Czechs Choose, Cancel, Then Come Back to Pandur II APCs

Pandur II w. RCWS-30
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In January 2006, the Czech Republic selected General Dynamics’ European Land Combat Systems subsidiary Steyr-Daimler-Puch Spezialfahrzeug GmbH of Austria to supply its army with 199 new eight-wheeled Pandur II armored personnel carriers (APCs) between 2007-2012. The KBVP vehicles would replace Soviet-era OT-64 SKOT APCs, and would be produced in Austria and the Czech Republic.

In 2005 the contract included an option for 35 additional vehicles for a total of 234, and had a potential value of Koruna 23.6 billion ($1-1.4 billion). Steyr’s Pandur II was a finalist, and eventually won the competition. But questions arose, the deal became a political football, and delivery issues jeopardized the deal into oblivion. Or so it seemed. Despite the economic crisis gripping Eastern Europe, the Czechs reinstated a scaled-down version of the deal in late February 2009.

• Selection and a Winner
• Pandur II Industrial Arrangements
• Contracts & Updates [updated]
• Additional Readings [updated]

Selection and a Winner

Old OT-64C, Kosovo
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After the original April 2005 tender had been winnowed down to 3 semi-finalists (Patria’s AMV, Steyr’s Pandur-II, and Rheinmetall’s Boxer) the Czech testing program included crossing open water, test drives on paved and off-road surfaces, boarding of soldiers, and loading on to and unloading from a C-130 Hercules cargo aircraft. The Boxer failed the water crossing tests, however, leaving just the AMV and Pandur-II as contenders by the end of November. Czech Ministry of Defense spokesman Andrej Cirtek listed the three main criteria for the final decision as “the price, the participation of Czech industry, and the technical and tactical quality of the engines.”

In January 2006, the government announced the Pandur-II as their preferred choice.

Like Patria’s AMV and MOWAG’s Piranha, Steyr’s² Pandur II is a vehicle family of mission-specific variants. Common design elements include two steered axles, an independent suspension system and run-flat tires for advanced mobility, a high level of embedded armor protection, spall liners for the crew compartments, and drive train and steering linkages within the hull for superior survivability. A computer-based interactive maintenance and repair diagnostic system enables complete power pack changes in approximately 30 minutes.

The Pandur II is equipped with a Cummins ISC 350 diesel engine rated at 285 hp with an electronic engine management system, and a ZF 6HP 602C fully automatic transmission. A 400 horsepower engine is available as an option, and a water heater provides engine preheating for cold starting and for heating the crew compartment.

Current customers for the Pandur and Pandur II include Austria (68 Pandur, “requirement for”[1] 129 Pandur II), Portugal (260 Pandur II), Belgium (60 Pandur), Gabon (20 Pandur), Kuwaiti National Guard (70 Pandur), Slovenia (72 Pandur), the United States (50 Pandur 6×6 AGMS).

Pandur II Industrial Arrangements

Who’s driving?
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Industrial offsets for national firms are a common requirement in defense projects, and the Czech APC competition was no exception. The first 17 vehicles under this contract are slated for delivery from Steyr’s Austrian plant, but vehicles 18-107 are slated for final assembly in the Czech republic, with a number of local firms participating.

Steyr says that Czech subcontractors will contribute between 40-60% of the Pandur II vehicles’ components once serial production begins. Overall, approximately 12 Czech companies are participating in production, including:

• Defendia CZ, a Steyr subsidiary. Produced the main components of the first 17 vehicles in conjunction with the Vienna factory.

• Vojensky opravarensky podnik companies, incl. 025 Novy Jicin and 026 Sternberk. Main partners, and main assembly lines for remaining vehicles. Retooled a production hall and have opened their first process line at Novy Jicin to begin vehicle hull production, and built an entirely new production hall at Sternberk. VOP 025 is responsible for Czech production of the baseline vehicle, components for other versions, part of the logistics and documentation, and servicing. VOP 26 Sternberk will handle part of the logistics, as well as production of specialized Pandur II variants and weapon system production/ integration for the RCWS-30.

