ty H. H. KrioroiHr InmnttL Specifically, ki wrote Tke win rrotacilo* cc-ytet ii rfWa lo on economic (Interrelated, cewtt-UaHoo of enrrrrrlui at mm tVWVr-
rflof Uir tn an ewire retkm.gSalte rroaomle effect It achieved Ikeoufkimetilftd v trrarrrrtlrs In
I. lutttumi of tke 'rrdw and riih In I'onipoeintem redecemamtc^eatrapkle thaalkm.'
Them section of theBerka-kit toscheduled fee completionith theilometers to Yakutsk to be finishednlike the BAM, AYaMdoes not requireuilders belkve lhal the
Soviet transport officialsressed growing concern that financial probkrns will be resolved too late to ensure completion of ihe project on schedule, which could result in dangerous and hasty cnd-of-plan
. Ibe luuIhecuiorTiiroiiii'tatcd otber otauda i'- AVaM faced. Ac-ctrdinf to Irwulya. Itc Minitlrtodnd apt-ond the AVaM rrajcttrtatrdthe Metcow Sin- liaHporuUM Dcaifa Sareaa MlMnry aendab iticraicd thai, cm if He additkeul fwlieawatracticn atlll couldtf tallied emttlnw ihr inreilic rjceitei-planIhe AViM were will unrtei' toprojea plunen
"storming" to finb.li traeklaying. Many of the defects discovered on theas urirtntthcd bridges,acks, and untsecesxarily deep grades--have been atciboied to tuch last-minute ruth work. One Yakaukressine for the establishmentpecial transport construction trust to handle these problems.
Hooting and Ubor Shortages: The Chictrn and the Egg- Workers are besitarrt to settle peroianeoily in the area, both because adequate housing isand out of fear AYaM financingcontinue to now erratically, threatening bonuses and construction of health care facilities andtrtdtrt'naya gazeta article in7 noted that the lack of comforubte boosing and the rernetencss of tbe area were scaring workers away, and that if litis shoalion remained unchanged, the economic development of the area would be threatened. The article. those, for whoseas built, will not be able to use Iuoviet report on the BAM noted that, on average, one-lhird of the workers in tbe area leave each year, chiefly because of the shortage of housing and schools. The AYaM area, with an even less developed infrastructure. Is having at least on equally difficult time attracting and maintaining an adequate labor force,ive-Year Plan calb for theofquare meters of housing along the AYaM route; according to the Soviet press, the actual amount of living space per Individual along the AYaM Is only one-third the USSR national average.
The USSKhole has been unable to meet boosing construction goab for some lime, but the situation along thearticularly acuteof Ihe remoteness of Use area. Without an adequate work force, however, little additionalcan be built. Moscow has suggested to Vladimir Brezhnev, Minister of Transport Construction, that an AYaM housing coBStrttcUosi combine beto solve Ihe problem. Establishingombine is only an idea at ihis suge. and. although it might prove effective in the long run. il could create additional delays for Ihe AYaM project
Poor Plattidttg. The Little BAM is already suffering because the volume of freight (raffle wasduring the planning stage6 (he little
HAM alreadyolume of freight that was planned forDespite ibb experience, there are strong indications lhat planners are making the same mistakes in their calcuUlions for theoviet television report, each day several freight trains are delayed because of major repairs being carried out oo ihe Little BAM. Like the Little BAM, the completed sections of tbe AYaM extension are already showing signs of overuse, aod transport specialists observing Ihe construction havethat panners on tbethose oo thetoo concerned with meeting deadlines and are cutting corners with poor-qualityrisis tuch at rail and baltan. Moreover, they have opted toingle-track line, despite prccortstructton estimates that indicate tbe area will require at least iwo tracks to handle projected traffic volumes. Tbe Utile BAM-was builtingle-track line to save lime and money and already bas difficulty coping with the coal traffic from tbe Ncryungri deposit.'
