ON December 3 last year, the Ministry of Defence launched a procedure for the modernisation of the Mi-17 and Mi-24 helicopters of the Bulgarian air force.
A special commission was set up to assess the potential contractors. Several top players in the aircraft industry showed interest in the opportunity, among them the US Lockheed Martin, the European consortium EADS, Israel's Elbit, as well as the Russian company that produced the helicopters. The participation of the British BAE Systems has of late sparked much heated debate.
Two weeks ago, Angel Naydenov, spokesperson for the Bulgarian Socialist Party and member of the parliamentary committee on international policy, defence and security, told a news conference that the procedure for the implementation of the project for repairing and upgrading Bulgaria's Mi-17 and Mi-24 helicopters has been discredited and should be immediately halted. Naydenov alleged that BAE Systems had been selected as a strategic partner since London circles close to Prime Minister Simeon Saxe-Coburg had lobbied for the company.
Allegations about an unfavourable price, and lack of experience for a project of such a scale, tipped the balance and as a result the procedure is currently being reviewed by the military prosecutor's office.
While the investigation was still underway, senior representatives of BAE Systems arrived in Sofia for a special news conference.
BAE Systems operates in 130 countries on five continents. This makes BAE Systems one of the most international defence companies in the world, said John Neilson, director of marketing communications. The sales of BAE Systems for 2003 were 20 billion euro, 80 per cent of which came from exports to countries outside the UK. The largest customer for the company's product was the US.
The company has been very active in Central Europe too. The company has contracted the manufacture of the so-called IFF system, or "identification friend and foes" air and ground system for the Slovakian government.
In a joint effort with Sweden's SAAB, BAE Systems will be developing a new-generation fighter, which is to replace the MiG-21 in the Czech Republic and the MiG-25 in Slovakia.
Recently BAE Systems has won a project for the upgrade of Mi-24s in Poland to full compliance with NATO standards.
In Bulgaria, BAE Systems will be upgrading, if it is selected as partner to the Ministry of Defence, the Russian Mi-17 and Mi-24. The approach to the upgrade of the helicopters that BAE intends to apply is based on flexibility, modular design and open architecture, BAE said. Thus the equipment can be upgraded module by module, said David White, executive vice president Europe. The modular approach will also allow any weapons - Russian, German, British. "We are weapons independent," White said.
The pricing approach will also be just as flexible, BAE Systems said. In response to the allegations that the contract signed between the Bulgarian party and the UK company was 200 million euro, which is about 50 million euro higher than the offer of the bidder ranked second, Neilson said that BAE had not submitted any pricing to the government yet, so they could not go into detail, particularly because their competitors would be very interested in what they might suggest as a price.
There have also been allegations that BAE might be investigated for corruption, failure to meet deadlines and failure to keep budgets once the contract is signed. Approached by The Sofia Echo for comment on the allegations, Neilson of BAE Systems said there was no inquiry into BAE in the UK.
"We oversee the law, we have signed declarations we will observe the anti-corruption legislation in the countries we work in."
Neilson said the speculations might have started from the problems BAE had experienced with two particular programmes run in the UK - a development of a nuclear submarine and surveillance aircraft. "There were some reports of the problems but we inherited those programmes from the companies which worked on them before that."
BAE Systems also announced they are opening a permanent office in Sofia at the end of this month.