• BOIS: Summer and winter camouflage nets
• COLORLAK: Special finish paints
• DICOM: Communication systems
• E-COM: Simulators for comprehensive crew training
• Letecke Pristroje Praha: Diagnostics, navigation, command systems
• MEOPTA Prerov: Surveillance and sighting equipment, optical electronic components
• MESIT: Communication equipment, digital and analogue electronics
• Rayservice: cable harnesses and electro mechanical assemblies
• T-CZ: Microwave technology, antennas

Note that special characters do not render correctly in all browsers, so DID has used their unaccented English equivalents.

Contracts & Updates

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KVBPs, Afghanistan
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May 18/11: Israel Aerospace Industries (IAI) announces that it has delivered its new 8.5 kg MiniPOP surveillance & targeting turret, in a deal worth “several millions of dollars.” A pair of MiniPOPs equip each Rafael’s Samson 30 RCWS installed on the Czech Army’s KBVP PANDUR 8×8 CZ, serving as the commander’s and gunner’s sights. The Pandurs are currently operated by the Czech Army in Afghanistan.

Feb 22/10: A critical witness in the Czech Pandur-II controversy cannot help, because he has no memory. Czech arms dealer Pavel Musela was crippled by a hunting accident in October 2008, just as new contract talks between Steyr and the Defence Ministry were coming to a head. As for Musela’s head, the accident caused severe brain damage. He is able to communicate and recognizes his family, but has lost many of his memories. Prague Daily Monitor.

Feb 19/10: Czech Chief of police Oldrich Martinu has decided to establish a team to probe alleged corruption in the Czech Pandur-II purchase, following media reports. The Prague-based DNES recently published a transcript of a hidden-camera interview with 2 former Steyr managers who mentioned bonuses from the deal for political parties, as well as the names of several politicians. The Czech daily The Mlada fronta Dnes (MfD) also reports that Steyr signed a CZK 1 billion lobbying contract with Czech entrepreneur Jan Vlcek in December 2002, but the contract reportedly ended in less than a year, and Vlcek reportedly believed he was expected to pay bribes.

Czech Prime Minister Jan Fischer has also shown interest in the probe. Ceske Noviny | Prague Monitor re: lobbying contract | Radio Prague | Defense News | Ceske Noviny re: political interest.

Pandur II & RCWS-30,
water trials
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March 2/09: The Czech government announces that it has approved a buy of 107 Pandur IIs, for CZK 14.4 billion (about $650 million), with an agreement for 153% value of industrial offsets, and a firm agreement on maintaining the average unit price. Prime Minister Topolanek adds that the program delay has caused the military “marked problems with operation capabilities at home and mainly in foreign missions.” Ceske Noviny.

Feb 26/09: Czech firm VOP-025 in Novy Jicin, north Moravia, signs an agreement with General Dynamics. VOP believes that an order for 107 APCs would be worth about CZK 2.1 billion (about $95 million) to the company, and will allow them to continue employing about 120 new military equipment specialists, whom they would otherwise have to lay off.

The firm expects to produce 90 APCs between 2009-2013, in 4 versions. Prague Monitor.

Feb 26/09: The Czech government announces that the economic crisis will delay a number of military projects. Among other moves, modernization of 10 Mi-171S helicopters to enable them to fly in dangerous areas like Afghanistan will be shifted from 2009 to 2010, CZK 200 million in installment payments for the planned purchase of 107 Pandur APCs will be delayed until 2011, and CZK 60 million will be deferred from the planned construction of an avionics laboratory to modernize the country’s L-159 light attack aircraft. Ceske Noviny.

