The activities of the State Defence Corporation are financed from the State budget allocated for defense. To date, EUR 1.6 million has already been paid into its share capital, which is to be used, inter alia, to finance the administrative resources of the corporation, such as the recruitment and employment of the Board and staff, office administrative costs, travel, the purchase of fixed assets and other needs.
"According to publicly available information, a tender for the purchase of passenger cars for the State Defence Corporation has just been launched, with one of the cars planned to be electric. One tenderer participated in the tender and, if approved by the Ministry of Defense, it will cost the State a total of EUR 180,000. The conduct and results of this tender do not show that the activities of the corporation are directed towards the originally planned integration into the supply system of the National Armed Forces," said Gatis Litvins, Member of the Council of the State Audit Office.
The State Audit Office calls on the Ministry of Defense to strengthen the governance principles of the State Defence Corporation so that the state budget funds allocated to it are primarily used for the needs of the defence sector, ensuring internal and external security, and not for the needs of the administration of the capital corporation, which should not be given priority at the moment.
The Cabinet of Ministers has recognized national security as a top priority, with significant financial resources earmarked for defense spending. This year, it is planned at €1.3 billion, with further increases in the coming years, reaching €1.8 billion in 2027. An increase in the defense budget does not in itself represent an increase in national defense capabilities. It is influenced by several factors, one of which is the readiness of the defense industry to provide the armed forces with the necessary goods and services, the State Audit Office noted.
State Defence Corporation, LLC (SDC) (SIA “Valsts aizsardzības korporācija”) is a limited liability company whose aim is to support the long-term development of the national military industry in Latvia. It is fully owned by the Ministry of Defense.