Technical Problems. Fiscal, housing, and planning problems aside, the SovieU arc faced with several technical obstacles thai will continue toailroadermafrostn immense technical challenge, bul Soviotbuilding bridges and laying track for tbe BAM indicates thai soch obstacles are not insurtnounuble (tee Inselk On the AYaM. the Sovieu will need to buildridges,m span across tbe Lena River. According lo ibe manager of the AYaM's bridge-building trust, the Lena River Bridge will require at least eight years of work. Bui survey results, feasibility studies, and general plans for the bridge have noi yet been completed. Althoughof the Aldan River Bridge south of Tom mot has startedurrently scheduled for completionuoybank'l euioH of funds In7 brought worktandstill
*a ot Ike areait two met) awM be noioaryhandle it* imtftti. eual ran era.ractiioj
IreiaM in U* Little BAM ntitw, m< pUuers opted -or ooenihil pnann would come oorztij. The local foduiirfoi arr
Link BAH wai quicklyotsuwrUon (Bief on it*
pnQcci (omaKMrd. -fla apuiiia -ite ognaplndy osed w> ihrw ran aen'
Tkt Ami (TV climate of Siberia prrsrnts formidable lethnical obstacles loailroad thai require i lrll engineering In ike winter, ike/roren ground Ii ns hard at rock. wiih lemfirraluret dipping lo mtnui SO derm Cemtgeesdr In summer, ihr
ground lhawi Htrrrnlirplh af at murkr
S meters. Beneath ihli ikawad laper. ike ground remnlnt froim ondrainage Is restrictedesult, the upperuagmlre. Rollnd roadbeds settle unrrenlp Into Ihe ihowrd ground layer. This process Is reversed In winter when ike lopsoil layer freetes. swells, and tends la eyres Has and track, tin If extreme tart Is taken In coruiruellon by using aaatoprlaie materials, repair of ike damage to the roadbed and to track alignment requires slsable annual expenditures. Moreover, permafrost eauset Immense logisticfor project planners in arranging delivery of construction materials to building illes along ihe track
Given lhc irrvesimeni. labor, and technical problems io be over cook, the opdmiwk target dale fo*tbe Berkafcii-Tornrr-ot (eerie* of (be AYaM will probably not be met. and construction of tbe final lection to Yakuuk win fall behind correspondingly. Soviet press 'cporu indicaic four bridf.es have been built across ihe Chulman River, aod only aboutilometers of the railbed is compterely prepared for iracklaying. The "major transport project" ofon olaa. thus, will probably extend well Into.
In constructing the AYaM. ai least to this point, the Sovieu have relied largely on domestic inputs of machinery, but tbe piojcex Vs ai such an early sUge that contracts wiih Western firms could stillontribution. Judging from similar construction needs on the DAM and machinery shortages for the AYaM cited In the Soviet press. Ibe SovieU may seekheavy machinery (bulhloicrs, tractors,and cranes, fot eiamnlel from Japan and ihe
Unitedise in sentiments in favor of cutting future invesiment by canceling further construction is also possible, however, particularlyinsistence that profitability become tbefor Soviet ilcvd.upmcoLprojecu. Tbe Sovieu estimate the cost of constructing the SJO-krn AYaM atillion rabies,igh-ranking Yakutsk nlii.ri.il claimed would be amortised wiihin three to four wars once the railroad becomes fully operational
la the interim, ihe SovieU will rely heavily on the little BAM and could attempt to secure funds to begin constructionecond track to cope with heavy freight volumes. Uncompleted sections of ihe BAM will continue to cat uproy bank funds and compete wilh the AYaM for financing. Although Moscow recently Injected some "new blood" Into lu banking system, meaningful reform of capital allocation is still years away and does not necessarily translatereater share of funding for transportoreover, we expect little additional foreign investment ia tbe region over lhc neat few years to help finance development. Moscow may end up settling for the achievement of secondary objectives in lhc shortas Increasedof cokingwill baveait uatil well0 to witness anyevelopment of tbe area's other mineral resources
Mcdeswlxatioa of tbe Ivanovo Machine Tool Plant
What some places are still striving for and sllll approaching was achieved fatong ilme ago.
