COST OF CONSTRUCTION OF THE SOVIET W-CLASS SUBMARINE

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• Document Creation Date: December 16, 2016
• Document Release Date: April 15, 2005
• Sequence Number: 1
• Publication Date: December 1, 1959
• Content Type: REPORT

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74
RESEARCH AID
COST OF CONSTRUCTION
OF THE SOVIET W-CLASS SUBMARINE
CIA/RR RA 59-19
December 1959
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
ONI Has Reviewed
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ceriai contains information affecting;
the meaning of the espionage laws,
18, USC. Secs. 793 and 794, the trans--
a m or revelation of which in any manner
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COST OF CONSTRUCTION OF THE SOVIET W-CLASS SUBMARINE
CIA/RR RA 59-19
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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This research aid on the cost of construction of the Soviet W-class
submarine was undertaken to fill a continuing need for placing a value
on the Soviet effort in naval shipbuilding in order to assess the rela-
tive importance and the role of this effort in the Soviet economy.
Specifically, the purpose of this research aid is to provide, as an
aid for economic studies of Soviet naval shipbuilding, a means of pric-
ing, in rubles, naval ships constructed in Soviet shipyards.
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CONTENTS
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Introduction . . . . . . . . . . . . . . . . . . . . . 1
2. Estimated Allocation of Tonnage to Weight Groups . . . 2
3. Estimated Cost of Construction in the US . . . . . . . . 3
4? Estimated Cost of Construction in the USSR . . . . . . . 6
a. Materials . . . . . . . . . . . . . . . . . . . . . . 6
b. Direct Labor and Overhead . . . . . . . . . . . . . . 9
5. Estimated Cost and Volume of the Program for the W-Class
Submarine . . . . . . . . . . . . . . . . . . . . . . . 9
Appendixes
1. Estimated Allocation of Tonnage to Weight Groups of
the Soviet W-Class Submarine . . . . . . . . . . . . . . 3
2. Estimated Cost of What the Construction Would Be of the
Soviet W-Class Submarine in the US . . . . . . . . . . . 4
3. Estimated Cost of Construction of Electric Plant, Equip-
ment for Communication and Control, Auxiliary Systems,
Outfit and Furnishings, and Armament of the Soviet
W-Class Submarine . . . . . ? . ? ? ? ? ? ? ? ? ? ? ? ? 5
4. Estimated Cost of Construction of the Soviet W-Class
Submarine . . . . . . . . . . . . . . . . . . . . . . .
5. Estimated Cost of Construction of the Hull Structure of
Soviet W-Class Submarine . . . . . . . . . . . . . . . . 7
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6. Estimated Cost of Construction of Propulsion
Machinery of the Soviet W-Class Submarine . . . .
7. Estimated Cost of Materials for Selected Cost
Groups for Construction of the Soviet W-Class
Submarine . . . . . . . . . . . . . . . . . . . .
8. Estimated Cost and Volume of the Program for
Construction of the Soviet W-Class Submarine,
1950-57 . . . . . . . . . . . . . . . . . . . . . 10
9. First Approximation of the Allocation of Tonnage
to Weight Groups of the Soviet W-Class Sub-
marine . . . . . . . . . . . . . . . . . . . . . 11
Following Page
USSR: Estimated Cost of Construction of the
W-Class Submarine . . . . . . . . . . . . . . 2
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COST OF CONSTRUCTION OF THE SOVIET W-CLASS SUBMARINE*
Summary
Extensive calculations on the cost of construction of the Soviet
W-class submarine indicate an estimated cost of 41 million rubles in
the USSR and an estimated cost of $10 million in the US.** The ruble-
dollar ratio thus derived is 4.1 rubles to $1. A categorization of
the cost into general categories is shown in the chart.
The estimated cost of the 244 W-class submarines constructed in
the USSR during 1950-57 was $2.l billion, or 10 billion rubles. This
estimate was obtained by using the values developed in this research
aid and the latest estimate of the weight of the W-class submarine,
750 tons light ship displacement. * !:/t
W-class submarines are the most numerous of any class in the Soviet
submarine fleet, which, in turn, is larger than the combined submarine
fleets of all the rest of the world. Of 295 long-range submarines in
* The estimates and conclusions in this research aid represent the
best judgment of this Office as of 15 November 1959.
** Ruble values are given in 1 July 1955 rubles, and dollar values
are given in 1955 US dollars throughout this research aid. Except
for labor costs, all computed monetary values have been rounded to two
significant digits.
