Kazakhstan aircraft assembly plant loses trust and gets sued

Kazakhstan's first aircraft plant Sunkar, that has produced nothing in nearly 3 years of its existence, has lost its Russian partner and technologies supplier MVEN. Besides, the plant has once again failed to live up to its promises, Tengrinews  reports.

After Sunkar failed to meet its October 1 deadline and release at least one airplane, Alexander Vaschenko, head of KazAviaSpektr company that owns the plant located in Karaganda city, still insisted that the plant was operating on schedule.

In July he said that the plant would produce its first Farmer-2 agricultural aircraft before October 1, 2014 and then increase the output to 36 aircrafts per year by September, 2015.

In the end of September he said: "October 1 was a tentative date of release of the first locally assembled aircraft. The aircraft will be ready a little later. But I can assure you that it will happen this autumn. If we can, we will assemble the aircraft in October."

This new delay came as no surprise to anyone, but if the plant releases an aircraft that can fly it sure will. The plant's promises are hard to believe not only because it has a three year history of not keeping them, but also because of the new turn of events that saw its main partner MVEN become tired of waiting and give up on the Kazakh airplane assembly plant. 

The aircraft plant was launched on November 22, 2011 with plans to produce several types of aircrafts: two agricultural planes for chemical treatment of soil: Farmer-2 worth around $145 thousand and Farmer-500 worth $200 thousand, and multipurpose 4-seater Sunkar. However, it has produced nothing but promises since then.

The plant's owners have been blaming MVEN - their partner in Kazan, Tatarstan, Russia - for the delays from the very beginning. The Russian partner allegedly failed to provide technical specifications and certificates for the aircraft assembly in time.

Director General of MVEN Viktor Yermolenko shared his side of the story with Business Online: "We suspended our agreement with them (Kazakh plant) in 2011 because they failed to fulfil the financial obligations. There are internal disputes in Kazakhstan now. They've got much to explain to their President. But this is their problem. They must have misused the money. And now they are fishing for excuses," he said.

In the meantime Alexander Vaschenko said just the opposite: "The plant is focusing on mass production of aircrafts, and therefore we need our Russian partners to provide the technology. (...) We have met all the terms of the agreement - made the prepayment, hired the personnel and etc. It is difficult to set a mass production. It has always been like this, the performance is normal under the circumstances, too," he said.

MVEN's Financial Director Mikhail Nevelskiy explained his company's role in the project in Kazakhstan. "We are the developers and suppliers of the technologies. We train Kazakhstani engineers in Kazan. And we have made some investments (into the Kazakhstan-based plant) that is why we are the co-founders of the project. But most of the investments came from Kazakhstan that has an industrialisation plan in place," he said. 

Earlier this summer First Deputy Governor of Karaganda Oblast Asylbek Duisebayev voiced the Kazakh side's position on the matter when he declared that reanimating the stalled Karaganda-based plant was no longer feasible or possible. "Some of the projects implemented as part of the Industrialization Map state-run project are sustained artificially. We are wasting our efforts and state budget money. It is unclear why we even need such projects. it is impossible to revive the KazAviaSpektr plant, so we need to refocus its production," Asylbek Duisebayev said.

In response, head of KazAviaSpektr company Alexander Vaschenko claimed he had never heard of any refocusing plans. And promised that Sunkar plant was not going to be shut down. "I do not know what these statements was based on. But I officially announce that in March this year, we signed an agreement with our partner in Kazan, so that they will demonstrate the assembly technology to us and we will then produce our first aircraft before October 1, 2014. (...) And it would be foolish to shut down the production in its fourth year only because something does not work. It is difficult, but we are still moving forward," Alexander Vaschenko said.

Not everyone seems to agree that producing nothing in four years is OK, though.

Less then a month ago, MVEN initiated a criminal case against KazAviaSpektr for holding back MVEN's Farmer-2 airplane at their plant in Kazakhstan for three years. 

Vaschenko confirmed that the airplane had been kept at the plant, but insisted that it was staying there legally because Sunkar plant and MVEN had a sublicense agreement on joint production. He did not dispute that the plane belonged to MVEN.

"We have broken no laws. No deforcement of an airplane has taken place, especially since they are citing a period as lengthly as three years. Where were their claims during those three years? Why haven't they filed any reports to the police earlier?" head of the Karaganda-based plant Aleksander Vaschenko said.

Besides, he revealed that his plant's personnel was using the plane as a model in their efforts to assemble the plants of their own. This most likely means that the 'model' has been stripped off most of its removable parts 'to see what's inside'. The assumption that the plane may no longer be operable is confirmed by witnesses' reports from one of the demonstrations held by the plant for Kazakhstani officials a couple of years ago where the plane "just leaned on its wing and was not flyable", and by Nevelskiy's statement that the plant repeatedly refused to provide the plane on behalf of MVEN for air shows held in Kazakhstan. 

When asked about the missing plane Nevelskiy confirmed to Business Online that MVEN "brought the plane to Kazakhstan while we were still on good terms" with the Kazakh partner, and left it at the plant because the partner said that it needed the plane as a demo and that they would subsequently buy it from MVEN. "So we left the plane there. But what we have now is that production at the plant has stalled and we are not getting the plane back," he said, adding that the Kazakh partner had offered no explanation as to why it was not returning the airplane or buying it as promised.  

There was a police search at the Karaganda-based plant after MVEN filed the lawsuit. "The plane was found at the plant. We provided the documents confirming our ownership of the plane. A criminal case over abuse of rights was initiated," he said. According to Nevelskiy, the cost of the plane is $150 thousand. 

After filing the lawsuit, the Russian aircraft developer company declared that it was not going to wait for the Kazakh plant to set up the production any longer and would instead establish an assembly plant in they hometown Kazan. The plant will be producing MV-500 planes - a new modification of Farmer-2 plane that is more of a complete revision rather then just a new version. "MV-500 has a higher efficiency. It is very deferent from its predecessor. Yes, we did start it was a modification, but got a completely different aircraft in the end," Nevelskiy said.  

"We had a delay, because we planned to produce this plane at a different site, not in Kazan, and now we have to relocate. We lost time and last year's potential orders," he said.

With the situation around the Kazakhstani aircraft assembly plant becoming more and more mazy, many of the involved are likely to lose quite a few nerve cells to say the very least. Since it has gone that far, one can only only wonder if anyone has lost a grasp of reality.

By Tatyana Kuzmina (Assel Satubaldina contributed to the story)