HIGHLIGHTS

• Ukrainian defense hardware appears under UkrOboronProm logo at IDEF-2011 in Istanbul
• Government sets mechanism for developing annual state defense order
• Two Czech military attachés expelled from Ukraine, accused of espionage
• Ukraine’s defense cooperation with Visegrád Group to increase
• Agreement with Russia nears on movement of Black Sea Fleet forces & return of territory
• U.S. gives Ukraine’s Afghanistan contingent state-of-the-art counter-IED equipment
• Russian Defense Ministry to buy Ukrainian An-170 transport aircraft
• Zorya-Mashproekt announces tender for $55 mln credit line; deadline 3 June

DEFENSE INDUSTRY NEWS
Ukraine displayed its defense hardware under the UkrOboronProm logo for the first time at the 10th International Defense Industry Fair (IDEF-2011) in Istanbul, Turkey, on 10-13 May. The Ukrainian exhibition included samples of the Skif anti-tank guided missile and Adros optical-electronic suppression system, as well as models of the Oplot battle tank, the BTR-4 armored personnel carrier, and the MT-LB armored-truck.

Management of state property in Ukraine’s defense industrial sector will be under UkrOboronProm, the new state defense industry conglomerate, according to a draft law approved by the government and forwarded to parliament. The draft law would include all state-owned enterprises, property and ownership stakes in companies transferred to UkrOboronProm. The law would also set UkrOboronProm’s top management structure, to consist of a supervisory board as the highest management authority, a board of directors, and a director general.

Ukraine’s Cabinet of Ministers issued a decree on procedures and responsibilities for forming the State Defense Order. The Ministry of Economic Development and Trade was appointed coordinator, and, together with the Defense Ministry, will annually establish the basic parameters of the Order. No less than 60% of budget funds allocated for R&D in any given year are to be spent on development of priority weapons and equipment.

NATIONAL SECURITY & DEFENSE POLICY
Two Czech military attachés were expelled from Ukraine on 13 May. Ukraine’s Security Service publicly accused the two of espionage of military-technical and military-political secrets. The two Czech military diplomats reportedly recruited Ukrainian defense industry and military officials to provide classified information on international military and defense industrial cooperation programs, aircraft and tank R&D, military training, and the development of a number of systems, including the An-70 and An-178 aircraft, the Adros active protection system, and the Oplot tank. The Czech Republic has retaliated by expelling a Ukrainian military attaché.

INTERNATIONAL CONSULTATIONS AND AGREEMENTS
The Chief of Ukraine’s Armed Forces General Staff, Colonel General Pedchenko, participated in meetings of the NATO Military Committee at Chief of Defense (CHOD) level on 4-6 May in Brussels. In addition to a bilateral meeting with his NATO counterparts, the Ukrainian CHOD participated in meetings of nations contributing to Operation Unified Protector and ISAF.

The Director of NATO’s International Military Staff visited Ukraine on 12 May and met with Ukraine’s CHOD. General Pedchenko emphasized that the present format of NATO-Ukraine cooperation matches the strategic level of the bilateral partnership and creates conditions for the development of further joint military projects.

A meeting between Ukraine and Visegrád Group Defense Ministers (Czech Republic, Slovakia, Poland and Hungary) on 12 May signals a deepening of cooperation, according to a statement by Ukraine’s minister. In particular, Ukraine has or will soon:

• Participate in developing a Visegrád Group joint task force;
• Propose that Visegrád countries participate in military exercises held in Ukraine this year;
• Supply engines for the Polish Navy’s Tarantul-class missile corvettes;
• Propose that Visegrád Group Defence Ministers visit Antonov.

Azerbaijan’s President has stated that his country and Ukraine have good perspectives for cooperation in the defense technical and aerospace sectors. Negotiations are ongoing regarding the creation of joint enterprises and expanding trade in this sector.

A draft Ukrainian-Russian agreement that establishes a mechanism for coordinating the movement of Russia’s Black Sea Fleet forces on Ukrainian territory (other than while on their bases) has been agreed by Russia’s Prime Minister. In addition, consultations have reportedly begun to revise the extent of territory rented by the Black Sea Fleet. Reportedly, the fleet may lose its access to 5 land plots totaling 749 hectares in or near downtown Sevastopol.

OPERATIONS, EXERCISES, TRAINING, FORCE DEVELOPMENT
Ukraine has sent two experts to contribute to NATO’s training mission in Afghanistan. The two experts will provide advice in  flight engineer training and the use of aviation electronic equipment as part of a Lithuanian group of aviation advisors to the Afghanistan National Army in Kandahar. [Ukraine and Lithuania have an established track-record of cooperation in Afghanistan, based on Ukraine’s many years’ participation in the Lithuanian PRT. –Ed.]

