Categories  Merging & Acquisition Policy

Bulgaria to Spend 1 Billion € on Mil Equipment

 

Bulgarian Defense Minister Anyu Angelov has announced an ambitious military investment plan until 2020. Photo by BGNES

Bulgaria plans to spend 2 billion Lev (1 BEuro) by 2020 to acquire military equipment that meets the requirements of the North Atlantic Treaty Organization according to the investment plan of the Defense Ministry Anyu Angelov made public at a press conference last 19th of April.

The 13 projects that are part of the plan include the purchase of eight fighter jets, new weapons and navigation systems for the navy, and telecommunications and computer systems for ground and air forces, Defense Minister in Sofia when presenting the new investment plan.

“If we can ensure average annual defense spending of 1.5 percent of gross domestic product over the next nine years, that should be enough to cover the minimum needed to modernize the military” Angelov said.

The investment plan of the military contains 13 major projects but according to Gen. Angelov the ministry has 40 “spare” projects that will be carried out depending if additional funds are available. The Defense Ministry will continue to pay its dues for 29 ongoing projects.

The 13 priority arms purchasing and modernization projects will be subject to various forms of approval. According to the Bulgarian legislation, military investment projects worth over 100 MLev have to be approved by the Parliament; projects costing between 50 MLev and 100 MLev have to be approved by the Cabinet; and projects below 50 MLev require only the approval of the Defense Minister.

About half of the the 2 BLev will go for the purchase of new multi-purpose fighter jets for the Bulgarian Air Force – a long-anticipated armament deal that will be the priority for the Defense Ministry because at present Bulgaria still has only Soviet-made planes with even the most modern ones – MiG 29 – being approaching rapidly their expiration date.

Various reports and Angelov himself have indicated that Bulgaria will most likely choose from among the Swedish company Saab’s Gripen fighter jets, US-made F-16, and Eurofighter Typhoon. Bulgaria will probably buy 8 new fighter jets to be delivered around 2015.

The 13 priority projects of the Bulgarian military investment plan are as follows:

  • Setting up a battalion battle group of various types of forces – worth over 100 MLev, which means that it will require the approval of the Parliament;
  • Modernization of the three-second hand frigates bought from Belgium – worth over 50 MLev, therefore requiring the approval of the Cabinet;
  • Purchase of new multipurpose fighter jets – over 100 MLev;
  • Extending the life of the MiG 29 fighter jets – over 50 MLev;
  • Maintenance of the newly purchased Cougar and Panther helicopters – below 50 MLev – requires the approval of the Defense Minister only;
  • Modernization of the navigation systems of the Bulgarian Navy – below 50 MLev;
  • Acquisition of equipment communication and information support of a military detachment;
  • Acquisition of a new land-based military terminal – below 50 MLev;
  • Development of technical systems for strategic surveillance – below 50 MLev;
  • Completing the creation of special operation forces – below 50 MLev;
  • Constructing operational headquarters of the Joint Command – below 50 MLev;
  • “Cyber Defense” project – below 50 MLev;
  • Establishing an automated information system of the military – below 50 MLev.

The government reduced the size of the military last year to narrow the budget deficit to below 2.5 percent of gross domestic product this year from 3.9 percent in 2010, in line with European Union limits.
Bulgaria cut defense spending to 1.3 percent of GDP in 2011 after 1.74 percent in 2010 and 2.4 percent in 2008.

Bulgaria joined NATO in 2004 and has since worked to replace Soviet-era military hardware with NATO compliant equipment.

The Balkan nation has spent 522 million euros ($764 million) under contracts signed from 2003 to 2006 for C-27J military transport planes built by Finmeccanica SpA (FNC)‘s Alenia Aeronautica SpA, Cougar AS-352 and Panther AS-323 helicopters from Eurocopter SA and DaimlerChrysler AG off-road army vehicles.

It is still unclear how realistic the Defense Ministry’s investment plan will turn out to be since the some EUR 1 B is a substantial sum for Bulgaria’s state spending even spread over a period of 10 years.

The money will technically be part of the capital expenditures of the Defense Ministry, which in 2010 amounted to only BGN 7 M as the institution made a severe push for austerity after in 2009 it turned to be penniless over lavish arms purchasing contract made by the previous government that its current leadership is still trying to renegotiate.

The investment plan of the Defense Ministry will not be subject to approval by the Cabinet and/or the Parliament because it is indicative, which also allows it to avoid providing absolutely specific numbers and to be easily repealed by the next government in case of substantial budgetary restrictions.

Angelov, however, seemed very positive regarding the prospects of the unveiled
plan.

“This investment plan will not remain only on paper,” he told journalists vowing
not to leave his successor in a situation in which they have to pay out deferred payments for military contracts.

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