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17 Aug 23. Poland to Spend Billions to Support Defence Industry PGZ. During the sheets cutting ceremony for the Miecznik frigate, the head of the Ministry of State Assets, Jacek Sasin, announced that legal solutions have been developed, designed to provide PLN13bn. (approx. EUR2.9bn) of extra capital for the PGZ Group.
The Minister of State Assets mentioned the support for the defence industry at the Miecznik frigate steel-cutting ceremony. Sasin mentioned the fact that PGZ War Shipyard received PLN 300m of extra capital back in 2017, which allowed the facility to continue manufacturing efforts.
Jacek Sasin also mentioned other facilities, within the scope of provision of extra funds – including HSW, Mesko, or Bumar-Łabędy.
“HSW S.A. received PLN 600m. Further funds will also be provided to Stalowa Wola and Bumar. 800m zlotys are expected to be provided to launch a second production line for the Krab howitzers. The Ministry of State Assets has prepared legal solutions needed to provide extra PLN 13 bn. to PGZ, in order to boost the recovery in the defence industry, creating circumstances in which the Polish Armed Forces would be receiving weapons manufactured at domestic factories,” Jacek Sasinsaid.
“Rzeczpospolita” reported that the assets destined to provide extra capital for the PGZ would come from the Reprivatization Fund. So far, that Fund does not have amounts as such available. Extra money needs to be provided (for instance through issuing of state bonds). Alternatively, it shall be just one of the sources for financing, with other sources possibly involved as well.
As Minister Sasin said, the extra capital will be needed to boost the manufacturing potential about Polish equipment, such as the Krab howitzers, Piorun MANPADS, and Grot missiles, and also to launch license-manufacturing of Korean equipment in Poland, such as the K2PL main battle tanks that are expected to be manufactured at WZM in Poznan (extra capital for that company had been previously announced), and K9PL howitzers.
One should add that procurement involving the Polish defence industry planned (including 1,000 Borsuk IFVs, several hundred heavy IFVs, more than 2,000 ZSSW-30 turrets, 820 K2PL main battle tanks, 500 of which to be manufactured in Poland, at least several hundred howitzers and MLRS systems including K9A1, Krab, HIMARS and K239) calls for a significant increase in the manufacturing capacity. Not only does the above refer to deliveries of the equipment, but also the life-cycle maintenance. This, especially in the case of equipment procured in large batches, and delivered during periods of 10 years, may annually be as costly as the deliveries alone.
Whether the Polish industry will be able to handle the lifecycle, and manufacturing would be decisive for the success of the Polish modernization programme. Maintaining so much equipment based on external help from foreign partners would not be possible. This matter will be discussed in the future, by Defence24.pl.
So far, the provision of extra capital for Polish businesses is ongoing, with different stages of advancement. In some companies we would see undertakings underway, that have been underway already, waiting for financing. Once the funds are provided, it would be relatively easy to launch the works. On the other hand, in some cases, extra conceptual and analytical efforts will be required.
For instance, when it comes to the 800m zlotys-worth investment announced by PM Morawiecki, needed to launch the manufacturing of the Krab howitzers at ZM Bumar Łabędy, the PGZ Group told us the following: “The extra financing announced by PM Mateusz Morawiecki will be used, in its entirety, to fund the activities related to the launch of a new Krab howitzer production line at ZM Bumar-Łabędy S.A. Given the scale of this undertaking, this is a very complex, multi-staged process, that is expected to be spread across a longer timeline, and both the Gliwice-based company, as well as other PGZ Group entities, are getting ready to begin that process. Currently, technical and analytical-conceptual arrangements are being made, related to the implementation of this undertaking. We will be informing you on the further stages of this project in an ongoing manner”. (Source: https://www.defense-aerospace.com/ Defence24 Poland)
17 Aug 23. Estonia and the Czech Republic Sign Agreement to Promote Defence Cooperation. Magnus-Valdemar Saar, Director General of the Estonian Centre for Defence Investments (ECDI), and Lubor Koudelka, Director General of the Armaments and Acquisition Division of the Czech Ministry of Defence, signed a memorandum of understanding, which lays the foundation for defence cooperation between the two countries.
