Finnish defense contractor Patria announced Wednesday that it is suspending production of armored personnel carriers at a plant in Slovenia. According to Patria, production will not be resumed until a new agreement on vehicle deliveries is reached with the Slovenian armed forces.
Patria believes that a new deal will be reached sometime this autumn.
According to Seppo Seppälä, Executive Vice President of Patria’s Land & Armament business unit, the Slovenian armed forces want to modify the existing contract to cut the number of 8×8 vehicles from 135 to around 80 and to upgrade features of the vehicle on order.
In June, Slovenia decided to make heavy cuts in its defense budget.
The original deal was for 135 of the armoured personnel carriers to be delivered to the Slovenian army and was worth around 280 million euros. With upgraded models, the value of the lower number of vehicles will be about the same.
Patria delivered the first of the 135, after delays, in mid-June of this year. According to contract, delivery of the first 13 was to have taken place in late 2008.
The Slovenian military has also expressed dissatisfaction with the quality of the vehicles delivered.
“Patria is delivering exactly what was ordered under the contract. We are now discussing details that were not completely specified in the contract. Claims that we have delivered something other than was agreed upon, are not true,” says Patria’s Seppälä.
Patria is under investigation for paying bribes to Slovenian defence ministry officials and to former Prime Minister Janez Janša. One of the chief suspects in the case is an Austrian. Investigations into the allegations are under way in Finland, Slovenia and Austria.
Finland’s National Bureau of Investigation is also carrying out an investigation into whether Patria’s subsidiaries or personnel are guilty of bribery in connection with the company’s field gun manufacturing technology sales in Egypt.
