Background and status of the Slovakian vehicle project

There has been some public discussion of the Slovakian vehicle project, which Patria announced in a news release of 17 November 2017. The project has been subject to various questions and speculation. In this context, Patria would like to state the facts openly, as they are known to the company.

The project in brief

The defence ministries of Slovakia and Finland agreed on a joint research and development programme in the spring of 2017. The ministries chose three companies as industrial partners: Konstrukta Defense a.s. (main supplier), Patria Land Systems Oy (platform) and EVPU a.s. (weapon system). Patria supplied the new prototype version of AMVXP vehicle platform for the research and development programme. The programme includes test stages in both Slovakia and Finland. Based on the results of this development phase and after the tests, Slovakia plans to order 81 IFV vehicles as part of a military equipment modernisation project (2018–2024).

The Finnish and Slovakian ministries have defined the technical requirements of a research and development programme for the entire vehicle system, which they will also develop and assess from their own perspectives. Based on these needs and requirements, Patria has submitted a prototype platform and EVPU a weapon system meeting the requirements.

Patria, Konstrukta Defence and EVPU are industrial partners in this research and development programme. Konstrukta Defence is both the main supplier and the integrator, EVPU is the weapon system supplier, and Patria is the supplier of the vehicle platform. Patria has a cooperation agreement with Konstrukta Defence, but not with the other partners.

The initial stages of the project

The 8x8 vehicle project has been under discussion in Slovakia for several years now. As far as Patria is aware, the Ministry of Defence of the Slovak Republic contacted the Ministry of Defence of Finland about the project at the end of 2016. As a result of negotiations between countries, a Memorandum of understanding was signed in May 2017 and a Technical Arrangement Agreement was signed on 17 July 2017.

Alongside the negotiations between the Ministries of Defence of Slovakia and Finland, a meeting was held between the Ministry of Defense of the Slovak Republic, Konstrukta Defence (which is 100% owned by the Ministry) and Patria in early 2017. The meeting included the discussion of a possible test phase, as well as the preliminary division of tasks between Patria and Konstrukta Defence, and the possibilities of production transfer by Patria in light of a possible serial production agreement. However, the Slovak ministry will only decide on a possible follow-up after the end of the research and development project. Patria has also been discussing the possibility of using EVPU’s weapon system in Patria's other sales and marketing projects.

The research and development project complies with the EU procurement directive

The Ministries of Defence of Finland and Slovakia have agreed on a research and development project in line with the EU procurement directive. The joint projects between the states are also in accordance with the directive and the countries’ procurement legislation. Patria has worked openly in cooperation with the Finnish and Slovak defence ministries.

As far as Patria is aware, the Slovak administration has considered various procurement procedures, this being one of the possible alternatives. In addition, the Slovak Armed Forces have independently assessed the vehicles and their systems. Slovakia has made these decisions, with regard to its overall solution and the research and development project for Patria's vehicle platforms, in accordance with its own analyses and needs. Public disclosures have also been made in Slovakia on both the research and development project and Slovakia's various vehicle needs.

One may state, in general, that some 8% of the defence procurements within EU is done by an open competition. The procurement Directive has led to an initial increase of defence procurement in EU-wide competition, but that a significant share of expenditure, especially for high-value, strategic, complex defence systems, is still done outside the Directive.

Progress of the project

The vehicle system is still being tested in Slovakia. At the end of the tests, both Finland and Slovakia will report on the tests and the research and development project, and decide on possible follow-up measures. The vehicle system tests are still expected to end in April. It is not known how and when Slovakia will make a public statement on the research and development project, and decide on a possible follow-up.