The aim of the agreement is to cooperate in the field of armaments and their procurement. ‘The Czech Republic has strong companies operating in the defence industry. We hope that the cooperation agreement will create closer connections with the industry there and bring more of their manufacturers to participate in our procurements,’ said Magnus-Valdemar Saar, Director General of the ECDI.
Thanks to the memorandum of understanding signed on 15 August, Estonia and the Czech Republic will be able to start jointly procuring defence equipment in the future. ‘In the future, joint procurements will make Estonia’s situation on the market much more favourable, as cooperation with the Czech Republic will increase the volume of procurements and thus create economies of scale. In addition, joint procurements will allow us to leverage our institution’s engineering expertise and share the costs of project management,’ said Saar.
‘I would like to stress that today’s signature of the Memorandum of Understanding is a symbolic but important step. It represents a new era in collaboration between our countries and an increasing importance of the Baltic region overall. Today’s discussion showed, that we have much to learn from countries like Estonia. For us the MoU is not only about increasing relations through defence industry, but also about sharing best practices and experiences in acquisitions and procurements. We hope to strengthen our relations with the ECDI and hopefully the MoU can lead to some future joint procurements,’ said Lubor Koudelka, Director General of the Armaments and Acquisition Division of the Czech Ministry of Defence. (Source: https://www.defense-aerospace.com/ Estonian Centre for Defence Investments)
17 Aug 23. First Round of Attack Helicopters Arrive in the Czech Republic. Two AH-1Z Vipers arrived in the Czech Republic this week, marking the first in-country delivery as part of a partnership with the US Marine Corps H-1 Light/Attack Helicopter program office (PMA-276) and industry partner, Bell.
“Four years ago, we embarked on a journey with the Czech Republic Air Force to deliver the H-1 family of aircraft, including four AH-1Z and eight UH-1Y helicopters,” said Col. Vasilios Pappas, PMA-276 program manager. “Since then, we have worked together to award the required contracts, deliver the applicable logistics equipment, develop a training program and so much more, all in preparation for this delivery. This is a remarkable milestone.”
In 2019, the Czech Republic selected the H-1 to modernize the country’s armed forces and strengthen its homeland defense and the country is expected to be independently operating by late-2024.
A lot has transpired since the initial contract.
From a training perspective, an initial team of Czech aircrew and maintainers had the opportunity to complete the Marine Light/Attack Helicopter Training Squadron (HMLAT) 303 training pipeline, graduating earlier this year. Beginning this fall, H-1 crews will train alongside representatives from Bell, and its supplier, Pinnacle Solutions, through a “train-the-trainer” model. Pilots, crew chiefs and maintainers will learn the additional skills required to operate and sustain its fleet of AH-1Z and UH-1Y helicopters, and train other members of its force.
In addition, the country has a Flight Training Device (FTD) to support skills development, offering access to the controls and weapon systems for preparation purposes. The Czech Republic FTD broke ground in March 2023 and construction will finish in time to begin training this fall.
Now, with the aircraft in-country, the Czech Air Force can begin the acceptance process and over the next 12 months, additional aircraft will arrive based on the production schedule.
