On December 19 the Government of the Republic of Lithuania agreed to the plans of the Ministry of National Defence to build three new military bases over the next several years through Public-Private Partnership (PPP).
This is going to be the first time a National Defence System procurement is conducted by the PPP method.
“With this complex and long-term project the Ministry of National Defence begins a completely new stage of development of Lithuanian Armed Forces infrastructure. It is a strategic MoD project which will result in a totally new military infrastructure for three battalion-sized units of the Lithuanian Armed Forces over the next several years,” Minister of National Defence Raimundas Karoblis says.
The invitation to tender will seek to attract not only the strongest Lithuanian enterprises but also real estate developers and investors from abroad.
The invitation to tender for all three objects will be announced in early 2019 and contracts with investors will be signed in late 2020. In total, the value of direct investment into all three projects may amount to roughly EUR 126 million.
The partnership contracts will be signed for the period of 15 years, until 2035, roughly two years and a half will be allowed for developing infrastructure, and the investors will have it under their supervision for the remaining roughly 12.5 years.
Private entities will be investing their own financial resources as part of the PPP projects into the infrastructure generated for the state for military functions and will take on the risks arising from construction works and operation of the new infrastructure.
Duke Margiris Infantry Battalion of the Motorised Infantry Brigade Griffin will be based in the town of Šiauliai, Pajūris town of Šilalė district will host Brigadier General Motiejus Pečiulionis Artillery Battalion of MIB Griffin, and one of the present Mechanised Infantry Brigade Iron Wolf battalions will be based in Rokantiškės village in Vilnius district. All the three military facilities will have barracks, canteens, welfare, medical, equipment maintenance facilities, and other services a military infrastructure requires. The three bases will accommodate approximately 3 thousand soldiers.
At the moment all of the armed forces units are based in former military territories and buildings, the majority of which have been left behind by the Soviet Army.
“While the three new military installations will be a greenfield development, i.e., all infrastructure required by a battalion-sized unit will be designed anew to purposefully match the needs of a modern armed forces,” Vice Minister of National Defence Giedrimas Jeglinskas said.
It was decided to implement the new military infrastructure development projects through PPP in order to avail not only of the capacity of private sector to execute several large-scale projects at the same time, but also with regard to the fact that the National Defence System required large investment over the next 2-3 years.
“We will use the PPP method to implement these strategic Lithuanian Armed Forces infrastructure development projects in order to achieve three main objectives: to generate quality durable infrastructure, to meet the set deadlines, and not to exceed the cost limits. We can only achieve it if we stimulate competition among both, contractors and investors. The scale of the project is sufficient to be appealing for foreign partners, therefore we will seek as great an involvement of theirs as possible,” Vice Minister of National Defence G. Jeglinskas said.
The infrastructure development projects are intended to facilitate private partners’ sharing of professional expertise and management skills, innovative approach, better efficiency and productivity in the development of infrastructure of the planned scope.
The new military infrastructure is developed as a priority activity on the Government of the Republic of Lithuania Programme for the National Defence System aimed at developing the Lithuanian Armed Forces – increasing Lithuania’s combat capabilities, ensuring physical infrastructure for permanently deploying the increased combat capabilities of the Lithuanian Armed Forces.
The Ministry of Defence presented the project at a conference-public consultations in late October. Such event will also be held early next year.