Czech government cancels 1.1 billion-dollar arms contract

The Czech defence minister, Vlasta Parkanova, said on Tuesday that the Czech government had decided to withdraw from a deal to buy armoured personnel carriers from an Austrian arms producer. It is not just any contract, but – at over a billion US dollars – one of the biggest in the history of the Czech Army.

Photo: CTK

One of the biggest deals in the history of the Czech army is over. At a closed meeting last week, the Czech government decided to pull out of a deal worth CZK 20 billion (USD 1.1 billion) to buy 199 armoured personnel carriers from the Austrian manufacturer Steyr Daimler Puch, a part of the US-based General Dynamics Corporation. Andrej Cirtek is the spokesman for the Czech Defence Ministry.

“The contract was cancelled due to the long delay which would, in ideal case, take up the first half of 2008 while the first 17 APCs should have been delivered to the Czech army until the end of November 2007.”

Jan Vidim, the head of the Chamber of Deputies’ defence committee, said on Tuesday that besides being late and not having passed the tests required by the Czech MOD, the contract was faulty from the very start; he says the Czech Army needs different types of vehicles rather than 200 eight-wheel Pandur carriers.

“I am simply convinced that the Czech Army cannot make good use of those 199 carriers. What we need is six-wheelers, armoured four-wheelers and a number of different types of vehicles. Buying 199 eight-wheeled vehicles was just wrong.”

Vlasta Parkanova and Jan Vidim, photo: CTK

Defence Ministry spokesman Andrej Cirtek says that they will wait for the reaction of Steyr before taking any further steps. The Steyr Daimler Puch press office declined to comment on Wednesday in anticipation of a meeting with Czech MOD officials.

The Steyr Daimler Puch Company won the contract in 2006, when Karel Kuhnl was defence minister. At the time his ministry was heavily criticized for concluding such a big contract as it was obvious that Mr Kuhnl would not remain in the post for long. Jan Vidim again.

“I think that it was very bold to sign the contract after losing general elections. The minister acted on the opinion of the General Staff of the Czech Army, which put forth its demands. I believe that the ministry should have revised those demands. I am really worried that the expensive APCs could end up in storage.”

Spokesman Andrej Cirtek says the Defence Ministry does not expect that the Austrian arms producer will contest the government’s decision in a court of arbitration.

“The contract was concluded between the Ministry of Defence and a Czech company. According to our legal survey, we don’t see any possibility of an international arbitration.”