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Defence Ministry Prepares Mechanism to Develop Protected Infrastructure for Defence Industry Firms

At the Defence Ministry, they want to simplify the construction of underground production facilities and involve private capital, developers and investors in their creation.

Defence Ministry Prepares Mechanism to Develop Protected Infrastructure for Defence Industry Firms
Photo: Ministry of Defence

Ukraine’s Defence Ministry is working on creating a systematic mechanism to develop protected production infrastructure for defence-industrial complex enterprises.

This was reported by the ministry.

The changes envisage simplifying the construction of underground production facilities, as well as the above-ground infrastructure that is technologically and functionally linked to them.

One of the key elements of the work is amending Cabinet of Ministers Resolution No. 1494. According to Deputy Defence Minister Hanna Hvozdyar, the new model should make it possible to scale up Ukrainian defence production while increasing its protection at the same time.

"Our task is to create conditions under which Ukrainian defence production can scale up and become more protected at the same time," Hvozdyar said.

According to her, the mechanism should also reduce such projects’ dependence on budget funding and speed up the creation of new production capacity.

The proposed mechanism provides that the client commissioning the construction of protected production facilities may be not only a defence-industry enterprise, but also another legal entity — in particular a developer or a private investor.

Using their own or raised funds, they will be able to build a facility and then transfer it to a defence-industry enterprise into ownership, lease or use.

The Defence Ministry notes that this will make it possible to attract non-budget resources to develop protected infrastructure. At the same time, implementing the mechanism itself does not предусматривает additional expenditure from the state budget.

It is also proposed to secure the concept of an underground production-infrastructure facility and extend the simplified mechanism to the above-ground buildings and structures associated with it.

The draft amendments have already passed the main stage of interagency review. The document is currently being finalised following legal and anti-corruption examinations, after which it is planned to be submitted for consideration by the Cabinet of Ministers.

The Defence Ministry expects that the new mechanism will contribute to faster creation and expansion of protected production capacity, the relocation of defence-industry enterprises, and the attraction of private investment into the development of underground industrial construction.

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