Bulgarian defence companies and the entire Bulgarian defence industry have declared themselves against the selection organised by the Defence Ministry (MoD)that excluded local business from participating in important Government orders, and declared that they were contemplating a shift towards the energy projects.

According to the executive manager of Samel-90 AD, Petar Georgiev, the selective process implemented by the Bulgarian army for the modernisation process of the three branches of the forces were grossly unsatisfactory. Such conditions have been applied and demanded on the local industry that they were simply beyond any comprehensible reach for the local firms - too much experience or annual budget is required - which was insurmountable for the Bulgarian companies at present, due to the complete lack of financial support and subsidies from the Government in the first place.

"We don't know if Bulgarians are doing this, or if this is done with some foreign consultants," Georgiev said, as quoted by Mediapool.bg.

Ognyan Kostadinov, executive director of Bitova Elektronika AD, commented that the tenders organised by the MoD bore "no juridical fallacies, only moral ones".

According to Georgiev, there was not a single Bulgarian company that was currently involved in executing any sort of business or taking any form of participation with the MoD, and that the MoD instead opted for sealing contracts with foreign firms for all the important projects needed to modernise the Bulgarian armed forces.

"The offset programmes are dust in the eyes of society," he said, pointing out that to date, not a single offset project had started. As a consequence, most Bulgarian companies in the defence sector were considering the unorthodox and unprecedented for this country shift… to the energy sector.

For this year alone, the companies from the Bulgarian Defence Industry Union (BDIU), have registered a net positive turnover of $400 million, of which 96 per cent was aimed at foreign clients.

Chairman of the BDIU Stefan Vodenicharov explained that in the beginning of 2009, experts from the companies and the Ministry of Economy and Energy would initiate a workable strategy for the defence industry, whereby a priority would be given to Bulgarian companies when it came to the modernisation of the Bulgarian armed forces.

From the union, the demand would be the creation of a fund for capital support for the research and development of high tech modern combat equipment. Regardless of the membership in Nato, the MoD has to allocate two per cent of its budget for scientific research, whereas currently in Bulgaria this sum is more in the range of 0.2 per cent.