In his annual address to parliament, Putin mentioned in passing that the world’s most powerful nuclear-powered icebreaker was being built in the Far East. In passing because neither the timing of the project’s completion, nor even the possibility of its completion in the foreseeable future is clear at this point.

A symbol of Russia’s dominance in the Arctic

This story dates back to the mid-2010s, when, as part of the Kremlin’s geostrategic project to develop the Arctic and Northern Sea Route (NSR), it was decided to build a new icebreaker fleet for trade and military purposes. By 2018, construction was already underway on the world’s two largest nuclear-powered icebreakers, called Project 22220, while Project 10510 icebreakers, nicknamed Leader and planned to be twice as powerful, were in development. The conglomerate of companies belonging to Yuri Kovalchuk-Vladimir Kiriyenko-Rosatom was behind the effort. Note that Rosatom has been the operator of Northern Sea Route infrastructure since 2018.

The emergence, under the direct control of Putin, of such diversified conglomerates, similar to the South Korean chaebols, began with the transition to the Medvedev-Putin tandem in 2008, and this process has intensified recently. These chaebols concentrate power and property and, regardless of political turbulence, guarantee control over the most important spheres of economic activity and the country as a whole. Besides Rosatom, there are Gazprom, Rosneft and Rosneftegaz, Rossiya Bank, VTB, Rostec and the Kurchatov Institute.

The chaebols are headed by close associates of Putin: Alexei Miller, Sergei Chemezov, Igor Sechin, Yuri and Mikhail Kovalchuk, etc. They perform various “noncore” economic and political functions on a permanent basis and also on one-off assignments.

Contrary to economic logic and previously discussed plans, the order for the first of three planned 10510 icebreakers, to be christened Russia, called for construction to be done not by United Shipbuilding Corporation at the Baltic Shipyard, where two icebreakers of the 22220 series were already being built, but at the Zvezda Shipbuilding Complex in Bolshoy Kamen, near Vladivostok. Zvezda, part of Sechin’s chaebol Rosneft (with Zvezda stakes also held by Rosneftegaz and Gazprombank), was just being established at that time. Putin set 2025 as the deadline for the wonder vessel Russia to be completed. The initially indicated cost of the project – RUB 77 billion – has now tripled and continues to grow.

On January 15, 2020, the government of Dmitri Medvedev, already on its way out, adopted a resolution on the construction of the lead icebreaker of the Leader project. The state contract, worth RUB 127.6 billion (about $2 billion), was signed in April 2020 with Zvezda. By the time it was to be delivered in 2027, the other 10510 vessels were supposed to have begun being built. These icebreakers were said to hold the key to the future of the Northern Sea Route and the Arctic as a whole.

The shipyard being built by Sechin

Zvezda, launched in 2016, not only had no experience in building such large and complex ships, but also, as it turned out, did not have the necessary production capacity. A Chinese corporation was brought in to urgently construct the second stage of the shipyard with the largest dry dock in Russia, which is needed to build the icebreaker.

When the dock was built, Rosneft decided that a new metallurgical plant should be built to supply the shipyard with steel sheets – for about another $2.2 billion. The Ministry of Industry and Trade did not see the point, and metallurgical companies objected to it, considering the project economically inefficient and redundant. Sechin, however, pushed through the plant, to be constructed by the Chinese, having received Putin’s personal approval. The already-launched construction is planned to be completed by 2030, like all the many ambitious plans that Putin announced in his annual address. The plant will also require additional power facilities.

Finally, there is another problem that experts talk about a lot, and which Sechin and Putin seem to underestimate – the shortage of qualified personnel to simultaneously build unique icebreakers in the Baltic, where that is already underway, and in the Far East. In peacetime, one could hope to lure workers from Ukraine or even South Korea. But alas.

To build the Leader super-icebreakers, at the beginning of 2022 Rosneft wrestled control over the Iceberg Central Design Bureau from the Ministry of Industry and Trade. This was formalized in a special presidential decree as the privatization of Iceberg, a global leader in building icebreakers that designed every nuclear-powered ship ever built and planned for construction.

Future prospects

When the war began, the Russian army bombed the Energomashspetsstal plant in Ukraine’s Kramatorsk, which in 2022 was supposed to produce ice teeth, rudder elements and propellers for Zvezda. Meanwhile, it takes two to three years to produce all this in Russia.

Yet there is another problem: imports. For nuclear-powered icebreakers, the share of imported equipment is 15-20% in money terms, and in this case it is not standard parts but special mechanisms that were supposed to be ordered in the West and South Korea. Now, Iceberg is redesigning the Leader icebreaker, replacing the imported radar and navigation equipment.

As Atomflot General Director Leonid Irlitsa said at The Arctic: Present and Future forum, the Russia icebreaker was 11.14% completed as of December 2023. The slow pace was attributed to difficulties with casting large parts of the hull and assembling components for the nuclear power plant, even though these elements should not depend on imported equipment at all. In other words – basic internal problems are at fault.

In the future, the delay is only set to widen, including for reasons beyond Rosneft’s control. For example, according to Kommersant, the price tag could rise by another RUB 70 billion to almost RUB 200 billion, while financing for the construction of the Leader icebreaker, based on the budget for 2024-26, could decrease by RUB 5 billion in three years. Thus, the timing of its launch could be pushed back to the end of 2029.
The government has already had to abandon the ambitious plan to build three super-icebreakers, with the latest edition of Russia’s Arctic Strategy, released in February 2023, penciling in only one icebreaker of the Leader series (Russia.Postwrote about it here) – not enough for year-round operation of the Northern Sea Route.

Conclusion

The story of the super-icebreaker Russia allows us to draw several conclusions.
The example of Sechin’s Rosneft shows the extreme inefficiency of the Putin-built governing system, in which giant diversified chaebols bypass the government and report directly to the president. And corruption is not the only issue here. The incentive for the chaebols is to draw out the process and increase funding from the budget, not to achieve results. The chaebol heads, clawing for sovereignty in the Putin sense – i.e., independence from other players, self-sufficiency and absolute power in their allotted sphere – seek expansion and a monopoly position.

At all stages of the story with the super-icebreaker, we see Putin’s active personal participation. To the point that Zvezda notified President Putin about problems with the supply of components in February 2023, with the issue then “sent to the government for consideration.”

By running things “manually” and issuing one decree after another, Putin is not just clearing obstacles for Sechin; indeed, the president is trying to realize an important geopolitical, military-strategic and symbolic project for himself, but it is not going very well. Sechin appears to be much more effective at achieving his goals than Putin.
Returning to the Russia icebreaker, we can say with certainty that it will not be built by the initial deadline of 2025, or by the current target of 2027 or even by 2030. It will likely join the ranks of “historical achievements” like the Tsar Cannon, which was never shot in a war, and the Tsar Bell, which has never rung.

We see a whole chain of decisions that look ineffective at first glance: to build an icebreaker in the Far East, not in the Baltic, where everything for that is already ready; to build a metallurgical plant in the Far East, with a planned capacity of 1.5 million tons of steel per year, of which only a quarter is needed by Zvezda; to concentrate everything, from design to metal production and ship construction, under Rosneft. Yet there are unadvertised military-strategic considerations: diversifying production and shifting production capacity from Russia’s western border to the east to protect it in the event of a large-scale war with NATO.

According to the general director of the Rosatom subsidiary FSUE Atomflot, Vyacheslav Ruksha, “Leader in our ideology is an icebreaker primarily for direct access to the markets of Asian-Pacific countries... So, in reality, Leader is a question of Russia’s place in the liquefied gas market.”

In addition, the super-icebreaker has space for weapons.