* Following p. 2.
Tonnages are given in long tons (2,21+0 pounds) lightship dis-
placement throughout this research aid. Light ship displacement is
the weight of a vessel complete, ready for service in every respect,
including ballast and liquids in the machinery at operating levels but
excluding the crew and their effects and all items of consumable or
variable load such as stores, fuel, and cargo.
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the Soviet fleet, 2/ more than 80 percent are W-class ships, which thus
constitute the largest single class of submarine in the world. These
ships were constructed between 1950 and 1957 and served, more than any
other naval construction, to elevate the USSR to the status of a first-
class naval power.
The interest in the economic drain on Soviet resources of the pro-
gram for construction of the W-class submarine is obvious, and this
research aid represents an attempt to measure this drain by estimating
the cost of the program in rubles and dollars. The research aid sets
forth the evaluation accomplished and its methodology.
The calculation of the ruble and dollar values was accomplished
through the following series of steps: allocation of the tonnage of
the W-class submarine into weight groups according to the weight classi-
fication system used by the US Navy, determination of the cost of con-
struction of a W-class submarine in the US in terms of 1955 dollars,
conversion of the estimated dollar costs into rubles, and calculation
of a ruble-dollar ratio. The problems encountered and their resolution
are discussed below.
2. Estimated Allocation of Tonnage to Weight Groups
The allocation of the tonnage of the Soviet W-class submarine to
weight groups was estimated by analogy with US submarines in accordance
with the system of weight classification used by the US Navy.. 3/ To
find a submarine of approximately the same size as the W-class sub-
marine, it was necessary to go back to 1942, when the SS 205 submarine,
the USS Marlin, was completed. This submarine displaced 733 tons,
whereas the W-class submarine displaces 750 tons. All US submarines
of the fleet type that were constructed after the Marlin were at least
twice the weight of the USS Marlin.*
* Between 1950 and 1952, three small attack submarines, SSK 1-3
(900 tons), were built, but the analogy with the W-class submarine
is not appropriate. Therefore, no use was made of these submarines
in this research aid.
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The allocation of weights of the USS Marlin was used as the basis
for estimating the allocation of weights of the W-class submarine.
Some adjustments were necessary, however, and they are explained in
detail in Appendix A. The estimated allocation of weights of the
W-class submarine that is used in this research aid is shown in
Table 1.
Estimated Allocation of Tonnage to Weight Groups
of the Soviet W-Class Submarine
ht Grou
i
W
Long Tons
Light Ship
Displacement
Percent
of Total
p
e
g
Hull structure
315
41.9
6
Propulsion machinery
237
31.
Electric plant
17
2.3
Equipment for communication
0
and control
30
.
Auxiliary systems
101
13.5
8
Outfit and furnishings
21
2.
Armament
29
3.9
750
100.0
3. Estimated Cost of Construction in the US
Once the allocation of weights was estimated for the Soviet W-class
submarine, the estimation of costs was accomplished by analogy with the
SS 580, the USS Barbel (1,733 tons), for which complete costs and
accompanying weights were obtained through the US Navy from the Ports-
mouth Naval Shipyard in New Hampshire, where the ship was constructed.
The general method used was to attribute the cost per ton of construc-
tion of the USS Barbel to the W-class submarine, by weight group. In
practice, materials, direct labor, and overhead were considered sepa-
rately.
Throughout the analysis the assumption was made that it would take
as many man-hours to build the submarine in the US as in the USSR.
Although recent studies based on Soviet publications J indicate that
for comparable situations the USSR would use one-fourth to one-third
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more man-hours, it is considered that because the USS Barbel was not
constructed in series and the Soviet W-class submarine was, the Soviet
gains in productivity offset the basically greater productivity in the
US. A summary of the costs so obtained is shown in Table 2, and the
details of the dollar calculations are discussed below.
Estimated Cost of What the Construction Would Be
of the Soviet W-Class Submarine in the US
Cost Group
Hull structure
Propulsion machinery
Electric plant
Equipment for communication
and control
Auxiliary systems
Outfit and furnishings
Armament
Engineering services
Construction services '.a/
Postdelivery costs b/
Long Tons
Thousand Light Ship
1955 US $ Displacement
1,200 315
1,300 237
78o 17
2,600 30
1,900 101
370 21
620 29
380 Not applicable
520 Not applicable
290 Not applicable
10,000
a. This category is a cost group only and does not affect the cal-
culation of the weight of the submarine. The first seven groups
(hull structure through armament) are both cost groups and weight
groups.
b. Costs of changes and adjustments, which usually are made after
delivery of the submarine, for which the contractor is not respon-
sible under the contract.
