Portugal Picks Pandur-II Wheeled APCs

Pandur II

In February 2005, General Dynamics European Land Combat Systems finished negotiations to produce 260 Pandur II eight-wheeled armored combat vehicles for the Government of Portugal. Steyr-Daimler-Puch Spezialfahrzeug GmbH of Vienna, Austria, would be the program manager and system integrator for this $482 million (EUR 365 million) contract, with vehicle co-production in Portugal, and some participation from other General Dynamics European Land Combat Systems elements in Europe.

Evaluation of the contenders for this procurement program started in autumn 2003, but the buy was still only partly done in 2012. At which point Portugal moved to terminate the contract part-way through.

Portugal’s Contenders

Patria AMV
(click to view full)

Steyr’s Pandur II was competing against Patria of Finland’s AMV (Armored Modular Vehicle), and fellow General Dynamics subsidiary MOWAG GmbH’s Piranha III/ LAV III, upon which the American Stryker family of vehicles is based.

Steyr claims that the decision was based on the best commercial offer, overall persuasive technical performance during extensive vehicle tests, and Steyr’s guarantee to provide industrial offsets worth 150% of the contract value within 9 years.

Pandur II

The Portuguese corporation GOM (Gestao de Operacoes Metalomecanicas) is Steyr-SSF’s local industrial partner, and will be responsible for the manufacturing such as welding of the hull and the final assembly, testing and product validation of the Pandur. They will also handle the coordination of all sub components manufactured in Portugal – intercom equipment was given as an example.

The Portuguese Marines never received their 20 vehicles. The Portuguese Army’s original mix of 260 Pandur-IIs was going to be:

* 112 Infantry Carrier Vehicles
* 33 Mobile Gun with 105mm guns. In the end, only 10 were converted.
* 30 Infantry Fighting Vehicles with 30mm cannon and Spike LR missile capability
* 15 Anti-Tank Guided Missile vehicles with BGM-71 TOW missiles
* 31 120mm Mortar Carriers
* 16 Command Posts
* 10 Ambulance
* 4 Reconnaissance
* 9 Engineer
* 7 Recovery and Maintenance
* 6 Radio Access Point Station Vehicles

In the end, they would up with just 166 vehicles. DID does not have information regarding delivered distribution and types.

Contracts and Key Events

Pandur II, firing
(click to view full)

Oct 30/12: General Dynamics files its US SEC 10-Q quarterly statement, and reveals that they consider themselves to be in compliance with the contract. They have another 27 Pandur II vehicles awaiting delivery and acceptance, have not been formally notified of a termination, and have filed for arbitration as a way of protecting their legal position. As of Sept 30/12, their accounts receivable and contracts in process related to this contract amount to $130 million. SEC 10-Q | Reuters.

Oct 16/12: Intent to Cancel. Portugal announces that it wishes to cancel the remainder of the Pandur contract, and receive a EUR 55 million refund. The Army would keep the 166 APCs delivered do far, a total reached by finishing modifications that are still being made to 47 vehicles. So far, Portugal has paid EUR 233 million.

The Army would cancel delivery of 74 Pandurs, and the Navy would not receive its planned set of 20 amphibious Pandurs. Portugal will investigate other solutions; given Portugal’s shaky finances, blast-resistant MRAP vehicles are a possible substitute for the Army. Portugese MoD [in Portuguese].

Intent to terminate

Aug 20/10: Portugal’s Attorney-General and the DICAP investigative office are looking into the Pandur contract, as the state warns the contractor that they are getting close to breach of contract. Negotiations are still going on.

Portugal is upset about non-performance, as they’ve accepted just 21 vehicles to date, instead of the 166 they were supposed to have by now. RTP [in Portuguese].

Dec 22/05: Corruption? Patria alleges misconduct in Portuguese Pandur II deal. What’s more, they say they can prove it. Will that make a difference?