The Spike deal – the enemy of the Romanian Army’s strategists

The Romanian Army was the victim of the controversial arms deals on the Bucharest – Berlin axis, with the tacit and accomplice consent of the decision makers in the Ministry of National Defense. As a result of this deal, the Romanian soldiers got old armored cars made 48 years ago and machine guns refused by the German army.

At the beginning of this year, the Ministry of National Defense, through the Romtehnica National Company announced the acquisition of anti-tank missiles and launching systems in the amount of approximately 130 million euro from EuroSpike GmbH in Germany, although the 2007 – 2025 strategic programs for the equipment of the Romanian Army did not provide for the acquisition of missiles. EuroSpike will deliver the weapons in 2017 -2019.

On January 7th, Prime Minister Dacian Cioloș met Chancellor Angela Merkel, in Germany, for presenting his governance program. During the press conference organized in the Federal Chancellery in Berlin, Angela Merkel said that she spoke to Cioloș about improving the commercial relations between the two countries. In turn, Prime Minister Dacian Cioloș thanked the German Chancellor for “the opportunity of this visit”.

Four days later, on January 11th, the Romtehnica National Company announced the conclusion of two agreements for the acquisition of antitank portable missiles and antitank guided missiles, worth 92.7 million euro, namely 17.9 million euro, from EuroSpike Germany. The contracts were awarded on Christmas Eve, on December 24th 2015.

The Romanian Center for Investigative Journalism (CRJI) already wrote about the deal between Romtehnica and EuroSpike, on January 14th. After another five days, Romtehnica revealed another two contracts, also concluded with EuroSpike, for the acquisition of other antitank guided missiles, worth 18.9 million euro, respectively 1.2 million euro. Why were three contracts needed for the acquisition of missiles, if they were awarded directly to the German company, without prior call for tender? Moreover, the acquisition of these missiles and launching system was not included in the main strategic programmes of the Ministry of Defense.

Another interesting thing is the reaction of the Minister of Defense, who subsequently appeared in the Observatorul militar magazine under the title “Spike, the enemy of armors”. The director of the equipment programmes in the Department for Armaments and one of the officials who negotiated the four contracts, Colonel Alexandru Caravan, stated that there was no relation between Prime Minister Cioloș’s visit and the signing of the contracts.

Awarded by direct negotiation

All four contracts, evaluated at over 130 million euro, were awarded by direct negotiation to the German company EuroSpike GmbH, with the justification that the products can only be supplied by a certain type of provider, due to technical specifications. EuroSpike GmbH is a joint venture composed of Rafael Advanced Defense System Ltd. din Israel, Diehl and Rheinmetall – din Germania.

Officials of the Directorate of Information and Public Relations of the Ministry of National Defense claim that the direct award of the four contract is justified by the fact that the Romanian Army is equipped with antitank guided missiles of the same type, purchased in 2004 and installed on “infantry battle machines” type armored system (MLI). According to the officials, the Army is equipped with a training system, through simulation for the operators and a testing system for the technical status of the missiles.

„For the armored systems, the antitank missiles are only a supplement to the necessary ammunition. The supply contract concluded in 2004 also provided training sessions for the turret operators and courses for the use of the purchased equipments. The antitank guided missiles for the equipment of MLI type armored systems or portable systems are identical and interchangeable, implying common logistics and the reduction of expenses and training time for the operation and maintenance personnel, and from an operational standpoint, it simplifies the supply, the periodical technical inspections and provides the same specific storage conditions”, states the response sent by the Ministry of Defense.

The delivery of the missiles

According to the supply agreement no. 02/568/2015, the portable antitank missile systems will be manufactured in Germany in 2016 – 2019. They will be delivered starting with late 2017, the last equipments being scheduled to equip the Romanian Army in early 2019.

“In reference to the acquisition of „antitank systems” (antitank guided missiles), according to supply agreements no. 02/566/2015, no. 02/567/2015 and no. 02/571/2015, they will be manufactured in 2016 – 2018 in Germany and delivered in the second half of 2017 and the first half of 2018”, according to Ministry officials.

However, the representatives of the Ministry of Defense refused to disclose the amount of missiles and launching systems that were purchased. To make a general idea, Spain paid 424.5 million dollars for 2600 Spike – LR missiles and 260 missile launching systems.

Offset

The contracts concluded between Romtehnica and EuroSpike for the acquisition of the missiles and launching systems have offset clauses, according to Government Emergency Ordinance no. 189/2002, regulating the compensatory operations related to the acquisition contracts for defense, public order and national security needs.

In this sense, EuroSpike is required to make economic operations to compensate Romania for at least 80% of the value of the four contracts. Basically, the German company may make compensation under various forms, from direct and indirect investments to exports, technology transfers or donations.

“According to OUG 189/2002, the acquisition agreements stipulate the obligations of the German producer to perfect, with the Compensation Office for Special Technique Procurements (OCATS), a compensation agreement for 80% of the total value of the acquisition, within 60 days, as provided in art. 19 par. (1) of the Ordinance”, stipulates the response sent by the Ministry of Defense.

The Gepard deal

The German Federal Ministry of Defense and the Ministry of National Defense signed in 1998 a memorandum according to which the Romanian Army received, free of charge, the Gepard antiaircraft systems, decommissioned by the German army. In exchange for this German “charity”, the Minister of Defense negotiated with Krauss Maffei Wegmann the recommissioning of armored vehicles. For starters, he paid seven million marks, and then approximately 20 million euro. In 2006, a new memorandum was signed for the transfer of military equipment for Gepard, in the amount of 2.2 million euro. Subsequently, another contract was signed, worth 15.4 million euro, for the improvement of the Gepard system. Over 43 million euro was paid in total. To make the deal even more spectacular, the German company Krauss Maffei Wegmann donated to the Romanian Army the three evacuation armored vehicles – reparations made in 1968, in exchange for some offset obligations.