The Watcher
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Reuters
Bulgaria plans $1.0 bln army upgrade, troop cuts
By Tsvetelia Ilieva
SOFIA, May 27 (Reuters) - NATO newcomer Bulgaria is to spend almost $1 billion on military equipment over the next few years and slim down its armed forces to meet the western Alliance's standards, government members said on Thursday.
As part of 11 projects worth an estimated 1.5 billion levs ($938 million), the Balkan country's government agreed to buy new combat and transport jets, following a recently failed attempt to upgrade its fleet of ageing MiG fighters.
It also decided to upgrade its fleet of Soviet-made helicopters, purchase new and second-hand military ships and buy intelligence and communications equipment, Economy Minister Lidia Shuleva said.
The cabinet will prepare a strategy on how to choose contractors in the next month, and it will seek offset schemes and beneficial financing to reduce strain on the impoverished country's budget, she added.
Bulgaria joined NATO at the end of March.
"On one side we have pledged to modernise our army (to NATO standards), but on the other we cannot secure the funds needed from the state budget," Shuleva said after a government meeting.
"That's why we'll be looking at different financial schemes. We will be looking for grace periods, financial leasing, payment rescheduling...and offset projects worth between 70 to 100 percent of projects from bidders."
The cabinet will begin preliminary talks with interested contractors once its strategy is complete, but Shuleva said some projects would be scrapped if costs run over the goal of spending 1.5 billion levs "in the next few years."
She did not give a more specific timetable, but said she did not expect any deal to be signed this year.
AIRCRAFT UPGRADES
Earlier this month, Bulgaria cancelled a $60 million contract with Russian defence firm RSK MiG due to repeated delays to the upgrade of the army's 20 MiG-29s.
Shuleva would give no information on a specific strategy for the jets, but as the new plan envisions the purchase of new aircraft, the fate of the obsolete MiGs was unclear.
An end-2003 target to agree an upgrade of Bulgaria's 36 Mi-17 and Mi-24 helicopters has also passed without result, and industry insiders said the new plan would likely further postpone the project estimated to be worth $150 million.
Bulgaria has already received offers for the helicopter upgrade from Britain's BAE (London:BA.L - News), European defence firm EADS (Paris:EAD.PA - News), and state-owned Israel Aircraft Industries.
Israeli contractor Elbit System, joined with U.S. Lockheed Martin, France's Sagem and several Russian companies are also vying for the contract.
Deputy Defence Minister Ilko Dimitrov said talks with Germany's DaimlerCrysler, which is planning to supply the army with 12,900 new vehicles at an estimated at 1.0 billion levs ($625.4 million), would not be postponed.
The government also agreed to cut its army to 39,000 troops from 45,000 at present, by 2015, Dimitrov said. The decision must be approved by parliament to take effect.
Bulgaria plans $1.0 bln army upgrade, troop cuts
By Tsvetelia Ilieva
SOFIA, May 27 (Reuters) - NATO newcomer Bulgaria is to spend almost $1 billion on military equipment over the next few years and slim down its armed forces to meet the western Alliance's standards, government members said on Thursday.
As part of 11 projects worth an estimated 1.5 billion levs ($938 million), the Balkan country's government agreed to buy new combat and transport jets, following a recently failed attempt to upgrade its fleet of ageing MiG fighters.
It also decided to upgrade its fleet of Soviet-made helicopters, purchase new and second-hand military ships and buy intelligence and communications equipment, Economy Minister Lidia Shuleva said.
The cabinet will prepare a strategy on how to choose contractors in the next month, and it will seek offset schemes and beneficial financing to reduce strain on the impoverished country's budget, she added.
Bulgaria joined NATO at the end of March.
"On one side we have pledged to modernise our army (to NATO standards), but on the other we cannot secure the funds needed from the state budget," Shuleva said after a government meeting.
"That's why we'll be looking at different financial schemes. We will be looking for grace periods, financial leasing, payment rescheduling...and offset projects worth between 70 to 100 percent of projects from bidders."
The cabinet will begin preliminary talks with interested contractors once its strategy is complete, but Shuleva said some projects would be scrapped if costs run over the goal of spending 1.5 billion levs "in the next few years."
She did not give a more specific timetable, but said she did not expect any deal to be signed this year.
AIRCRAFT UPGRADES
Earlier this month, Bulgaria cancelled a $60 million contract with Russian defence firm RSK MiG due to repeated delays to the upgrade of the army's 20 MiG-29s.
Shuleva would give no information on a specific strategy for the jets, but as the new plan envisions the purchase of new aircraft, the fate of the obsolete MiGs was unclear.
An end-2003 target to agree an upgrade of Bulgaria's 36 Mi-17 and Mi-24 helicopters has also passed without result, and industry insiders said the new plan would likely further postpone the project estimated to be worth $150 million.
Bulgaria has already received offers for the helicopter upgrade from Britain's BAE (London:BA.L - News), European defence firm EADS (Paris:EAD.PA - News), and state-owned Israel Aircraft Industries.
Israeli contractor Elbit System, joined with U.S. Lockheed Martin, France's Sagem and several Russian companies are also vying for the contract.
Deputy Defence Minister Ilko Dimitrov said talks with Germany's DaimlerCrysler, which is planning to supply the army with 12,900 new vehicles at an estimated at 1.0 billion levs ($625.4 million), would not be postponed.
The government also agreed to cut its army to 39,000 troops from 45,000 at present, by 2015, Dimitrov said. The decision must be approved by parliament to take effect.