Land Rover Defender
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Feb 26/09: According to Czech Defense Ministry sources, the military is interesting in buying a new batch of 79 Land Rover Defender jeep-class vehicles by the end of November 2009. This vehicle type already serves with Czech forces. The new vehicles will replace older Russian designs like the UAZ-462 and UAZ-469B in the Czech rapid-deployment unit that serves with ISAF in Afghanistan, as well as by the joint Czech-Slovak EU battlegroup. The Land Rover purchase has been given an early estimate of CZK 384 million (about $17.3 million).

The Czech Republic has purchased a handful of mine-resistant Dingo-2s and Iveco MLVs to accompany these lightly protected off-road vehicles, and the Pandur IIs would form the a heavier high end for international deployments, with better protection relative to the Dingo-2s, and much better firepower. The Forecast International report adds that approval is imminent for a CZK 12 billion order of 107 Pandur II APCs. Forecast International | Prague Daily Monitor.

Feb 8/09: The Czech cabinet is considering a reduced order of 107 Pandur-II APCs, and Czech firms are calculating the expected benefits. The weekly Euro estimates the value at CZK 5.3 billion, expecting that direct offset programs involved in vehicle production should make up 60% of an CZK 11.5 billion order, while indirect offset programs should account for 90% of the order’s value or around CZK 10 billion, over 10 years. Approval for a revised contract with Steyr is expected to come to a head in February.

VOP-025’s chief executive Ales Truxa confirmed to Euro that his firm is already supplying components for the 260 Pandur IIs ordered by the Portuguese Army. Prague Monitor.

January 2009: Steyr is given an opportunity to bid a lower number of APCs, and possibly keep the Czech contract. Source.

April 9/08: Jane’s Defence Weekly reports that senior officials from the Czech Ministry of Defence (MoD) and Steyr Spezialfahrzeug (SSF) signed a deal on this date to allow testing of 2 SSF Pandur II 8×8 armoured vehicles at an independent facility.

“Industry sources said the tests would probably take place at the VOP-026 Sternberk military repair depot in the coming weeks, with the objective of demonstrating to MoD officials that SSF has successfully corrected a small number of technical deficiencies.”

Dec 11/07: The Czech Government cancels the Pandur contract. Czech Defence Minister Vlasta Parkanova says that “At first glance, it is perhaps a radical solution… But we are convinced that it is a correct one.” The Ministry did say that it will wait for Steyr’s response before taking any further steps, and sources indicate that the company will attempt to save at least part of the bid in discussions with the MoD. Since the contract was concluded between the Ministry of Defence and a Czech company (Defendia CZ), international arbitration is a very unlikely response.

The issues behind the government’s conclusion vary depending on whom one talks to, but they fall into 3 broad categories: delivery and acceptance dates, force mix, and domestic politics.

Czech Defence Ministry spokesman Andrej Cirtek, for instance, disagreed with Steyr’s assessment, saying that the 17 initial APCs would not have been delivered until mid-2008. While Steyr claims the vehicles are ready, the Czechs will not consider them ready, and will not accept delivery, until all failures to meet specifications are fixed. This was the issue that broke the contract, and allowed the Czechs to legally abrogate the deal.

Jan Vidim, the head of the Czech Chamber of Deputies’ defence committee, also criticized the deal on political grounds. Defence Minister Karel Kuenhl actually signed to contract shortly after the Paroubek coalition he served in had lost the general election, acting on the advice of the Czech General Staff. The Civic Democratic Party, who won those elections, were less than thrilled by this. Some believe they have bided their time ever since, until issues arose that would give them an opening. This is possible. In addition, however, Jan Vadim also argued from the force mix perspective:

“I am simply convinced that the Czech Army cannot make good use of those 199 carriers. What we need is six-wheelers, armoured four-wheelers and a number of different types of vehicles. Buying 199 eight-wheeled vehicles was just wrong.”

See Nov 22/07 entry for a glimpse at what those “different types of vehicles” may entail, and note that follow-on orders are expected. Of course, buys of that nature are not incompatible with higher-end and more heavily armed wheeled or tracked APCs for use in more serious situations. Sources: Radio Praha | Ceske Noviny | Deutsche Presse-Agentur | Houston Chronicle.