To obtain the estimated cost of construction of the hull structure
of the Soviet W-class submarine in the US, costs and direct labor hours
per ton were obtained for the USS Barbel for 14 cost subgroups included
in the cost of the hull structure. The allocation of weights to these
subgroups, however, was accomplished by analogy with the SS 563, the
USS Tang. This procedure was followed because the USS Tang, like the
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W-class submarine, has a conventional hull shape, whereas the USS Barbel
has an "Albacore" (whale-shaped) hull. Direct labor was priced at
$2.25 per man-hour, and overhead was figured as 79 percent of direct
labor, as was done at the Portsmouth Naval Shipyard in 1955.* The re-
sulting costs of the hull structure are as follows: materials, $220,000;
direct labor, $525,000; overhead, $420,000; total, $1.2 million.
The average cost of materials per ton of the USS Barbel for pro-
pulsion machinery was $3,282, with an average labor time of 563 man-
hours per ton. The cost of the 237 tons of propulsion machinery of
the W-class submarine, therefore, was as follows: materials, $780,000;
direct labor, $300,000; overhead, $2+0,000; total, $1.3 million. The
calculations for electric plant, equipment for communication and con-
trol, auxiliary systems, outfit and furnishings, and armament were
accomplished in the same way as those for propulsion machinery, with
the results shown in Table 3.
Estimated Cost of Construction of Electric Plant,
Equipment for Communication and Control, Auxiliary Systems,
Outfit and Furnishings, and Armament of the Soviet W-Class Submarine
Thousand 1955
US $
Cost Group
Materials
Direct Labor
Overhead
Total
Electric plant
370
230
180
780
Equipment for communi-
cation and control
2,200
220
180
2,600
Auxiliary systems
620
710
560
1,900
Outfit and furnishings
59
170
140
370
Armament
120
280
220
620
Design and engineering charges constitute a cost group only and not
a weight group. It was estimated that there would be no significant
diminution in the cost of these services for a smaller submarine, and
so the costs were allocated on the basis of a 1-to-1 ratio, with results
as follows: materials, $9,000; direct labor, $206,000; overhead,
$160,000; total, $380,000.
* The same figures for labor and overhead were used for all cost groups
that follow.
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Construction services also constitute a cost group only and do not
enter into calculations of the weight of the submarine. This group
consists of six subgroups, the first three of which (staging, scaffold-
ings, and cribbing; launching; and trials and docking) would not be
affected greatly by differences in the size of the ship. Therefore,
these subgroups were attributed to the W-class submarine in a 1-to-l
ratio. The remaining groups (temporary utilities and services; pres-
ervation, rigging, and handling materials; and cleaning ship services)
were estimated to vary directly with the weight of the ship. The re-
sulting costs are as follows: materials, $36,000; direct labor,
$271,000; overhead, $210,000; total, $520,000.
Postdelivery costs (US $290,000) were estimated to vary directly
with the weight of the ship and to be 50 percent of this cost in direct
labor and 50 percent in materials.
4? Estimated Cost of Construction in the USSR
The estimation of the cost of construction of the Soviet W-class
submarine in terms of rubles generally involved the application of
appropriate ruble-dollar ratios to the dollar estimates given in the
previous section. It was found convenient to consider all the mate-
rials that were used in all cost groups first, then to estimate the
cost of direct labor, and finally to estimate overhead. A summary of
the results of the calculations is shown in Table 4,* and additional
details on these calculations are given below.
A ruble-dollar ratio of 6.5 to 1 for high-tensile steel plates
and shapes was used for subgroups consisting of plating and framing
in the hull structure. J For lead ballast a ratio of 13.3 to 1 was
used on the basis of a price for lead of 7,150 rubles per ton, J and
for the remaining subgroups the ratio of 5.7 to 1 for steel shapes was
used. 7/ The results are shown in Table 5.**
A ruble-dollar ratio of 9.6 to 1 was used for the submarine
batteries and for the main diesel plant for propulsion machinery be-
cause it was estimated that the ratios for marine diesels and for
storage batteries were almost identical, the ratio for marine diesels
being 9.6 to 1.*** For the other subgroups of the propulsion ma-
chinery group the ratio of 6.2 to 1 for seamless steel pipe was used. 9/
The results are shown in Table 6.****
* Table follows on p. 7.
