Russia's shipbuilding program for cargo vessels is hit by budget cuts and delays due to high interest rates and Western sanctions.
In Russia, the budget and delivery schedules have been revised in the state-supported program aimed at the construction of next-generation river and sea cargo ships.
Shipbuilding Program Narrowed: According to reports from Russia, significant restrictions have been imposed on the ambitious shipbuilding program aimed at constructing next-generation cargo vessels for river and sea transportation. The Moscow Times indicated that the reasons for this narrowing in the state-supported program include high interest rates, issues with import substitution, Western sanctions, and an increasing labor shortage.
Plan for 34 Vessels Revised: The contract signed in June 2023 foresaw the construction of 34 RSD 59 type dry cargo vessels as part of the modernization of Volga-Donmax voyages. Krasnoye Sormovo Shipyard had described this project as the largest series in the history of the United Shipbuilding Corporation (JSC United Shipbuilding Corporation). A significant portion of the financing for the construction was planned to be provided through a partnership between the government and the GTLK credit institution.
Budget Reduced, Costs Increased: According to the Russian media outlet Vedomosti, the number of vessels under the program was reduced to 18 by December 2025, and the budget was reorganized. With this revision, the government-provided funding was reduced by approximately 300 million dollars. However, it was reported that the cost per vessel increased from 16.4 million dollars to approximately 22 million dollars.
Sanctions and Import Issues: Western sanctions targeting the Russian shipbuilding industry severely restrict the import of equipment from Western sources. The Russian industry is attempting to develop domestic or alternative solutions to replace this equipment. However, this process is leading to delays in projects and increased costs.
Deliveries Delayed: The shipyard announced that it began work on new vessels in September 2024 after delivering five RSD 59 vessels from the previous series. Although it was stated that some hulls of the vessels were laid in November 2024, The Moscow Times reported that no vessels were delivered within 2024, and the project fell behind the planned schedule. Deliveries are said to have been extended until 2028.
Capacity Increase Goal on Hold: Krasnoye Sormovo Shipyard had announced its aim to make capacity-increasing investments in 2025 and to build up to 20 dry cargo vessels per year. However, budget cuts and structural issues have led to the postponement of these goals.
Features of RSD 59 Vessels: RSD 59 class vessels are designed for general and bulk cargo transportation and have a length of 141 meters. These vessels are planned to be used for transporting grain, coal, timber, scrap metal, metal products, and oversized cargo.
6 Billion Dollar Major Plan: On the other hand, the Russian government announced a comprehensive program to expand commercial shipbuilding in May 2025, committing to invest over 6 billion dollars in the sector. This plan is considered a strategic step to mitigate the effects of Western sanctions. However, the current cuts indicate that realizing these goals will be more challenging than expected.
Source: SeaNews Türkiye