The Czech Air Force squadron is expected to be independently operating in late-2024. PMA-276 manages the end-to-end procurement, development, support, fielding and disposal of the Marine Corps and international customers H-1 family of aircraft. (defense-aerospace EDITOR’S NOTE: The Czech Republic took delivery of its first two AH-1Z Venom attack helicopters in late July.) (Source: https://www.defense-aerospace.com/ Naval Air Systems Command)
15 Aug 23. British police said on Tuesday they had charged three Bulgarian nationals with identity document offences following a media report they were suspected of spying for Moscow. The trio were among five people arrested in February for a suspected breach of the Official Secrets Act, according to a Metropolitan Police statement. The BBC had earlier reported they were suspected of working for the Russian security services. The Met, which has a policing responsibility for espionage, declined to comment on whether any were suspected spies. “In relation to the Official Secrets Act investigation, all five individuals were later released on police bail and are due to return in September 2023 . . . Enquiries continue.” The two men and one woman were subsequently charged with possessing false identity documents with “improper intention”. A police statement named them as Orlin Roussev, 45, of Great Yarmouth, Norfolk, and Bizer Dzhambazov, 41, and Katrin Ivanova, 31, both of the same address in Harrow, north-west London. They appeared at London’s Old Bailey court in July on the fake document charges and were remanded in custody until a future date. The three named defendants have lived and worked in the UK for more than a decade, the BBC reported. Roussev moved to the UK in 2009, according to the report, originally spending three years as a technician in the financial services industry. According to his LinkedIn profile, he owns a business involved in signals intelligence, which involves the interception of communications or electronic signals. But according to company registration documents it was dissolved in November 2021. Roussev also claimed on LinkedIn to have acted as an adviser to the Bulgarian Ministry of Energy. The BBC reported that of the other two, Dzhambazov was a driver for hospitals, while Ivanova describes herself on her LinkedIn profile as a laboratory assistant for a private health business. The pair also ran a community organisation providing services to Bulgarian people, including familiarising them with the “culture and norms of British society”, the BBC said. Russian spies have been involved in several high-profile plots in Britain including the 2006 murder of Russian dissident Alexander Litvinenko and the attempted murder in 2018 of Russian defector Sergei Skripal. All three of Russia’s spy agencies, including the Federal Security Service or FSB, which Vladimir Putin ran before he became prime minister and subsequently president, have been involved in UK operations. The other two services are Russian military intelligence, known as the GRU, and the SVR foreign intelligence service. Russia’s full-scale invasion of Ukraine has led to the expulsions across Europe of about 400 Russian diplomats for alleged spying. There have been other recent cases of western security services exposing so-called Russian sleeper agents or “illegals” working under deep cover. These include the arrest of a Brazilian university researcher last year in Norway on suspicion of spying for Moscow. The UK, which has named Russia as the “most acute threat” to Britain’s national security, last month passed a new national security law that seeks to deter espionage and foreign interference with new tools and criminal provisions. (Source: FT.com)
15 Aug 23. UK ministers miss small business procurement spending target. The UK government missed its target for channelling a greater proportion of procurement spending into small and medium-sized enterprises last year despite a record outlay of £21bn on goods and services from smaller providers. The Cabinet Office set the target in 2015 to increase central government procurement spending on SMEs to a third of the total within five years, a deadline that was later extended to 2022. Total spending on SME procurement rose £1.7bn to £21bn in the 2021-22 fiscal year, according to data to be published by the Cabinet Office on Tuesday. This equates to 26.5 per cent of total central government procurement spending, down marginally from 26.9 per cent a year earlier. When the target was set in 2015, SMEs accounted for 26 per cent. Nine government departments reached the 2015 target of awarding one-third of their contracts to smaller providers, defined as companies with fewer than 250 employees, according to the official figures. The Department for Culture, Media and Sport allocated 45.4 per cent of its direct and indirect spending to SMEs — more than any other department. Indirect spending includes spending that is passed on to SMEs through the supply chains of larger providers. In an official statement, Cabinet Office minister Jeremy Quin hailed the “record-breaking figures”, pointing out it was the fifth consecutive year of increased spending on smaller businesses but did not address missing the target. But one Cabinet Office