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Government Approves Purchase of 246 Infantry Fighting Vehicles

(Source: Czech Ministry of Defense; issued May 24, 2023)
(Unofficial translation by Defense-Aerospace.com)
The Czech Ministry of Defence on Wednesday signed a contract to procure 246 BAE Hägglunds CV90 tracked infantry combat vehicles. The deal is worth €2.51 billion according to the Czech government, $2.2 billion according to BAE Systems and $2.05 billion according to the Swedish government. (BAE photo)

PRAGUE --- The government has approved the purchase of 246 Swedish CV90 infantry fighting vehicles for 59.7 billion crowns (€2.53 billion--Ed.), and the contract with the Swedish side was signed on the same day by Lubor Koudelka, chief director of the Armaments Section.

The Ministry of Defense, under the leadership of Jana Černochová, negotiated the purchase of combat vehicles in less than a year after the department's management decided to cancel the original tender.

Nine years after the decision to implement the purchase of this equipment necessary to fulfill the key alliance commitment, which is to build a heavy ground brigade by 2026, we are now entering the implementation phase. We are procuring equipment that meets the requirements of the Army of the Czech Republic, and the contract also ensures at least a 40% share of the Czech defense industry in this contract.

"The acquisition of infantry fighting vehicles is an important milestone for the construction of a heavy brigade, as well as for the modernization of the army and the strengthening of our defense capabilities," said Defense Minister Jana Černochová.

The previous governments did not fulfill this commitment in the past two electoral terms, despite all the proclamations. The original selection procedure ended in failure in 2021. All bidders whose bids were rejected by the previous management of the department did not accept the amendments to the tender conditions recommended by the legal analysis commissioned by Minister Černochová, so the order had to be cancelled.

Therefore, last summer, the government instructed the Minister of Defense to negotiate directly with the government of the Kingdom of Sweden regarding the acquisition of CV90 infantry fighting vehicles. This vehicle was chosen because it is the only combat-tested one, is used in a number of European countries and meets the requirements of the Army of the Czech Republic.

The Czech Republic will buy 246 CV90 units from Sweden, including 29 workshop vehicles, training, spare parts and other accessories for a total of approximately 59.7 billion crowns including VAT (approx. 49.3 billion CZK without VAT).

The army originally requested 210 units and the possibility of an option for another 36 units in the future, but in the end it was decided to purchase all 246 units.

"In the past, with other technology, it turned out that it was necessary to have sufficient stock. In addition, the prices of combat equipment are constantly rising due to the poor security situation, which is why we decided to take advantage of the advantageous Swedish offer, which preserves the original unit price, immediately," explained Lubor Koudelka, senior director of the Armaments and Acquisitions Section of the Ministry of Defense.

The price was also maintained thanks to a coordinated procedure with Slovakia, which also procures these vehicles for its army.

"With today's signing of the contract, we welcome the Czech Republic to the growing family of CV90 infantry fighting vehicle users. It is a vehicle built for harsh conditions and demanding terrain, which has also been tested directly in combat as part of international missions. The inclusion of this high-end, Swedish-developed vehicle in the arsenal will lead not only to the strengthening of the Czech army, but also to the strengthening of NATO as a whole," said Pal Jonson, Swedish Minister of Defense.

The contract also contains a commitment from the Swedish side that the Czech defense industry will contribute at least 40% of the contract's value, and in case of non-compliance sanctions would follow. For Czech companies, this means not only the opportunity to cooperate on vehicles for the Czech army, but also, after an agreement with the manufacturer, likely involvement in future contracts for other European countries.

The Swedish manufacturer BAE Systems-Hägglunds is responsible for the involvement of Czech companies, which, even before signing the contract with the Czech government, signed contracts with the main Czech subcontractors - the state-owned company VOP CZ, VR Group as (owned by the state-owned company LOM PRAHA) and the companies Excalibur Army, Meopta and Ray Service.

Approximately 30 Czech companies should cooperate on the contract, and their expected share of the total value of the contract during its implementation will significantly exceed the "obligatory" 40%.

A number of questions have been raised in the past by the involvement of the state-owned company VOP CZ and the amount of its share in the contract, specifically the way in which, according to the contract, its share is included in the total share of Czech industry.

Transactions for VOP or other state-owned enterprises are considered more creditable in some aspects, because it is a state-owned enterprise that, in accordance with the Strategy for armaments and support for the development of the defense industry in the Czech Republic until 2030, has a key position in terms of ensuring the security of supplies within the life cycle military equipment.