Pravda stank rosy
Tbe Ivanovo machine tool plantare cample of achievementoorly performing industrial sector. Preferential support fromd the effortsocal manager determined to change the plant from what wasepair
fadlityate-of-tbc-arttc buiMing enter-piihadelant recogoired far advancer! machine loob ia the USSR and lUotdlike Ctnnl five-year plan. Moscow wantspgrade Ivanovo's opciiltooi by rceouipping tnajce aim of (the plant lo enable ccaUiatwd production of advanced machine looli and to doable production of machining center,0 /
locatedilometers nortlicatl of Moscow. Ivanovo'aproduction facilities beganm ihe. Ind in thehe Ant numerically control led (NQ machining centers were built Currently,ain products arecent en of various ii tea (tee figure
^ ihe piaoi producedmachining CtWTCM*
at ofhe team wai uting tOO numericallythine looli in ill own manufaciuring opera lion-
Plant for upgrading the Ivanovo plant predatet accession to power but have received new emphasis aad priority with Ihc recent effort to bring Soviet ind initial automat too up to international aian-dards (seebe plans derive from htcscow. inlcnlion to make products from the piant genuinely competitive on world markets. In addition, tbe Soviets capect to improve Ihc efficiency of the country's machinery base by producing pans trad equipment of higher quality lhan is possible with traditionalprocesses. The focus of effortsn developing and bail ding new, more productive machine tools rather than on simply modemiring previous models. Moscow recognises the need to develop better machine tools and views Ivanovo as one of the country's leading enterprises in bringingtechnologyine qnkkly. For these reasons, Ivanovo benefits from "preferential treatment" in terms of resource allocation
The bean of Ihe effort althe reason' Moscow has placed such high hopes in workthe development of advanced fkiltsk manufacturing systemsn ibe near terra. Ivanovo managers aim to build completely new machining centers rather than limply upgrade older models. To operate the machining centers, the plant is building computcr-numeetcal-control (CNC)nd plans call forercent of Ivanovo'i machine tool outpute CNCuch an increase would represent morepcrccnt jump In tbe share of CNC machine tools produced at the planteriod of only three years. By the end of tbe current five-year plan. Ivanovo plantange of machine tools using lasers for cutting to its clients abroad and further increase ihe automation of its machining enters to improve their adaptability lo FMS j
S meati an illy nftrt to adnata of
fnicblfkther aaclalawUoc wacbina aneac boanpenaarf ceaarwicr raid losrwlj of porta.1 of 'MS ioctnet Ik* atalliiuaataaa eontincaalt<j. eliminate fcawan error, aad rtdoce labor Ottu. FMS altoi moonse la thlltt Inuiiooki dcinanff^
Improving Factory Automation ana". --
To meet ihe chnngtog requirementsrchnologi-cally compiriihe Sovieu nrr seeking to Improve their machine loots by odding morr Uate-of-tht-art cornyonrali lack ascontrollm. programing devices, and diamond and limited ear-bide culling loots. The driveodernize andfactory automation, however, has met wilh povrerful resilience because It lendslirupisysiems of planning and production. Theof Soviei electronics and computermanagerial restrictions,olicy of concern rat tag resources on mast pradueilon has left the USSR behindastrlaliitd West bp as muck asears In some areas af manufacturing trcknol-ogy.tZKS*,'
To reverse this trend. Moscow hasrogram for Incorporating advanced technologies into Itsproduclion system. Including machine tools, bp:
Increasing the level of Investment In ihe civilian machine-building and metalworkingercent overevel.
ew quality control system on tnttr-prists In tke machine-building Induiiry.
ort ItrxIbU forrign trade policy lhat allowi enltrpriits to form direct business rrtatlon-
Sklpt wtth forrign firms.
ihe volume af metal pans produced fourfold to fivefold by shifting from manual ma-chlnrs to menputer-numerical-control machine
Yesterdays Upstarts. Today* Heroes The Ivanovo plant is one of oolyhandful of manu-faciunm In lhc USSR lhai managed lo produce slate-of-the-art machining enters in thehis achievement dad not come easily, however, ai Ihe history of the ptaat attests. Ircoically. anay of the events thatoot :he changes ihi< receive so much praise today were the result of unusualinitiatives lhai broke with traditional Sovietcoupled with unusual support in terms of re-source allocation priority. Since Vladimir Kabaidre
became general director of the Ivanovo Machine Tool Assocsaiione bas sought io producerraehaac loots and develop Aciibtcring systems despite bareaaeralk snags andfrom aaiasttiy cOvesab thai sorrietimes resultedloss of laeomc aad iraaaaa so hn emc-orea (sec rnsetl Indeed, do ring the period1be plantillion rabies la rocemrvr fur-It. and members of its engineering and technical staffuble* each in bonus money. The plant never had its plan for moving Into series production of NC machine look formally approved by lhc MiaLstry of ihe Machine Tool aad Tool Building Industry, for eiample, and the enormous cosls for electricaland service forced Ivanovo maesgement lo rmderfund housing, vacations, and other employee benefits, which caused an nodus ofercent of Its staff its the.
