UK arms industry giant falls short on commitment to Latvian partners

When Latvia began realizing one its most ambitious army plans a few years ago – further mechanization of the Land Force Mechanized Infantry Brigade – at the same time it set another goal to involve more local suppliers in defense procurement contracts.

Plans even specified that around one third of the contract volume must be based on the capabilities of Latvian companies. However, in reality it seems a UK arms industry giant with a lucrative Latvian contract doesn't seem to be in a hurry to make use of local business capacity according to Latvian Television's De Facto broadcast on November 3.

The decision to involve local businesses to a greater extent is aimed at decreasing dependence on foreign suppliers during a possible crisis, as well as stimulating the local economy.

Former Defense Minister Raimonds Bergmanis explained: “These are our guidelines for all further development plans, in this way we are further developing our military industrial complex.”

The cost of buying 123 used CVR(T), or Alvis Combat Vehicle Reconnaissance (Tracked) armored vehicles had a basic purchase price agreed in 2012 of €50 million, rising to more than €250 million after they had been upgraded and fully equipped. BAE Systems, the seller, also had the contract to modernize Latvia's vehicles.

The first refurbished armored vehicles were delivered to Latvia by UK-based BAE Systems four years ago, as reported by LSM at the time, and the last ones will arrive next year. For the hundred already delivered, it was discovered that there was an issue with one of the refurbished components, which had to be repaired to avoid accidents, De Facto said.

Daily maintenance for the vehicles is carried out locally, but more serious repairs are still being carried out by the UK company.

“Of course that doesn't mean days, it means weeks. The logistics chain is clear, we know how we send these components for repair, and we've already received back the previously sent components,” said Combat Service Support Battalion Commander Major Andžejs Zarakovskis.

The contract stated that BAE Systems must provide highest-level repair services in Latvia by the end of 2016. After a prolonged evaluation a contract was signed with “Zemgale Repair Service” (Zemgales Remontu Centrs) in 2018. However, the company's Finance Director Ivars Ozoliņš told De Facto that currently practically no repairs are being carried out on armoured vehicles.

“Five years ago we began a dialogue with BAE Systems to determine potential partners, but we still don't have a clear understanding of the format and type of cooperation. The Ministry of Defense has been tolerant for long enough," said Federation of Security and Defence Industries of Latvia Board (FDSI Latvia) Chair Elīna Egle.

It's now clear that BAE Systems must fulfil their promise, or sanction procedures must be implemented,” Egle added.

BAE Systems has undergone some internal changes, creating a joint venture with Rheinmetall to form Rheinmetall BAE Systems Land (RBSL).

RBSL says they are continuing cooperation with the Latvian Ministry of Defense and FDSI Latvia to create the opportunity to perform vehicle maintenance locally.

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