Articles in category Defence Industry

The companies working for the defence industry going bankrupt appears inevitable in the context of Romania’s accession to the European Union, despite Romania being a NATO member, therefore...

The Romanian Ministry of Economy sold all 100% of the armament factory Uzina Mecanica Filiasi for 5 million RON, the equivalent of 1.4 million Euros, to the Retrom...

In past years, Romania has modernized PUMA helicopters for the Emirates military and MIG 21 airplanes for Croatia. Romania has also delivered weapons and munitions to Iraq. The...

Romania's defence industry will certainly be partially privatised as of January 1, 2007, and what will be left under the state ownership will be smaller yet more flexible...

Simultec, an Elbit Systems Ltd company yesterday announced that it has delivered to the U.S. State Department two Full Mission/Full Motion Simulators for Mi24 and Mi8 helicopters, following an USD 7.5M contract. An official acceptance was done and signed by the U.S. State Department representative.
Elbit Systems’ advanced simulators will be used to train helicopter pilots and co-pilots in Uzbekistan, as part of a high-priority project to enhance border security and ensure continued support to Operation Enduring Freedom. The contract was performed over a two-year period.

The Full Mission Simulator provides training that covers every aspect of the helicopter’s routine, emergency and mission operations for diverse scenarios. It includes the simulation of a variety of flight conditions and tactical environment preparedness. The high-end Full Motion Simulator, built on a moving structure, simulates the feeling of flight under various conditions, providing pilots with a realistic flight experience. Turbulence and various flight conditions, as well as aural cues, are simulated in order to maximize realism and minimize the transition to complex, actual missions.

“ It’s a result of a very intensive cooperation between US Department of State, Israeli and Romanian companies and is a significant contribution to offset obligation between Elbit Systems and Romania. We have win this contract following an international bid, in which we beated Lookhed Martin!”, proudly said Constantin Olivotto, General Manager of Simultec In his turn, Jacob Rimon, Vice President of Simulation and Training of Elbit Systems commented: “In order to provide our customer an advanced training solution The MI-8 and Mi-24 Simulators have been developed using our extensive experience in Simulator’s technology and methodology.

Simultec is a wholly-owned subsidiary of Elbit Systems in Romania. It manufactures training systems and flight simulators for the Romanian Ministry of Defense. Elbit Systems Ltd. is an international defense electronics company engaged in a wide range of defense-related programs throughout the world, in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence, surveillance and reconnaissance (“C4ISR”), advanced electro-optic and space technologies. The company focuses on the upgrading of existing military platforms and developing new technologies for defence and homeland security applications. by Mihai George