official stressed that the government had recently introduced draft legislation on public procurement, which is designed to make it easier for SMEs to win work. “We recognise SMEs aren’t getting a fair deal currently. That’s precisely why we introduced the procurement bill which will sweep away the barriers small businesses face,” they said. Martin McTague, national chair of the Federation of Small Businesses, said the government “may be heralding these figures as a success” but that it had “fallen woefully short” of its own target. “Failure to contract with a wide range of businesses is bad for the taxpayer,” he said, as he called on ministers to “rediscover the ambition” of using SMEs for 33 per cent of procurement spending. The target must be backed by a coherent plan “or else it’s just window dressing”, he added. The procurement bill would require government departments and other public bodies to consider SMEs when designing contract tenders to make it easier for smaller providers to compete. It would give small businesses better visibility of forthcoming contracts so they have more time to prepare and establish a “central platform” so bidders can see the work available in each area. It will also reduce insurance costs before a supplier has bid for a contract and strengthen prompt payment rules, forcing public sector organisations to pay companies within 30 days. (Source: FT.com)
15 Aug 23. Ellemann: Mistakes Were Made in Connection with Artillery Procurement. The accounts of the proceedings in the Elbit case show that mistakes have been made and that in several cases the Parliament has received incorrect information. Defense Minister Jakob Ellemann-Jensen has today apologized to the Danish Parliament and also sees the need for an impartial investigation into the matter.
Defense Minister Jakob Ellemann-Jensen has today briefed the Defense Conciliation Circle and the Finance Committee on the Elbit case. Statements from both the Ministry of Defense and the Ministry of Defence’s Material and Procurement Agency (FMI) show that mistakes were made and that the Folketing received incorrect information in four areas in particular.
From the documents, it appeared erroneously that the contract with the supplier had to be signed before the end of January in order for the offer to be valid.
The Danish Parliament was not adequately informed that FMI did not make renewed contact with all potential suppliers for reasons of time.
The conciliation circle was given the false impression that the Norwegian Defense Forces would make an ATMOS artillery system – a so-called demonstrator – available in the spring of 2023.
The Folketing was not informed that in early January a settlement was reached between FMI and Elbit in a lawsuit from 2020.
“Mistakes have been made in this process. I have apologized to the Parliament for that today, just as I have apologized for the process surrounding the urgent processing of the documents. Unfortunately, the statements show that the Parliament has received incorrect information in several cases. This is information that I have received from my ministry and that I have passed on. It is criticizable. I take that very seriously”, says Defense Minister Jakob Ellemann-Jensen.
The statements show that the wording in the documents that were sent to the Finance Committee on 26 January is incorrect. From the documents it appears that “The document is urgent, as the contract with the supplier must be signed as soon as possible and before the end of January for reasons of the validity of the offer, production possibilities and a rapid build-up of the operational capacity.”
This wording created the impression that the offer would expire at the end of January, when in reality the deadline was about ensuring the fastest possible delivery of the new systems.
Still unsettled questions
Another element of the criticism raised has been the nature of the market hedging that FMI carried out, including whether the Danish Parliament was informed that, for reasons of time, contact was not made with all potential suppliers.
FMI states that the department was “unfortunately not precise in the formulation of when and how the information on possibilities for the delivery of artillery systems from Nexter Systems was provided. It thus appears from the materiel professional assessment that informal inquiries were made to three relevant suppliers, including Nexter Systems. However, that was not the case for Nexter Systems”.
The conciliation circle was also given the false impression that the Norwegian Armed Forces would be provided with an ATMOS artillery system – a so-called demonstrator – in the spring of 2023. At the time, this was one of the arguments for acquiring ATMOS, but due to misunderstandings about the place of delivery and – time, the demonstrator only arrived in Denmark last week.
In addition, the Folketing was not informed that at the beginning of January a settlement was reached between FMI and Elbit in a lawsuit from 2020. FMI emphasizes in the statement that there is no connection with the subsequent conclusion of the contract, but neither the department nor the Minister of Defense is seen at the time time to be informed that the settlement was reached, which FMI has confirmed.