Nov 29/07: General Dynamics Steyr-SSF confirms that the Czech military will include Spike-LR anti armor missiles on the RAFAEL RCWS-30 unmanned turrets, and announces that that the first 17 Pandur II wheeled armoured vehicles for the Armed Forces of the Czech Republic (AFRC) are “fully operational, combat-ready and ready for delivery from the Steyr facility in Vienna.” Of course, the release later adds that “Steyr and AFRC are discussing plans to implement several minor modifications to the vehicles, requested as a result of opportunities identified during readiness testing, in the near future.”

All 199 vehicles will be delivered to the AFRC before the end of 2012 – provided that the Czech government accepts them. Steyr-SSF release.

Nov 29/07: Given recent remarks from the Czech Defence Ministry’s deputy minister Jaroslav Kopriva, Steyr follows up with a second press release that begins:

“The Czech subcontractors involved in the manufacturing of the Pandur II armoured wheeled carriers for the Armed Forces of the Czech Republic (AFRC) have invested more than CZK 300 million in the production of the first 17 vehicles and in preparation for serial production.”

Nov 22/07: The Prague Monitor reports that the Czech Republic has ordered 4 Dingo-2 mine-resistant vehicles from KMW of Germany, and 4 smaller MLV mine-resistant vehicles from Italy’s Iveco. These vehicles are slated for immediate deployment to Afghanistan, but larger competitions in these categories are in the offing.

Nov 7/07: The Prague Daily Monitor reports that Pandur II deliveries will be delayed as the APCs have failed to meet a 24 of the required 93 military test criteria. The Spring 2006 contract’s deadline requires the first 17 vehicles under the contract to be supplied by the end of November 2007.

The Czech Defence Ministry’s deputy minister Jaroslav Kopriva has said that Steyr reaction to the defect fell short of expectations, and no definite time for a correction has been communicated. The Ministry is considering financial sanctions, or even withdrawing from the contract in part or in full.

Steyr’s PR official Jan Piskacek said the company would “be prepared for transfer by the end of November,” which is not the same thing as delivering test-ready vehicles that have corrected all identified issues. He added the Steyr position that most of the missed criteria were “of a formal character,” and that most had been redressed. (Tip thanks: David Vandenberghe)

Aug 28/07: Jane’s Defence Weekly reports that:

“Technical complications are continuing to delay the delivery of two Steyr-Daimler-Puch Spezialfahrwagen (SSF) Pandur II 8×8 armoured vehicles to the Army of the Czech Republic (ACR) for in-field testing prior to the November delivery date of the first production in-service vehicle to the ACR. The Czech Ministry of Defence (MoD) has acknowledged that the communications suite, satellite global positioning system (GPS) and Rafael Armament Authority Remote Overhead Weapon Station with ATK Bushmaster 30 mm cannon, could prevent the on-schedule delivery of the first two testbeds for extensive military evaluation.”

Pandur II, firing
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June 9/06: Czech Minister of Defence Karel Kahnl formally signs an agreement with the Steyr Company of Austria to supply 199 Pandur-II wheeled armored personnel carriers.

April 17/06: Czechs Formalize Gun Contract for New APCs. It’s ATK’s Mk44 30mm chain gun.

The Czechs had tested the RCWS-30 with an ATK Mk 44 dual-feed 30mm auto-cannon on both the PANDUR II and Patria Armoured Modular Vehicle (AMV) in open-water crossings (note picture); test drives on paved and off-road surfaces; and tested the fold-flat features for on-loading and off-loading in a C-130 Hercules aircraft. Now Alliant Techsystems, who has a long-standing defense relationship with RAFAEL, has formally received a contract valued at approximately $20 million for Mk 44 30mm cannon weapon systems that will equip the Czechs’ RCWS-30.