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Romania's current legislation dealing with public procurement, public-private partnerships (PPPs) and concessions is in the process of being modified (all of these to be included in one law), especially since these are some of the major problems areas identified by the European Union in its recent country report.  The previous rules also had to be modified in light of the new EU directives dealing with public procurement (Directives 2004/17/EC & 2004/18/EC).  At the same time, relating to defense procurement, the acquisition of military hardware is generally exempted across the EU from these directives, as such acquisitions are made on the basis of the relevant national laws (this exemption is based on Article 296 of the EU Treaty), which as resulted in a fragmented system across the EU.  Nonetheless, according to European Court of Justice case law, Article 296 does not permit an automatic exemption for all defense procurement, but in practice, most national authorities make extensive use of the exemption. 
But things will change soon enough, since the EU commenced an official Consultation in 2004 regarding defense procurement, with the result being the publishing of a green paper in September 2004 that recognized certain short-comings of the current system ("This fragmentation poses a major problem for all Member States with defense industries ... [ which ] increases the cost to the taxpayer and damages ... the competitiveness of the European defense industry ....", p. 5) and the need to make the acquisition process transparent and open to non-national players.  In addition, the European Defense Agency (EDA) was set up in 2004, which on November 21, 2005 issued a Code of Conduct relating to Defense Procurement (<http://www.eda.eu.int/news/2005-11-21-1.htm>), with the stated main objectives of this Code of Conduct being, " ... to encourage competition in the European defense equipment market, where contracts are currently exempt from normal EU internal market rules."  In fact, at a meeting of the EDA's Steering Board, EU Defense Ministers decided that the new Code of Conduct would cover contracts worth more than EUR 1 million and would take effect from July 1, 2006.
Practically, this means that Romania's new public procurement legislation, which is intended to come into effect on June 1, 2005, should make specific mention of the EDA's Code of Conduct with respect to defense procurement.  This would be "proactive" behavior which I am quite certain would be highly appreciated by the EU Commission and EU Parliament, especially considering the upcoming EU entry evaluation in April/May 2006 as well as the official decision as to whether Romania will join the EU in 2007 or 2008.  Let us not forget that Romania, within the upcoming three to five years, will also purchase up to 50 jet fighters (meaning a budget expenditure of between EUR 2 to 3 billion), so all defense procurement should be carried out in the most transparent way possible (the last thing that Romania needs is yet another scandal).  In short, Romania needs to show and in fact prove that it belongs to the European Union, meaning that it needs to start evidencing (through actions, not words) that it accepts the implementation of certain fundamental principles ... such as transparency.  In addition, Romania has no local jet fighter industry to protect, so ensuring that its impending acquisition of the jet fighters is carried out through a transparent procedure will be a win-win situation (taxpayers will pay a better price, not to mention that an open procedure should avoid major scandals).  Getting back to the Code of Conduct, the EDA has officially stated that, "[a]ll relevant new defense procurement opportunities will be published on a single online portal operated by the EDA. Fair and equal treatment of all companies will be assured through evaluation of the offers on the basis of transparent and objective standards. The fundamental criterion for the selection of the contractor will be the most economically advantageous solution for a particular requirement, taking into account, among other things, considerations such as compliance, costs (both acquisition and life cycle), and security of supply."  Consequently, current decision makers should ensure that the new public procurement legislation will include language which specifies that defense procurement will be carried out pursuant to the EDA's Code of Conduct.  This is very important, especially since it is expected that the EU (arising from the official Consultation and related questionnaire) will issue an interpretative Communication and approve a Directive on defense procurement in the not-so-distant future (which should be similar in substance to the Code of Conduct).  What is very clear is that Romanian decision-makers need to do as much as possible in the next four months to ensure that Romania is welcomed into the EU in 2007, and consequently the inclusion of such language into the new public procurement law which would ensure defense procurement transparency would be a huge step forward.  And let us not forget that once Romania does join the EU, it will be a member of the EDA and thus should abide by this Code of Conduct (so really no reason at all to wait to implement this code).

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Israeli companies have made something of a specialty of refurbishing older Western fighters and even Soviet fighters with modern Western avionics and Israeli weapons like the Python air-air missile, giving the systems new life. India's refurbished MiG-21 'Bisons' provide one example, and a similar effort was undertaken to create Romania's MiG-21 'Lancers'. Now rumour has it that the success of these efforts has led to a more ambitious deal.

The former Administration Minister Marian Saniuta said the contract signed with the EADS was never subject to question

The border security contract, signed in 2004, was directly negotiated with a single source, skipping tendering procedures and was worth 650 million euros, with an option to sub-contract supplementary works totaling 350 million euros.
The former minister of Administration and Interior (MAI), Marian Saniuta, stated that the 2004 border security contract signed with EADS was never questioned although it was never nor it is a masterpiece. The EADS contract was supposed to secure Romania's borders with the neighboring countries in view of the country's European Union accession in 2007. The current government has criticized the EADS contract, saying it costs too much, duplicates existing PHARE programs and employs outdated technology and standards. At the end of October, the European Commission expressed its concerns over Romania's capacity to finance the management of the future EU border, underlining the importance both of acquiring reliable frontier protection equipment and maintaining it. The European body included its concerns in the country report, in Chapter 24 - Justice and Internal Affairs.
According to Saniuta, the Social Democrat government created a joint group between ministries and special services in 2001 for the integrated management of the state border. This decided in 2004 to begin negotiations with EADS. The former MAI minister stated that authorities chose to negotiate with a single source, without a tendering procedure, adding that this method was perfectly legal.