Ukraine’s contingent in Afghanistan has received state-of-the-art anti-IED equipment from the United States. This includes the iRobot PackBot System for engineering intelligence, the EOD 9 Bomb Suit and Helmet for neutralization of IEDs, and remote counter-IED equipment installed on HMMWV armored vehicles.

Ukraine and Russia plan a joint missile live-fire exercise in the Black Sea this June or July.

AIRCRAFT
The division of labor for producing a Ukrainian-made helicopter is currently being developed by the government, stated Andriy Klyuyev, Minister of Economic Development and Trade. He noted that Ukraine already produces helicopter engines, hulls, and most types of components and assemblies, and so in 7-10 years the country should be able to produce its own helicopter. The Ukrainian Aviation Technology Research Institute will lead development of the new helicopter, with Motor Sich, the Vinnytsya Aviation Plant, the Sevastopol Aviation Plant, the Konotop AVIAKON Aircraft Repair Plant and SE Civil Aviation Plant 410 participating in this project.

Budget funding for the An-70 military transport aircraft project are expected to increase in the revised 2011 state budget currently under development.

The Chairman of the Board of Motor Sich, Mr. Vyacheslav Boguslayev, made a number of announcements on 12 May, stating that the company:

• Will continue the modernization of the D-18 aviation engine for An-124 Ruslan heavy transport aircraft. The “4th modification” D-18 engine will have a maximum thrust of 30 tons, which will extend the range of the An-124 from 6,000 to 11,000 km.
• Intends to improve the performance of its new ТV3-117VМА-СBМ1V helicopter engine to increase the time between overhauls to 6000 hours. [The ТV3-117VМА-СBМ1V is fifth-generation engine designed to support perspective modifications of Russian medium-lift helicopters Мі-17, Мі-24, Мі-28, Мі-8, Ка-32 and Ка-52. –Ed.]
• Develop an FADEC [Full Authority Digital Engine Control; -Ed.] full cycle electronic helicopter engine management system in cooperation with Russian partners. The system test is scheduled on 30 June. A similar system has been created for managing An-148 engines.
• Supply Russia’s Rostvertol helicopter manufacturing company with AI-450M engines for modernized Mi-2M helicopters. This engine can extend the helicopter’s service life by 20 years.

Russia’s Defense Ministry is reportedly planning to buy 7 light An-170 transport aircraft from Ukraine, as a result of Russia’s decision to not build a military transport modification of the domestically-produced Il-112 aircraft.

Ukraine’s Aviant plant (Kyiv) will supply hardware for producing modified Аn-124-300 heavy transport aircraft in Ulyanovsk (Russia). The Aviant plant produced the empennage for the first generation of Аn-124 Ruslan.

ARMOR
The Kharkiv Armor Repair Plant is in the last stage of implementing a two-year contract for the overhaul of 150 tank gas turbine engines for a foreign customer. Under the contract, the plant will also guidance systems and sights. The contract ends on 3 June.

SHIPBUILDING
The Chornomorskiy shipbuilding yard and the State Research Design Shipbuilding Centre (both in Mykolayiv) signed an agreement to cooperate in efforts to increase Ukraine’s competitiveness in the world’s shipbuilding market.

The Zorya-Mashproekt gas turbine research & production complex has announced a tender for a $55 mln credit line. Proposals are being accepted until 3 June 2011.

SATELLITES & LAUNCH VEHICLES
The Sea Launch project will resume launching satellites on 1 September, using the Yuzhmash-produced Zenit-3SL launch vehicle. Tests of the launch vehicle and the DM-SL accelerating unit are scheduled for mid-July.

US-based MacDonald, Dettwiler and Associates (MDA) has stated that the launch of the Lybid communications satellite is now scheduled for mid-2013, instead of 2012, as previously planned. MDA, together with Russia’s Reshetnev Information Satellite Systems are producing the satellite for Ukraine’s National Space Agency. Production had been halted for four months to take into account changes in the planned orbit and licensing of radio frequencies. The contract for the construction of the satellite was signed in December 2009.

RADARS & SENSORS
A Belarusian military delegation has visited the Adron Scientific and Production Enterprise (Kyiv). During the visit, Belarusian Defense Minister Yuriy Zhadobin held discussions with the company’s management and became acquainted with Adron’s latest developments in the field of infrared countermeasure equipment for helicopters.

The joint stock company Topaz has received a $9 mln credit from the Russian Sberbank. The credit was provided based on an open auction announced by the company in April 2011, and has been provided at an annual interest rate of 10.5%.