Czechs claim victory in dog fight with Sweden

By bne IntelliNews December 4, 2012

bne -

Czech Defence Minister Alexandr Vondra claimed victory in the long-running argument with Sweden over extending the lease of 14 Gripen fighter jets on December 3, insisting that Stockholm has now agreed to lower the price due to threats that Prague could look elsewhere for the planes.

"The current offer is much more advantageous than the original one," Vondra told Lidove Noviny, according to Reuters. "The price was reduced by roughly CZK1bn [€40m]," he claimed. However, following a cabinet meeting later in the day, Vondra appeared more circumspect, saying only that the government would study the improved offer.

"The Swedish side has offered much better terms [than in the summer]. The offer is 10% better," Vondra told a news conference. The new offer stands until the end of March 2013, he added. "We have some time... to consider this offer very thoroughly."

The Swedes won the original 10-year contract to supply the aircraft following a hard fought battle with competitors. With the Czechs joining Nato in 1999, the talk in Prague at the start of the decade was of companies and embassies lavishing parties and favours upon Czech decision-makers, as six companies waged a war to supply aircraft to replace the country's Russian-made fleet of MiGs. The Czechs eventually plumped for a lease on the Gripens at a cost of around CZK20bn (€792m) in 2004.

This time around, with Prague pushing hard for a deep discount to extend the contract as it struggles to make ends meet, the tussle has been far more mundane by all accounts. Lidove Noviny claims that Vondra's words suggest the new price for a 10-year extension must have been pitched at or around CZK14bn. The Swedes first offered the deal at CZK15bn.

The Czech government is seeking to extend the lease by several years pending a decision on the long-term future of its air force. Prime Minister Petr Necas spent the summer pressuring Sweden, threatening to prepare a tender to pick a different supplier unless the supplier were to improve its offer by November.

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