On the price of the contract, Saniuta stated that the feasibility study set a price range of 680 to 800 million euros, and the German company EADS made an offer of 692 million euros, which was later negotiated down to 650 million euros.
"Any commercial relationship implies negotiation, and re-negotiation, but there is a long way to one billion euros," added Saniunta denying the allegations that there was an additional clause for subcontracted works worth 350 million euros. "It is time to stop the disinformation campaign," said the former minister.

Saniuta admitted that the EADS project involved duplication with existing European programs for the Danube, Danube Delta and the Black Sea surveillance systems, as well as radio communication systems in three counties. However he denied that the costs were as high as the government claims, instead quoting a figure of 60 million euros, which he said would not be wasted. "The money would not be lost, but redirected to equipment, aerial, naval and even ground mobility," Saniuta explained. "It would not be the first time in Romania when charts are changed," he added.
According to the minister of Administration, Vasile Blaga, eliminating the duplication would allow Romania to use an extra 450 million euros in PHARE and Schengen funds.
"The contract was legal, worth 650 million euros and could not be exceeded due to the government decision 1157 which regulates Romania's loan methods," concluded Saniuta.

Referring to the technology, Saniuta pointed out that there are two systems in use in Europe: Tetra and TetraPol. Romania currently uses a communication network operating the Phoenix system, which is based on the TetraPol standard, employed by other European countries such as France, Switzerland or the Czech Republic.

Following renegotiations, the authorities and EADS agreed to eliminate all the provisions which duplicated European programs and decrease the contract's value to 542 million euros. Other results of the negotiations include an extended warranty period, from 12 to 18 months, and a faster response time for malfunctions, between four and 72 hours, depending on the affected part and its priority for the overall system.

Saniuta appreciated the new provisions, but pointed out that the government will pay a price, as it has agreed to grant exclusive post-warranty to EADS. Consequently, for first ten years after the warranty period is over, Romania can acquire parts only from EADS.

Under the contract's stipulations, EADS will install high-tech surveillance equipment at borders (infrared TV cameras and sensors, IT equipment etc), create command and control centers, and equip over 180 headquarters and training centers for the Romanian Border Police.

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Romanian and Greek naval forces will mutually send cadets to study in the other's country Naval Academy, sources of Romania's Naval Forces Staff said on Tuesday. The decision was made during official talks between a delegation headed by Greek Chief of the Navy Staff, Admiral Dimitrios Gousis and his Romanian counterpart, Counter-Admiral Gheorghe Marin.

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The Israeli firm Elbit wants to launch in the Romanian market a plane without pilot which can investigate enemy territory before an attack of special forces. Present at the international exhibition for military technology Expomil 2005, the representatives of the firm told Act Media Agency that they were negotiating with the Romanian party for the technology transferred involved in manufacturing such a plane.

The production of the plane can begin a month after the transfer, the parts of the plane being made in Romania. The plane weighs 4.5 kg, can be launched manually and has a flight autonomy of an hour and a half. The plane has a spy camera which scans the surrounding area , transferring the information obtained on a ground monitor.

The main object of activity of Elbit company is digital communication systems. Elbit systems are similar to those used in civil applications for disaster management, which a real advantage. At Expomil 2005 the Israeli firm presented several automatic detection systems. At the same time, Elibit, initially involved in modernizing four IAR 99 Falcon is now hired for 8 other similar planes which will equip the Romanian Air force.

and security equipment

The Israeli firm PIMA presented on Monday, at a workshop organized by the Romanian Association of Security Industry, security equipment and solutions, called the user friendly alarm system. The main characteristic of these systems is their simple use by a wide range of persons. “At present, systems existing in the market are too specialized for common mortals”, the director of ARIS, Gabriel Mihai Badea told Act Media. In his opinion, the solutions offered by PIMA are among the best in point of easy use. PIMA has been in the Israeli market for 15 years, its main activity being manufacturing and distributing security equipment. The firm offers alarm systems to countries such as France, Italy, Great Britain, Poland, South America and Scandinavia.

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