Kaba adze's persttteuce, however, led Moscow tothe advantages of has vision for Ihe plant, aod since1 Ivanovo has benefited fromresource allocation aad support from Moscow. Today Ivanovo's swooeuv doping aad producing machining centers aid advancing its capability inailed in ihe Soviet press as an ciiraplc of local imitative and how the Soviet michine-budding indusuy ohotild operateIhe aew coodilions of restructuring (seen7 Isvestlya article praised Ivanovo for being one of Ihe few enterprises with quality standards high enoufh for its prod nets to be compcilUve in world markets. T
reulpmeot aad lectnaologi Mtotdrcrrteafi
Curreatly. five different NC systems are employed in the machining centers al Ivanovo. Tbese sysiems include eouipment and lech oology provided by Japan. West Germany. aad Italy, aaas coc of ScanJet manufacture Two macbimngia the United States operate aloaagiadcarge East Germsn-huilt machines Nearly alt Ibe controls sssed oa Ivarsovo't own cqaipmcoi were purchased from Japan's Fanoc. which the ptant'i managementsuperior to other foreign aourees ot control equipment. The heavy reliance on foreign capenise a
Whyon Mort Uke IranoroT
Ncwtpoprrt frequently feoiure ortlclci praisingfor Its commitment to manufacturetools and attacking other planttaccomplish what Ivanovo has. Plant directorKabaldze's frankness In defrndlng hison producing "only the best" has played wellpress
luravdaeature titled, Second Echelon: Why Don't Enterprises In Ivanovo Use the Methods af Local Machine Tool Builders':
why don'temarkcollective of fighters and innovator*.
might add that it hai subjected Itself to tevcicIsn't it time wcng the methods of the Ivanovo machine tool builder* ?
When local plant managers scoffed at the suggestion they emulate Ivanovo, claiming ll has received more resources than other plants, Kabaldze replied that Ivanovo's special treatment Is well earned: "One has toight v. we considerustomer and thai Includes servicing as well.weiryto make providing service lo theop priori' V"
The special treatment lhal Ivanovo enjoys hasresentment among directors of other machine-building enterprises, particularly In the area around Ivanovo. Generally, most plant managers claimcannot realUtleally expect the work at Ivanovo io be duplicated at other planis because the country lacks the resources and bureaucratic commitment to provide materials and personnel to moreandful of showcase plants. Pravda asked directors of other machine tool factories In ihe area why they had not copied the success at Ivanovo. The generalofplant across the street from"Thereifference between them and us. They ore given, we are nol. They get Imported components. On the whole. Ivanovo Itvet undercoeiditlonsf
clear, but unlike many sector* of Soviet industry, Ivanovo's development of FMS has depended on more lhan imports of Western equipment: llelatively impressive record cf success al Integrating Wesiera technology with its own-
To realize its ambitious goalsuild centers and to increase ihe number of numerically controlled machine tools in usevanovo manager* will continue to pursue purchases from tbe West under revised Soviei trade rules designed to facilitate technology and equipment acquisition. The ability to arrange purchases directly with foreign firmsto Minister of the Machine Tool and Torsi-Building Industry Nikolayenable ihc plant to be more responsive to technology needs and reduceo lades to timely parcbases. Panichev has indicated thatot interested la acquiring more Western machine loots, bul Instead wants know-how lhal will permit the Soviets to better Integrate disparate machine tools into one system.
buyers from Ivanovo
submitted formal requests for price qisolations In7S firm for ma terials-ba ndling equipmentontrol system to link mechanical design and postprocessing equipment to FMS. Ka-baidie is said toTow-level agreement" so that politics win not interfere wiih the arrangement. Nevertheless, much of ihe addilional equiprnentat Ivanovo such as computers, software, CNC units, and compatible machine loob remain controlled by COCOM.
Western technical specialists visiting Ivanovo have reported lhal Ivanovo is also facing shortages of foods for purchasing foreignlowdown in exports to hard currency countries from Ivanovo left ihe plant "cash
that the plant had' insufficient funds io purchase software for the control, systemesible manufacturing system
In the pait, production of machine looli it Ivanovo wai primarily gearedho Soviei market and other Communist countries; according toercent of the plant's output currently stays Ln tbe USSR. Under Gorbachevs new plans, however, increased production of CNC tools it designed to stimulate sales to bard currency countries,!^ j
" la. the Soviet macnine too! ministry hat tccKiied ihe aid of an Italian machine tool maotdacturing association to advise the USSR on capon promotion strategics and Quality control
maintain adequate kvets of appiopi lately skilledand product ion/mode mi ra tioa plans that bearrelation tort liable itsxrercet and capabilities of* ibe eaiswprtscs or sectors thai musi fulfill them. All of these protaorns arc masufesutiraas of aa overtysystem of coaenslack of raceotfres for personal commiiaxwi u> the job. Moreover, tbese prcbtctns arc comr^nded by the ersrtaplcs ioterdepeo-dcocics among the various induitrial sectors aad the resultant ripple effect of shortcomings ia one sector on maoy others.