The Mk 44 system is part of ATK’s well-known Chain Gun family. ATK 30mm Mk 44 guns are already used in nearly 2,000 land vehicles, aircraft, and ship-board weapon systems for the United States and allied nations including Finland, Norway, Poland, Singapore, Switzerland, and the United Kingdom; these weapons will also be part of the US Marines’ new Expeditionary Fighting Vehicle amphibious APC.

Patria AMV & RCWS-30
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Feb 7/06: The Pandurs’ main weapon has been finalized. Czech APCs to Carry RAFAEL’s RCWS-30.

The RCWS-30 gun system pictured up top is RAFAEL’s RCWS-30 Remote Controlled Weapon Station, which can be operated from inside a vehicle. It was included in the official Steyr release, and was part of the Czech trials on both Patria’s AMV and Steyr’s Pandur II. The pictured system includes a 30mm cannon, a 7.62mm coaxial machine gun, and two Spike-LR multi-purpose missiles, as well as various sensors and defensive systems. There is a patent pending on the mechanism it uses to fold down for air transport, and the system includes stabilization, auto-tracking and slaving features.

January 25/06: The Czech government endorses procurement of Austrian Steyr Pandur-II APCs, and commences negotiations.

Nov 9/05: The competition narrows to 2 finalists, as Rheinmetall’s entry fails the river crossing tests. Only Steyr’s Pandur-II and Patria’s AMV are left.

Sept 20/05: BAE Systems Land & Armaments L.P. withdraws from the tender, without revealing which vehicle was on offer. DID suspects either its new SEP developed by BAE Hagglunds, or the new Turkish FNSS Pars II (Leopard) 8×8 wheeled armoured vehicle, developed with General Purpose Vehicles LLC (GPV) of the USA. BAE owns 49% of FNSS.

BTR-80: out
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Aug 17/07: The Czech government announces its shortlist from among the 7 bidders. Czech firm Globtrade Air s.r.o. (probably a BTR-80 variant), Poland’s BUMAR Sp. Z o.o. (probably a BTR-80 variant), and Italy’s Iveco Fiat OTO Melara, S.c.r.l. (the complementary Puma and Centauro vehicle families) are eliminated.

BAE Systems Land & Armaments (SEP or FNSS Pars II), GD Steyr Spezialfahrzeug (Pandur II); Patria Vehicles Oyj (Armoured Modular Vehicle), and Rheinmetall Landsysteme (Boxer MRAV most likely) advance to the semi-finals. See full DID coverage.

April 2005: Invitation for the provision of up to 234 wheeled armored personnel carriers is made public.

Footnotes

¹ Defense journalist Vanja Moskaljov of Croatia’s Vecernji List newspaper drew our attention to the fact that no contract has been signed in Austria for Pandur IIs, and suggests that even Army Technology’s listing of a requirement for 129 Pandur IIs may be too strong a statement: “The Steyr people often said that they would like it if the Austrian Army used Pandur II, because it would help them to promote the vehicle on other markets, but that the Austrian government told them that they didn’t have enough money for a new APC purchase.”

² Both Pandur and Piranha wheeled APCs are General Dynamics vehicles. General Dynamics European Land Combat Systems is based in Vienna, Austria, and consists of 3 subsidiaries: General Dynamics Santa Barbara Sistemas of Madrid, Spain; Piranha maker MOWAG GmbH of Kreuzlingen, Switzerland; and Pandur II manufacturer Steyr-Daimler-Puch Spezialfahrzeug GmbH of Vienna, Austria.

Additional Readings

• Army Technology – Pandur II

• Czech Ministry of Defence: Modernization Projects – Wheeled Armoured Personnel Carriers. Doesn’t have all of the announcements, etc., but does have a good timeline.

• Czech Ministry of Defence – Life Tenders: Wheeled Armoured Personnel Carriers for ACR

• Czech Ministry of Defence – Armoured Personnel Carrier Pandur II 8×8

• DID (Sept 23/05) – Czechs Issue APC Bidders Shortlist, Exclude Czech Firm