Nicholas Watson in Prague -
The Czech Republic on September 30 announced it would hold an international tender for a new radar system to replace its obsolete Soviet system, abandoning heavily criticised plans to try to build its own system with other Central European partners.
The project for a Mobile Air Defence Radar (MADR) had taken on greater urgency given justifiable worries by the so-called Visegrad Group (V4) – Poland, Hungary and the Czech and Slovak Republics – about an increasingly assertive Russia. However, an idea first mooted back in June by the V4 to build their own system rather than purchase an off-the-shelf system from the likes of Saab, Thales, Selex or Raytheon had caused consternation within defence circles, which feared that such a strategic initiative was being used as a means to prop up the local defence industry rather than promote regional security.
In the statement, the Czech defence ministry said: "[it] has decided to acquire a three-dimensional Mobile Air Defence Radar (MADR) capability through an international competitive bidding process... In the first phase till 2017, the requirement is for five 3D radars to replace the obsolete Soviet design technology still in the inventory. The envisioned lead time is 18-24 months from contract signature. To that effect, the Ministry will soon prepare an international tender. The value of the acquisition is expected to oscillate between CZK1.5-1.7 billion."
The Czech MoD essentially acknowledged what defence insiders had being saying all along: namely, that such a complex system could not be built within the short timeframe available.
Said Saab in a statement on September 21: "We launched our next generation air defence radar system at the beginning of 2014 after more than 5 years of development, within a similar timeframe as some of our international competitors. With the utmost respect to the great expertise and skill of the local industry, we are afraid it is not realistic to produce such a sophisticated system considerably faster, as the need of V4 armed forces demand."
Signs that the pan-regional plan to build their own radar system was in trouble had been building in the leadup to the Czech announcement.
On September 14, the Financial Times reported that Poland, the regional leader with the largest defence industry and most aggressive posture towards Russia, had decided to pull out of the project, after concluding that the other members of the V4 had little to contribute to the modernisation of its military and defence industry.
A spokesman for the Polish defence ministry denied to the FT that the country had pulled out of the project, saying discussions were a “work in progress."
Without the Poles involved, insiders said the Czech defence industry would not be able to handle the project – Slovakia and Hungary have little in the way of defence companies – within the time constraints, and costs would inevitably spiral. Given that the radar market is already overcrowded with prices to match, any domestic solution would be far more expensive.
For this reason it would also be uneconomic. Defence sources say that in order for the project to be economically feasible, the V4 consortium building it would need to sell a lot more of its radar system than what could be absorbed by just the V4 countries. Given that the orders from the four countries would only amount to 17 radars worth about €300m, the consortium must sell more globally into what one industry insider calls an already "saturated" radar market. "The likelihood of finding a customer outside the V4 is not realistic," says one industry insider. "What might be a politically attractive project for V4 would be extremely expensive and difficult to maintain."
Critics of the project also point out that local industry would in any case benefit if open tenders were held by the countries in question. This is because such defence projects inevitably contain what are called offset programmes, whereby local industry is involved in the delivery and maintenance of the project. For example, Saab's offset programme for the Czech Republic's leasing of 14 Gripen fighter aircraft provided almost €1bn of work to the broader local economy over a 10-year period.
Such a point was tacitly acknowledeged in the Czech defence ministry's statement September 30. "With a view to the centrality of the order for national defence, the supplier will be required to be solidly embedded in the Czech Republic; the Ministry will therefore insist on engaging the domestic defence industry," it said.
Disconcertingly for the Central European governments, this is another example of a failed attempt at a pan-regional project. Such regional efforts have a poor history: for example, a project to build a new nuclear plant in Lithuania between the three Baltic countries and Poland has fallen apart; and since it achieved its initial goal of getting the four countries into the EU in 2004, the V4 has attempted to foster cooperation in cultural and security matters, but has to date singularly failed to deliver anything in the way of the latter.
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