lies Ahead 7
To maintain Its reputation and keep np withstandards. Ivanovo will need to accelerate Us production of fteiible rnanufactariag systems and will probably need to continue to rely heavily on foreign expertise. Western industrial automation specialists who bave traveled to tbe Ivanovo plant and met with officials there observed that the Soviets did not appear to understand some critical concepts In developing FMS such as the importance of not cutting corners oo system engineering design work aod specializeddevelopment. They further noted tb saving measures implemented at the plant In to cash shortages would reduce the efficiency of the FMS. Such obscn ations suggest that in spite of Ivanovo's preen jnence antong machine tool builders in the USSR, tlie plant is not ccrnplelely Immune from the mefficicodes and addiction to traditional practices that plague much or Sovtet industry.because many machine too! plants arc currently upgrading their production equipmeni and resources are being divided among them, Ivanovo will suffer from pressure to produce more and moreime when the plant itself is nnder'gcnrig substantial
Oatleok: Moving Ahead la Fits and Starts
Several common problems run through these caseoo little investment chasing too many tasks, insufficient infrastructure and social amenities to
Wiih the Introduction over tbe neat several yearshe economic reforms adopted al the JaneCommiiiectheof economic planning nod the introductionthe redirection ofGorbachev hopes to eliminate maoy ofassociated with rncdcrnlzatlon. Thesehowever, will not sol re maoy of (beii iheaiebecause tSey
do not go far enough in promoting enterpriseaadid ml initiative. For craa-pit. the reforms do nothing IO ease tbe pressure IOuantitative largels. Moreover, la tbe short term, we will probably see diiraption! In accustomed paltcras of doingceasing confusion and apprehension antongwho develop and administer the often con-tiictiBg Plans and workers and managers who must carry them ouL In several of tbe eases we examined,eing carried oat hastily to avoid production ihortlalh. Daragctotis safetyquality const ruction wort, and little regard for ibe long-term health of the enterprise frequently resulu Thee lpe'KfKe Implies thatuadet "grccahoute conditions" occtsri onlyainful period of adimieneot. Appfyirsg some of the lessons from Ivanovoroader scale, wc believe lhat on Ihe national level economic oowditiooi are likely to worsen before they improve. Tab case also(Im prefereniUI treatment by Moscow may be required lo overcome bureaucraticand managerial risk taking
Out case Studies suggest thai ibc likelihood Toe suc-cessfnl ovocJermralion of So*>et industry will depend oa Moscowl ability loiu policies ia several areai:
wiP need lo slop pnanhing enterprises for Ibe ineriuble production disruptions aad ihonfalls thai occur daring reconstruction. To aceoenplish ihis, outpui plans will have to be cut back lo give erHcepetsot Ibe "breathing space" necessary toproduction processes snd manufacture higher quality goods.
ability lo command higher qualityand eqaipment from suppliers will depend oa Ihe ttacrestsfulneastralJy sdminrs-tercd supply syslemar* system of wholesale trade, scheduled for cocnptriioa
must focus on funding projects thatconsumer welfare and personal commitment. This la paniculiriy necessary if Moscow ts inlabor relocation to more remote regions of the country where Ibc dearth of bousing andgoodi and services Is discern raging skilled workers from permanent resettlement.
must be allowurl to fail and new bosi-Eesses lo starl, as ptuvsded fee In the new Law on Slate Enterprises. Serrirt industry win be hard pressed to improve overall performance if the ttaic coatiuact to protect ntcrpriscs from genuineforces.
price reform--acrseduled to begin inallow limbic prices that respond to supply and demand. Without genuine price reform, Ihe self-financing program will remainalf measure.
