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Slovenia To Withdraw From Boxer Programme

BOXER 8x8 armoured vehicle [image via ARTEC]

Slovenia has announced it intends to withdraw from the Boxer Programme and to reverse the procurement decision with OCCAR.

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News Release, Ljubljana, 15 September 2022: [auto-translated] The government adopted a decision on the withdrawal of Slovenia from the Boxer programme.

Today, the Government became familiar with the Audit Report on the expediency of purchasing 8×8 wheeled combat vehicles for the needs of the Slovenian Army and concluded that Slovenia will withdraw from the Boxer programme. The Ministry of Defence will inform the Organisation for Cooperation in Joint Armament (French Organisation Conjointe de Coopération en matière d’Armement – OCCAR) about this…..

(See below for full news release text)

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Editor’s Comments: The decision to buy the German 8×8 mechanised infantry vehicle (see Slovenia Procures 45 BOXER Vehicles) to equip a single battlegroup was formally announced on 17th May 2022 after the vehicle had been selected in 2018 to equip two battlegroups but, following an audit, the political party now in power has decided to cancel. It appears that rather than buying Boxer, which would have been similar to the Lithuanian Vilkas in configuration, the Polish KTO Rosomak version of the Patria AMV is now being considered.

The KTO Rosomak (Wolverine) is the primary Infantry Fighting Vehicle used by Poland’s leading Mechanised Infantry Brigades – this example was photographed in Latvia in 2017 [© Bob Morrison]

The Slovenian Army is believed to currently field around 120 wheeled armoured infantry vehicles, of which a quarter are Finnish Patria AMV 8×8 models known as SKOV Svarun, ordered in 2012, and the remainder are much older Austrian Pandur 1 6×6 models, known as the LKOV Valuk.

Slovenian VALUK 6×6 (Pandur 1) in Norway during TRIDENT JUNCTURE 2018 [© Bob Morrison]

Our thanks to regular reader PK for the heads-up.

~ Full News Release Text ~

News Release, Ljubljana, 15 September 2022: [auto-translated] The government adopted a decision on the withdrawal of Slovenia from the Boxer programme.

Today, the Government became familiar with the Audit Report on the expediency of purchasing 8×8 wheeled combat vehicles for the needs of the Slovenian Army and concluded that Slovenia will withdraw from the Boxer programme. The Ministry of Defence will inform the Organisation for Cooperation in Joint Armament (French Organisation Conjointe de Coopération en matière d’Armement – OCCAR) about this.

By the end of the year, the Ministry will prepare a solution for the formation of the capabilities of the medium battalion combat group and the medium combat reconnaissance battalion. In doing so, it will pursue the goal of saving at least 400 million Euros based on estimates so far. The total cost of purchasing both capacities is estimated at at least EUR 1 billion 842 million. The Government will inform the Defence Committee of the National Assembly of the decisions adopted today and the audit report on the efficiency of the aforementioned procurement.

The Ministry of Defence began more intensive activities for the implementation of the 8×8 Wheeled Combat Vehicle (WWV) procurement project in 2017. The Ministry informed the Government of the Republic of Slovenia of the progress of the 8×8 WVW purchase process for the construction of the Medium Battalion Battle Group (SrBBSk) at the beginning of 2018. Joining the multinational Boxer programme within the framework of the Joint Armaments Cooperation Organisation was identified as the most appropriate method and procedure for selecting a supplier.

In February 2019, the Ministry assessed that in order to continue the project, it is necessary to carry out activities that will mean a more comprehensive approach to the construction of SrBBSk, and to prepare a basis that will enable the assumption of obligations over a period of several years. Due to the above, the project was temporarily postponed by decision of the Government of the Republic of Slovenia.

The contract for the purchase of 45 BKV 8×8 worth EUR 281.5 million excluding VAT was signed on May 11, 2022 and includes a logistics package, development costs and project management costs. This value does not include the equipment for the C4I communication system, which is estimated to be at least EUR 13.5 million without VAT. Any annual escalation must be added to the total contract value. To reimburse the development costs, Slovenia must pay EUR 7.2 million to other countries and EUR 3 million for administrative costs.

At the beginning of June 2022, the Minister of Defence ordered an internal audit review of the feasibility of the BKV 8×8 procurement. As part of the expediency, the internal audit verified whether the purchasing procedures were conducted in such a way that the selection of the Boxer vehicle was economical, that the purchasing process was efficient and that the purchase was successful.

Among other things, it follows from the audit findings that the audit cannot give an opinion on the economy of the purchase of the BKV 8X8 Boxer, since the prices of other vehicles that meet the applicable standards have not been worked out, nor has the feasibility of purchasing them. The audit findings also show that the purchasing process was partially effective.

As part of the audit, it was established that the decision of the Minister of Defence from February 2021 to send Poland a request for an offer for combat vehicles for equipping the SrBBSk and to prepare a request to check the possibility of upgrading the already existing basic vehicles 8×8 (Patrij) with different weapons systems (30 mm cannon, 120 mm mortar, medical vehicle, technical support vehicle, command vehicle and others), was not realised.

The purchase of 45 BKV 8×8 follows the set goals for equipping the medium infantry battalion and contributes to their achievement. Funds are not planned to purchase additional 8×8 BKVs at least up to the minimum requirements by 2026, which may mean that the final operational capability goal for the medium infantry battalion by the end of 2026 will not be met. Funds for the procurement of combat support systems and operational assurance for the medium infantry battalion and the battalion battle group until 2026 are planned, but the procedures for the procurement of the missing combat support systems and operational assurance have not yet begun. The internal audit finds that data regarding the required number and type of 8×8 vehicles for the medium infantry battalion and the medium battalion battle group is inconsistent in terms of both the total number and type of vehicles.