The conflict in Ukraine has shown that having companies with these capabilities on its territory and under the control of the state is a fundamental strategic advantage that determines the ability to defend one's own territory.

The contractual assurance of the entire contract is specific, two contracts were concluded: First, a bilateral contract between the Czech Republic and the Kingdom of Sweden represented by the Swedish armaments agency FMV, which regulates aspects of civil and military cooperation in relation to the purchased infantry fighting vehicles, and ensures deep cooperation between the Czech Republic and Sweden for decades.

Secondly, a tripartite agreement between the Ministry of Defense of the Czech Republic, the Swedish agency FMV and the company BAE Systems Hägglunds, as the vehicle manufacturer, the subject of this agreement is the very acquisition of CV90 vehicles.

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The Czech Republic Acquires 246 Combat Vehicles 90 from Sweden

STOCKHOLM --- The Czech government decided on May 24 to sign an agreement covering 246 CV90 MkIVs at an order value of approximately SEK 22 billion ($2.05 billion--Ed.) from BAE Systems Hägglunds in Örnsköldsvik.

“I am convinced that combat vehicle 90 is the right choice for the Czech Republic as well. The Czech Republic's acquisition opens up further cooperation in the field of defense between Sweden and the Czech Republic in accordance with the bilateral agreement previously signed between the countries. I look forward with confidence to the deepened cooperation in the field of combat vehicles. It will also be of great benefit to the Swedish Armed Forces,” says Defense Minister Pål Jonson.

More agreements are signed

The deal is carried out in an intergovernmental arrangement where an overall declaration of intent on cooperation in the field of combat vehicles has previously been signed between the Czech Republic, the Defense Materiel Administration (FMV) and BAE Hägglunds.

Furthermore, an intergovernmental agreement has been signed by Försvarets materielverk (FMV) regarding, among other things, support during the delivery phase as well as exchange of experience and cooperation regarding training, use, operation and continued development of the Combat Vehicle 90 system.

Since 2002, there has been a bilateral Memorandum of Understanding, MoU, with the Czech Republic on cooperation in the field of defense (SÖ 2004:50).

The agreements concerning delivery and intergovernmental cooperation of the CV90 were signed by the Czech Republic, FMV and BAE Systems Hägglunds on 24 May.

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Czech Republic Awards BAE Systems $2.2 Billion Contract to Acquire 246 CV90s

The Czech Republic has successfully completed negotiations with the government of Sweden, the Swedish defense procurement organization FMV, and BAE Systems Hägglunds to buy 246 CV90 MkIV infantry fighting vehicles in seven different variants.

The contract is valued at SEK 22 billion ($2.2 billion)(actually $2.05 billion at today's exchange rate--Ed.) The agreement provides highly-capable vehicles for Czech soldiers while providing Czech industry a significant role in the program.

“As the ninth member of the CV90 User Group, the Czech Republic and its Army will benefit from this combat-proven infantry fighting vehicle with a leading combination of mobility, firepower, protection, and future growth potential,” said Tommy Gustafsson-Rask, managing director of BAE Systems Hägglunds, in Örnsköldsvik, Sweden. “This contract also represents a significant win for Czech industry that will last for decades.”

The CV90s will be developed and delivered through an industrial partnership with Czech industry to meet the requirements of the Czech Ministry of Defence and the intention of maintaining national sovereignty for the Czech Republic. The Czech industrial partners will be delivering 40% of the acquisition’s value in development, production and assembly contracts, not including VAT.

The program also offers future industrial opportunities that represent significant monetary value well beyond the flow down of contracts to Czech industrial partners. The contract will bolster the local defence sector, granting access to BAE Systems’ global supply chain, expanding opportunities for cooperation, and enhancing local competitiveness.

The CV90 MkIV, the latest generation of the leading infantry fighting vehicle, is an ideal, battle-proven vehicle. CV90 has been deployed around the world in coalition operations under both NATO and UN mandates. The vehicle offers superior tactical and strategic capabilities to target a wide range of ground and airborne targets, and exceptional resilience in any terrain and tactical environment.

BAE Systems Hägglunds has produced more than 1,400 CV90s in 17 variants for European countries, five of which are NATO members. Slovakia recently selected the CV90 for its armed forces, joining the Czech Republic as the eigth and ninth member countries, respectively, of the CV90 User Group.

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