Plant managers aod induitry leaders have been able to identify many of tbe key problems facingprojects, bul solutions ire often difficult to implement because of hauled irnraltnenl ted Is bor resources. Moreover, ibe gap between the promises of to improved and relilively independent workplace and tbe reality of centisi control over rnotl resources
and decisions is still apparent io worken andat ihe enterpriseestern observerthe situation tl Magnitogonk noted, .'or. they know the problem* perfectly well, have many capable and knowledgeable people dealing with ihem, and yet it seems, even to, getting them solved is ta extremely slow processReasonsrssction proiects tain need to show positive results quickly forprogram lo gather ihemomentum and sapport lo justify sastainiag his overall rmdern-iatieas plan for Seme, industry.
In addition to these internal challenges. Moscow -ill also be "coking outward for help rcvitaliring ibe industrial base. Tbc purchase of foreign equipment and ctpertise Isanacea fw modernization becaate of traditional dlrlkculllet assimilating West-era technology and equipmeni, bul the Soviets will aggressively pursue trade oonlacts wilh the West for certain critical projects. For those projects thai must rely largely oa dcencaticthe maehjae-botidingbelieve Moscow wdl so eel era te its campaign to censure plants thai fail to meet contract delivery schedules and hamper rccoa-struction efforts. The Gcwcnl Secretary'i edrnonitb-nseai of Urilmaih for failing to provide eouipmcatimely manner for Magnitogorsk's reconstruction efforti typifies what we aspect to see from the reform-minded Kremlin leadership In lerms of reproaching poor performers. In traditional Soviet fashion, notable itsccesses will be accredited lo "thehile failures will be blamed onanagers,and party bureaucrats
conomic program will probably eject changes ever Ibe neat fewwelcome andthe pace of the indmdoal projects we
- At the Magnitogorsk iteel plinusbcetagesof equip-meni for reconstruct ion arc likely io continue as suppliers scramble lo meet contracts Irom otber plants competing for limited resources. Oncenean complclinn. Magnitogorsk iSould be able to lorn oui somewhat higher quality products.
of the Astrakhan' got-condensate complex could be hastened if Moscow allows Ihe project planner* to Improve (he timeliness of imports of Western equipmeni by continuing lo loosen re-Slriclionl on foreign irade.
- ol the Amur-Yakutsk railroadwill be bun by competition for funds from DAManicularly if pre*wire lo complete lhat line malriplics every year ihe BAM operates briow capacity. If Gorbachev coniinaesruisi lhai proaiabilliy I, irnroe ihe byword for development projects, coriitfiicilon of the AYaM could be post-pooedacb laier date if not canceled
The Ivanovo Machine Tool Plaai will probably cominoe to en/jy aa eicelknt reputaiion andita eiport rarrwjwxioa firategiein more bard cwrTcncy earnings aa long aa it cor-tir.ee*eceive preferential support from Moscow. Butmay find it difficult lo barter proKCU ia the social sphere under ihe guidelines designed to irartv-fcr more responsibility for Improving lhc localto individual enterprises.
hole, Moscow'! plans lo upgrade its indasirial base through rebuilding aad retooling production line* are fraught wiih Intlitutional conflicts between bu-reaucrali and reformers, wllh Iha former itandlng to lose their positions If Soviet faetariei ever do startem selves" more effectively as Gorbachev would like. Some mlabter ial officials have already been forced oui of joba and more severe personnel cuts are planned over the neai few years. Meanwhile, ai
the enterprise level, factory managers are faced with what may be, al kail la the short lerm. aa Impassible task: assimilaling reforms such as scl'-financing and wholesale trade white attcsraptiiig to improve quality aad maintain output at planned kvehs.
Becaasr the soccers of Oostacaev's oacderairatica effort depends,arga trioacelter motivated work force. Moscow will need io make good oa pledges to provide decent bousing aad other social services, as well as improve availability of quality consumer goods, to obtain boiler retails. Up to thb point, workers have been Instructed to work harder and faster but have yet to realize any meaningful reward for their sacrifices. Some productivity and Qualitative gains from Moscow's program to upgrade the industrial base undoubtedly will occur, butslated goal of overcoming tha backwardness of Soviet industry will not be realized In the time frame be wouldontinued gap between promises of aa unproved and relatively Independent workplace and tha res lily of centra) control over most resources and economic dccisioni weald prolong the turmoil of ibe adjustment period aad, lacases, thwart rnoderrtirjlion tliogethcr Ussiest Moscow frees it/ iMastrie* from lhc urjibdicali of ministerial oversight and odmiatttertdeak industrialtogether with Impotent work incentive* will almost certainly Isold anode rni ration of Sovieito those projects on which Meacow can lavish preferential supportOriginal document.