Russia Cuts Funding to Build River-Sea Cargo Ships Citing Sanctions
Reports from Russia indicate that an ambitious program to build a new generation of river-sea cargo ships has been reduced. The Moscow Times cites the impact of high interest rates, import substitution, sanctions, and labor shortages for cuts to the government-subsidized shipbuilding program.
The contract for the construction program was awarded in June 2023 and called for 34 RSD 59 dry cargo ships as part of an effort to modernize the Volga-Donmax service. The Krasnoye Sormovo Shipyard hailed it as the largest series in the history of JSC United Shipbuilding Corporation. The government was slated to provide most of the financing for the construction in a partnership with lender GTLK.
The Russian media outlet Vedomosti reports the budget was revised in December 2025 for a total of 18 ships, with the government providing a reduced funding of approximately $300 million. The reports said the cost per ship has risen from $16.4 million to nearly $22 million.
The Western sanctions, which included elements targeting the Russian shipbuilding industry, limit the imports of Western-made equipment. Russia’s industry has been working to substitute domestically made elements.
The shipyard said it had begun work on the new ships in September 2024, after having delivered five RSD 59 vessels in a previous series. In November 2024, it reported the keel laying for sections of the new ships, but The Moscow Times says no ships were delivered in 2024, and the project is behind schedule.
The shipyard had said it expected investments in 2025 to increase its capacity. It was targeted to be able to build up to 20 dry cargo ships per year. Delivery of the ships has been delayed to now run till 2028.
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The RSD 59 class are vessels 141 meters (462 feet) in length designed to carry general and bulk cargo. This includes grain, coal, lumber, timber, scrap metal, metal products, and oversized cargo.
The Russian government had outlined in May 2025 an ambitious program to expand commercial shipbuilding. It committed to investing more than $6 billion to expand and modernize commercial shipbuilding in Russia. Reports said it was to counter the Western sanctions.