“Overall, it has been a critical process. Mistakes have been made, and I have therefore emphasized that concrete steps are taken so that we do not experience such a process again. I still have a number of questions about both FMI’s market hedging and the lack of information from the department about the settlement with Elbit. I have therefore proposed to the settlement parties that an impartial investigation be carried out, so that we can clarify the questions that remain,” says Jakob Ellemann-Jensen. (defense-aerospace.com EDITOR’S NOTE: Danish Defence Minister Jacob Ellemann-Jensen dismissed his ministry’s permanent secretary of state on Friday after criticism over the handling of an artillery arms purchase from Israel, Reuters reported August 11.
In fact, defense minister Jakob Ellemann-Jensen has been on long-term leave since February 7, and the decision to award the contract to Elbit was taken in his absence by the acting minister, Troels Lund Poulsen. Elleman-Jensen cleaned up when he returned on July 31.) (Unofficial translation by Defense-Aerospace.com) (Source: https://www.defense-aerospace.com/ Denmark Ministry of Defence)
15 Aug 23 UK: Leaked personal data poses major security threat to police in Northern Ireland. On 14 August, Chief Constable Simon Bryne stated he was confident that dissident republicans obtained leaked data on Police Service of Northern Ireland (PSNI) officers. The data, mistakenly leaked on 8 August, includes the surnames and first initials of around 10,000 officers, as well as their rank and unit. The posting of a redacted version of the data leak outside a Sinn Féin office in Belfast indicates the data has since been obtained by dissidents. The development poses a major physical security risk for PSNI officers, given they are considered ‘legitimate’ targets of attack by dissident republican terrorist groups. The official terror threat level in Northern Ireland is already ‘severe’ (an attack is highly likely) following an uptick in dissident republican activity in early 2023. Beyond the immediate security implications, the leak will possibly undermine PSNI recruitment efforts and result in employees quitting the service, posing longer-term organisational challenges. In the very near term, efforts by dissident republicans to intimidate PSNI officers will highly likely increase and tensions will remain especially elevated in Derry/Londonderry and County Tyrone. (Source: Sibylline)
15 Aug 23. Germany: Attack on AfD member points to elevated risk of violence ahead of Bavarian election. On 14 August, reports emerged that the Alternative for Germany (AfD) leader in Augsburg (Bavaria state), Andreas Jurca, was seriously injured in a politically motivated attack on 13 August. Jurca has since claimed the attack was carried out by migrants. The police are currently investigating the attack on suspicion of dangerous bodily harm. The attack comes after the far-left extremist Antifa movement disclosed personal details of AfD candidates for the upcoming Hesse state elections on 8 October, leading to heightened security concerns among its members. It also comes amid a surge in support for the AfD in national and regional polls. The divisive nature of rhetoric espoused by AfD members will likely drive polarisation. With the Bavarian state election taking place in October, there is a realistic possibility of an uptick in politically motivated attacks, driving physical security risks for public officials and protesters. (Source: Sibylline)
14 Aug 23. Bosnia and Herzegovina: Live-streamed gun attack signals increasing gender-based violence. On 12 August, a gunman from Gradačac (Tuzla canton) killed three people and wounded several others before taking his own life. For a short time, a state of emergency was issued in Gradačac and special forces were deployed in both Bosnia and Herzegovina (BiH) and nearby Croatia. The attack fits a wider trend of gender-based violence in BiH, with 60 women murdered since 2016, eight in 2022 alone. It also follows two mass shootings in quick succession in neighbouring Serbia earlier in 2023, which led to ongoing anti-government protests in that country. However, the live streaming of the attack is a new technique in the Western Balkans, seemingly inspired by right-wing terrorist attacks such as the 2019 Christchurch shooting. The video has appeared to have been taken offline and the authorities are prosecuting people that have expressed sympathy for the attack. There is a realistic possibility of protests in response to the shooting, though these would almost certainly remain peaceful. (Source: Sibylline)
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