Flying Saucer: A $1 Billion 'Bargain'

The future is just a few billion dollars away, Russian aerospace conversion officials said Monday as they launched a search for foreign investors to fund a range of exotic hi-tech projects such as building a flying saucer."It's a whole new concept of aerodynamics," chairman of the center for conversion in the aerospace industry, Vladimir Tsarkov, enthused. "The aircraft won't need wings or airfields. It will be able to take off and land like a helicopter, using only a small area."The cost? A mere $1.125 billion.According to Tsarkov, the flying saucer and eleven other projects have been approved by the Russian government at all levels. Every stamp and signature is in place and even the Finance Ministry supports the projects as long as it does not have to provide the funds.The conversion center has launched its latest drive for foreign investment because Russian venture capital has been hard to find, Tsarkov said."Nobody wants to make long-term investments into industry," he complained. But neither Tsarkov nor his deputy, Russia's second man in space Gherman Titov, seemed to have much hope for a windfall from the West.Titov on Monday told a seminar attended by about 100 Russian industrialists seeking foreign investment that 84 percent of the foreign capital invested in Russia by March went to the energy sector, trade and the lumber industry, rather than to conversion.Titov said that the conversion center had received numerous offers from foreign companies willing to invest, but they had all demanded government guarantees."And I asked them, what government are you asking for guarantees?" Titov said. "The Pavlov government? The Gaidar government?"In Russia's current unstable political situation, the only guarantee Titov could offer was the conversion center's ties to top government officials like security council chief Oleg Lobov."So far, the government has listened to our recommendations," Titov said. Even so, the government has often been powerless to act. Tsarkov said there had been a cabinet resolution to allocate 4 billion rubles ($2 million) to the upgrading of the old Antonov-2 light cargo plane, but the money had never materialized.Other projects for which the conversion center sought financing included a $250 million plan to use military satellites as a basis for an ultramodern telecommunications network, a $40 million technology that would turn waste from oil refineries into usable fuel and a highway that would connect Moscow with Russia's western border via St. Petersburg.The latter plan, which Tsarkov said would cost "billions of dollars," would help Russia create jobs for retiring servicemen, refugees from former Soviet republics and unemployed miners from the Vorkuta coal basin."This is a gold mine," Tsarkov said, referring to the potential income for any company that might build and run the highway's infrastructure such as gas stations. Richard Murray, a managing partner in the international consulting company Coopers & Lybrand which helped organize the seminar, said Monday that while his company had plans to bring together Russian industrialists and potential Western investors, all the deals were still in their initial stages.Murray said it was possible for Russian companies to attract foreign investors. "But they often need to introduce marketing and financial control, replace plant equipment and significantly change their approaches," he said.