** Table 5 follows on p. 7.
*** Based on source 8/.
*** Table 6 follows on p. 8.
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Table 4
Thousand
Cost Category and Group
1955 Rubles
Ruble-Dollar Ratio
Hull structure
1,500
6.8 to 1
Propulsion machinery
7,200
9.2 to 1
Electric plant
1,100
3.0 to 1
Equipment for communication
and control
13,000
6.0 to 1
Auxiliary systems
2,200
3.5 to 1
Outfit and furnishings
270
4.5 to 1
Armament
400
3.4 to 1
Engineering services
41
4.5 to 1
Construction services
160
4.5 to 1
Postdelivery costs
860
5.9 to 1
27,000
5.9 to 1
Direct labor
5,600
1.8 to 1
Overhead
8,300
3.6 to 1
41,000
4.1 to 1
Estimated Cost of Construction
of the Hull Structure of the Soviet W-Class Submarine
Thousand Thousand
Cost Subgroup 1955 US $ 1955 Rubles Ruble-Dollar Ratio
Shell plating and
framing
110
710
6.5
to 1
Lead ballast
21
280
13.3
to 1
Other
91
520
5.7
to 1
220
1,500
6.8 to 1
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Table 6
Estimated Cost of Construction
of Propulsion Machinery of the Soviet W-Class Submarine
Cost Subgroup
Thousand Thousand
1955 US $ 1955 Rubles
Ruble-Dollar Ratio
Main propulsion plant
696
6,700
9.6 to 1
Other
82
510
6.2 to 1
Total
778
7,200
9.2 to 1
The ratio of 3.0 to 1 used for electric plant is based on gen-
eral electrical equipment, including generators and similar items. 120/
The ratio of 6.0 to 1 used for equipment for communication and control
is that attributable to military electronics. 11 The ratio for aux-
iliary systems is based on prices for pumps, compressors, and similar
items and is estimated at 3.5 to 1. 12 Attributed to outfit and
furnishings, engineering services, and construction services was a
ratio of 4.5 to 1, which represents the general category of machinery
and equipment. L3/ The ratio of 3.4 to 1* used for armament is the
ratio for tanks. The results of the application of these ratios are
shown in Table 7.
Table 7
Estimated Cost of Materials for Selected Cost Groups
for Construction of the Soviet W-Class Submarine
Thousand Thousand
Cost Group
1955 US $ 1955 Rubles
Ruble-Dollar Ratio
Electric plant
366 1,100
3.0 to 1.
Equipment for communication
and control
2,210 13,000
6.o to 1.
Auxiliary systems
617 2,200
3.5 to 1
Outfit and furnishings
59 270
4.5 to 1
Armament
118 400
3.4 to 1
Engineering services
9 41
4.5to1.
Construction services
36 160
4.5 to 1.
* Based on source L4/.
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Applied to that part of postdelivery costs allocated to mate-
rials was a ratio of 5.9 to 1, the average ratio for the cost of all
other materials. Thus the $1+5,000 worth of materials in postdelivery
costs is equivalent to 860,000 rubles.
b. Direct Labor and Overhead
h labor rate in Soviet shipyards was taken as 4.0 rubles
per hour 25X1
The rate at the Portsmouth Naval p
$2.25 per hour, w ch yielded a ruble-dollar ratio of 1.8 to 1 for
labor. Application of this ratio to the $3.1 million estimated to
have been expended on direct labor in construction of the W-class
submarine resulted in a ruble value of 5.6 million.
Overhead was counted as one-third labor and two-thirds mate-
rials. The ruble-dollar ratio for labor was 1.8 to 1, and the ratio
for materials was 4.5 to 1, which is the ratio used previously for
machinery and equipment. Application of these ratios, weighted as
indicated, to the total overhead cost of $2.3 million yielded a cost
in the USSR of 8.3 million rubles and an average ratio of 3.6 to 1 for
overhead.
5. Estimated Cost and Volume of the Program for the W-Class Submarine
The ruble-dollar ratio developed in this research aid and the recent
reevaluation of the size of the Soviet W-class submarine 16 permit a
more accurate estimate of the cost of the program for construction of
W-class submarines.
The program, which spanned the years 1950-57, resulted in construc-
tion of 244 ships totaling 183,000 tons. The value of the program is
$2.1l billion, or 10 billion rubles. Detailed data, by individual year,
are shown in Table 8.*
* Table 8 follows on p. 10.
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