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Russia’s troubled new spaceport

Link here. The article provides a nice summary of the many problems I have posted here on Behind the Black over the past three years, describing the corruption, cost overruns, and delays that have dominated the construction of Russia’s Vostochny spaceport.

I think this excerpt encapsulates the project’s basic problem:

Andrei Ionin of the Russian Academy of Cosmonautics, who helped draw up the original plans for Vostochny, said the idea was for the facility to boost the economy of the depressed Far East region. “It should have become an innovation cluster … with a smart city to attract bright young specialists,” Ionin said. Instead, the accompanying “innovation hub” was built near Moscow, and according to Oberg, only a skeleton crew is posted to Svobodny, the town that serves the spaceport.

“The original idea was botched,” Ionin said. He added that the project now has “no meaning” and is “like a fifth wheel in the Russian space program.”

The goal was not to improve efficiency or save costs, but to fulfill the idealistic hopes of a central planner whose plans were essentially very much divorced from reality. Meanwhile, the corruption that permeates all of Russian’s big industries honed in on this project as a great way to skim off a lot of cash for their personal bank accounts.

According to an expose by RBC published in July 2015, the original cost of the facility was supposed to be just $1.9 billion in today’s prices. Already, though, the cost of building the first of two launch pads has exceeded $2.4 billion, according data on dozens of state contracts compiled by RBC. Officials did not release an official budget for the spaceport before construction began in 2011.

Russian anti-graft activists allege that much of this overspend can be attributed to corruption. They say that, like many other Russian mega-projects, it has become a gravy train for well-connected embezzlers. “There are a lot of corruption violations,” said Lyubov Sobol, a lawyer at the grassroots non-governmental organization the Anti-Corruption Fund. Sobol, who published an exposé on cost overruns at Vostochny last year, added: “The construction is overpriced by billions of rubles.”

Russian prosecutors say that least $165 million was embezzled during the construction process and several contractors have been charged. “I doubt the full extent [of the embezzlement] has been publicized,” said veteran American journalist and historian James Oberg, an expert on the Russian space program.

It will be especially revealing to compare Vostochny’s cost and development time with the spaceport that SpaceX is privately building in Texas. Which do you think will cost less and be fully operational first? I think I know.

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Conscious Choice cover

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3 comments

  • Alex

    Mr. Zimmerman: There are also not only idealistic hopes of a central planner whose have to fulfilled by force in Russia. We know such phenomena quite well also in Western liberal countries, look at Germany with Merkel’s crazy energy politics disaster (so-called “renewable” energy). Or what happened in EU, quasi-socialist, procommunist dictatorial system.

  • Laurie

    Of course Bob is right. Take the merit out of the paycheck or the process and corruption spreads like an infection.

    Corruption is always lurking, but it proliferates when the virtues of taking pride in one’s work and raising the standard are subverted by the whims of bureaucracy and patronage.

  • wayne

    Laurie– well said!

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