2024-08-07 15:35:17
The Committee on Budget and Finance approved a draft decision on the adoption of the Investment Expenditure Project “Acquisition of Anti-Aircraft Missile Complexes”, submitted by the Council of Ministers on August 1.
The draft resolution was supported yesterday by the Defense Committee.
Acting Deputy Minister of Defense Adelina Nikolova noted during the presentation of the project that in implementation of the “Program for the Development of the Defense Capabilities of the Armed Forces of Bulgaria 2032” the Ministry of Defense has developed a project for the acquisition of anti-aircraft missile complexes (ZRK), including the acquisition of 2 long-range air defense systems and 8 medium-range air defense systems, as well as everything necessary to achieve the effective operation and maintenance of the acquired air defense systems. She explained that the project will be implemented in stages given the significant cost of this type of equipment.
With a view to the implementation of the project, with a decision of November 30, 2023 of the Council of Ministers, Bulgaria joined the Memorandum of Understanding on Germany’s “Shield of the European Sky” initiative. The overall objective of the initiative is to promote cooperation in the joint procurement of defense products in accordance with EU policy in this area.
The project for investment expenditure “Acquisition of anti-aircraft missile complexes” was prepared on the basis of agreements reached during meetings held in July with representatives of the Federal Ministry of Defense of Germany and the company “Diehl Defense”, which was selected as the contractor under this project, and provides for the acquisition of one air defense system “IRIS – T SLM”, equipped with combat missiles, training and certification of the engineering and technical staff and integrated logistic support for a total value of BGN 356,184,633, excluding VAT. The complex is expected to be delivered to Bulgaria in 34 months, and it will acquire operational capabilities in 39 months.
Given the scope of the entire project, the contract additionally provides for the possibility of purchasing up to 5 “IRIS-T SLM” units (Option 1) with a fixed price of BGN 313,628,795 excluding VAT, which is valid until the end of 2027 and on 1 long-range system “IRIS-T SLX” (Option 2) with a fixed price of BGN 587,489,597 excluding VAT, valid until the end of 2031, with an annual price increase of 4.5 percent. The inclusion of these options in the Program Agreement between the Ministries of Defense of the two countries and in the Addendum to the contract concluded in 2023 between the Federal Ministry of Defense and “Diehl Defence” does not bind Bulgaria in legal or financial terms, but at the same time gives advantages to the Bulgarian side in the case of a decision, if such is made, for the subsequent acquisition of additional complexes to use the favorable time schedule for their delivery, as well as the already fixed price.
In the event that at a later stage the MoD has the necessary resources and a decision is made to acquire additional complexes, the relevant Project for investment expenditure will be submitted to the National Assembly for approval, Nikolova explained.
The first stage of the Project “Acquisition of Anti-Aircraft Missile Complexes” is planned to be financed from the defense costs of Bulgaria, as well as from the received in 2024 and from the expected in 2025 compensatory sums for donations of weapons and equipment. For this purpose, in the relevant subsequent years, defense costs should be at levels that allow the provision of the necessary financial resources, including both the specified funds under the contract and the necessary costs for VAT, customs duties and transport costs, BTA reports.