Both in the Resolution on the general long-term development and equipping programme of the Slovenian Army and in the Medium-term Defence Programme, it is foreseen and emphasised, among other things, that we will purchase 8×8 vehicles that have already been tested in operational use, without special major adjustments and additional development for the Slovenian Army. Regarding the provenance of the BKV 8×8 “Lithuania model” in operational use, no clear answer was given during the audit. It was explained that experts from the Slovenian Army and the Ministry met with experts from all countries participating in the Boxer programme, exchanged experiences in the field of vehicle use and maintenance, and that the operational experience of the vehicles on the battlefield was verified from newspaper articles and online publications. OCCAR sites, and Germany used the vehicles in Afghanistan.

It was found that the BKV 8×8, which is the subject of the contract concluded through OCCAR, meets at least the minimum requirements regarding firepower, ballistic and mine protection, as well as manoeuvrability and tactical-technical characteristics requested by the client. Based on data from the investment documentation, the internal audit believes that the most expensive version was chosen in 2018. The internal audit concluded that the documents of investment documentation and materials from 2018, which were prepared for the expert council, which at the Ministry of Defence is responsible for assessing eligibility and monitoring and coordinating the implementation of key investments in the field of defence, deal with four possible types of BKV vehicles 8×8.

In the continuation of the BKV 8×8 procurement process in 2020, despite the changed circumstances, such as a new tactical study, new NATO documents, the process of adopting the 2021 Capacity Goals, possible changes in the BKV 8×8 market, the Ministry did not look for other options, except for joining OCCAR.

According to the internal audit, the decision for higher ballistic and mine protection, which exceeds the minimum requirements, influenced a smaller selection among the BKV 8×8 and consequently a higher price. Due to the above, the internal audit could not give an opinion that the purchase of the BKV 8×8 Boxer was economical, nor could it give an opinion with certainty that the purchase could be carried out with fewer funds, since the data on possible versions of the BKV 8×8 vehicles comes from market research. which was carried out in 2017.

When preparing the materials, the General Staff of the Slovenian Army estimated that EUR 710 million is needed to establish a medium infantry battalion (SrPB) and an additional EUR 332 million to establish all SrBBSk modules, which in total amounts to EUR 1 billion and 42 million. This amount does not include infrastructure, training and asset life cycle costs. As part of the analysis, it is also stated that, as part of the Act on providing funds for investments in the Slovenian Army in the years 2021-2026, EUR 609 million is currently planned for this purpose, but in order to complete the equipping of the SrPB and the SrBBSk modules, according to the General Staff’s assessment, , to provide at least another EUR 433 million.

A cost estimate for the Medium Combat Reconnaissance Battalion (SrBIB) has not yet been made, as no tactical study has yet been produced to define the structure and equipment. Medium Combat Reconnaissance Vehicles are expected to be more expensive than Infantry Medium Combat Vehicles due to the additional requirements. From this, it is estimated that the price for such a battalion will be approximately EUR 800 million, but even these costs do not include infrastructure, training and the life cycle of assets.

The total cost of the acquisition of both capacities is therefore estimated to be at least EUR 1 billion 842 million, but this estimate is probably even on the lower threshold, and it is very likely that the price would increase even more with indexation. Both capabilities can be achieved at a lower cost while pursuing the minimum required performance targets. The greatest savings can be achieved by restructuring SrBBSk and SrBIB.

From the above and on the basis of expert assessments, it can be concluded that the planned purchase of 136 BKV 8×8 to the already existing 30 vehicles is unnecessarily ambitious. We can save at least 400 million Euros by optimising, reducing the purchase of the planned number of BKV 8×8, selecting a possibly cheaper provider and upgrading the existing 30 BKV 8×8.

The Ministry of Defence has so far received an invoice in the amount of EUR 7.2 million for the reimbursement of development costs to other countries participating in the Boxer programme, with a currency of 4.8.2022, and an invoice in the amount of EUR 2.533 million for the first call-up of operational costs in 2022 with a currency of 1 9. 2022, which has not yet been settled.

The risk of achieving the final operational capacity of the medium infantry battalion, which, according to the internal audit, is not under control, is also represented by personnel problems, so it will be necessary to take measures to improve the situation in the field of personnel as soon as possible.

The internal audit made recommendations for improving operations, including the creation of a comprehensive investment plan for the construction of the entire medium battalion combat group (with a medium infantry battalion and all required modules) and a medium combat reconnaissance battalion, which would be included after the approval of the Ministry’s leadership into the relevant planning documents and would represent the basis for the preparation of investment documentation and the implementation of future procurements for the needs of establishing a medium battalion combat group and a medium combat reconnaissance battalion.

The Ministry has already made an inquiry to OCCAR regarding the possible withdrawal from the Boxer programme and the cancellation of concluded international and civil law documents. From the answer received, it follows that by signing the Agreement, the Republic of Slovenia did not become a full member of OCCAR, that the concluded agreement refers exclusively to the participation of the Republic of Slovenia as a non-member of OCCAR in the Boxer programme, therefore, in the event of a decision to terminate this cooperation, the agreement would become irrelevant.

From the explanations received by OCCAR, it can be concluded that the level of costs may be affected by the current unstable conditions in the world market, which has caused the industry to engage several subcontractors. Thus, OCCAR explains that without coordination with the industry, it cannot provide an accurate calculation of the termination of the contract, estimating that the costs for the Republic of Slovenia will amount to approximately one fifth of the contract value.

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