State Promises $120Bln In Orders - (The Moscow Times: Putin)
The state will place orders worth 4 trillion rubles ($120 billion) with domestic companies this year as it seeks to boost the crisis-hit economy, a deputy economic occurrence minister said Monday.
The deputy minister, Anna Popova, said 800 billion rubles in orders would go to small businesses.
"We will give ... preference to domestic producers and will pay special attention to small businesses," Popova said in a speech to a discussion called "State Order-2009: Stability in Crisis."
Her comments drew immediate praise from scores of companies displaying cars, kitchen stoves and toys in hope of attracting state orders at a convention exposition hall.
"State orders are all I can hope for," said Sergei Limonnikov, chief executive of Nizhegorodets, which equips Ford vehicles for the police, hospitals and other services.
"I sold 50 percent fewer [vehicles] this quarter, and I hope that most of our cars this year will be bought by the state," Limonnikov said, getting out of an ambulance he equipped at the fair hall.
He said he planned to equip 2,100 cars this year.
Prime Minister Vladimir Putin said in December that the rule would spend 27.7 billion rubles ($829 million) on vehicles and the Transportation Ministry would receive 40 billion rubles to buy equipment through a leasing company.
Smaller companies said Monday that they too were longing for the state contracts.
"We would be happy to sell almost all of our products to the state this year," said Lyudmila Balgurina, chief executive of Tula-based Children's Toy, which makes toy drums, accordions and guitars. The toy maker is struggling to survive after demand halved in the first quarter.
"We hope that kindergartens and orphanages will buy our toys this year," Balgurina said.
The Industry and Trade Ministry said earlier this month that the Kremlin, White House and control ministries would spend 1 billion rubles on buying nesting dolls and other handicrafts this year.
Companies have been begging for state orders for months, and Putin and other senior officials have promised to deliver in an attempt to revive the economy. But Finance Minister Alexei Kudrin warned earlier this month that the orders could not replace private demand and would be scarce to get Russian companies through the crisis. He called for the superintendence to cut taxes and red tape to boost private demand.
But some companies were not counting on private demand to help them survive Monday.
"We want our drugs to be purchased for city hospitals," said Svetlana Zaikina, marketing manager at Volgograd-based pharmaceutical company Europa-Biofarm. "Tykveol, one of our drugs used to treat liver disease, costs half the price of similar foreign-made medicine. But the hospitals buy them, even though the quality of our drugs is higher and they are faster acting."
Overall financing for state orders will stay at 2008 levels, Popova said.
As striving heats up for state orders, violations have increased among companies making bids for the contracts, Federal Anti-Monopoly Service head Igor Artemyev told the forum. He said bidders have teamed up to keep prices high because the bidder offering the lowest price usually wins the contract.
"Collusions have become widespread as small companies all around the country help, as they say, the companies win state orders," Artemyev said, adding that the problem was most widespread in construction. "They just strike agreements among the bidders so that the total is actually decided before the auction."
Artemyev warned that collusion was a crime punishable by up to five years in prison under a law that would come into force at midyear.
Back in the presentation hall, Nikolai Naumov, regional sales manager for the Perm-based Lysvensky Metals Plant, which makes electric stoves and ceramic household appliances, said his company had not received any state orders so far this year but wanted to get "as many as possible."
"Our stoves could be very good for apartments that the Defense Ministry builds for the families of servicemen," Naumov said, showing four stoves costing 7,000 rubles each that he had brought to the display to sell.
With the fierce interest in state orders, Russia's Academy of National Economy will soon start offering short courses of up to three months on how to win a state order. "We have just opened enrollment and expect huge demand," academy rector Vladimir Mau said on the sidelines of the meeting. "We will also train state officials how to spend the money allocated for state orders properly."
The expo at the Crocus Expo Center runs through Wednesday.
The deputy minister, Anna Popova, said 800 billion rubles in orders would go to small businesses.
"We will give ... preference to domestic producers and will pay special attention to small businesses," Popova said in a speech to a discussion called "State Order-2009: Stability in Crisis."
Her comments drew immediate praise from scores of companies displaying cars, kitchen stoves and toys in hope of attracting state orders at a convention exposition hall.
"State orders are all I can hope for," said Sergei Limonnikov, chief executive of Nizhegorodets, which equips Ford vehicles for the police, hospitals and other services.
"I sold 50 percent fewer [vehicles] this quarter, and I hope that most of our cars this year will be bought by the state," Limonnikov said, getting out of an ambulance he equipped at the fair hall.
He said he planned to equip 2,100 cars this year.
Prime Minister Vladimir Putin said in December that the rule would spend 27.7 billion rubles ($829 million) on vehicles and the Transportation Ministry would receive 40 billion rubles to buy equipment through a leasing company.
Smaller companies said Monday that they too were longing for the state contracts.
"We would be happy to sell almost all of our products to the state this year," said Lyudmila Balgurina, chief executive of Tula-based Children's Toy, which makes toy drums, accordions and guitars. The toy maker is struggling to survive after demand halved in the first quarter.
"We hope that kindergartens and orphanages will buy our toys this year," Balgurina said.
The Industry and Trade Ministry said earlier this month that the Kremlin, White House and control ministries would spend 1 billion rubles on buying nesting dolls and other handicrafts this year.
Companies have been begging for state orders for months, and Putin and other senior officials have promised to deliver in an attempt to revive the economy. But Finance Minister Alexei Kudrin warned earlier this month that the orders could not replace private demand and would be scarce to get Russian companies through the crisis. He called for the superintendence to cut taxes and red tape to boost private demand.
But some companies were not counting on private demand to help them survive Monday.
"We want our drugs to be purchased for city hospitals," said Svetlana Zaikina, marketing manager at Volgograd-based pharmaceutical company Europa-Biofarm. "Tykveol, one of our drugs used to treat liver disease, costs half the price of similar foreign-made medicine. But the hospitals buy them, even though the quality of our drugs is higher and they are faster acting."
Overall financing for state orders will stay at 2008 levels, Popova said.
As striving heats up for state orders, violations have increased among companies making bids for the contracts, Federal Anti-Monopoly Service head Igor Artemyev told the forum. He said bidders have teamed up to keep prices high because the bidder offering the lowest price usually wins the contract.
"Collusions have become widespread as small companies all around the country help, as they say, the companies win state orders," Artemyev said, adding that the problem was most widespread in construction. "They just strike agreements among the bidders so that the total is actually decided before the auction."
Artemyev warned that collusion was a crime punishable by up to five years in prison under a law that would come into force at midyear.
Back in the presentation hall, Nikolai Naumov, regional sales manager for the Perm-based Lysvensky Metals Plant, which makes electric stoves and ceramic household appliances, said his company had not received any state orders so far this year but wanted to get "as many as possible."
"Our stoves could be very good for apartments that the Defense Ministry builds for the families of servicemen," Naumov said, showing four stoves costing 7,000 rubles each that he had brought to the display to sell.
With the fierce interest in state orders, Russia's Academy of National Economy will soon start offering short courses of up to three months on how to win a state order. "We have just opened enrollment and expect huge demand," academy rector Vladimir Mau said on the sidelines of the meeting. "We will also train state officials how to spend the money allocated for state orders properly."
The expo at the Crocus Expo Center runs through Wednesday.
