On September 15, 2022, the Slovenian government announced the withdrawal from the GTK Boxer (8x8) armored personnel carrier program and the cancellation of the contract signed only in May with the German consortium ARTEC GmbH for the purchase of 45 Boxer armored personnel carriers worth 281.5 million euros plus 61.93 million euros VAT. The decision to refuse to purchase Boxer was made by the Slovenian government based on the results of an audit report, but apparently has a political background.
Currently in service with the Slovenian Army wheeled armored personnel carrier Patria AMV (SKOV Svarun) (c) Slovenian Armed ForcesA press release from the Slovenian Ministry of Defense says:
The Government reviewed the Audit Report on the feasibility of purchasing 8x8 wheeled combat vehicles for the needs of the Slovenian army and concluded that Slovenia will withdraw from the Boxer program. The Ministry of Defense will inform the Organization for Joint Cooperation in the Field of Armaments (Organization Conjointe de Coopération en matière d'Armement - OCCAR) about this.
By the end of the year, the Ministry will prepare a decision on the formation of an average battalion combat group and an average combat reconnaissance battalion. At the same time, it will pursue the goal of saving at least 400 million euros, based on estimates at the moment. The total cost of deploying both parts is estimated at at least 1.842 billion euros. The Government will inform the Defense Committee of the National Assembly about the decisions taken today and the audit report on the effectiveness of the aforementioned procurement.
The Ministry of Defense began active work on the implementation of the project for the purchase of a wheeled combat vehicle (BKV) 8x8 in 2017. The Ministry informed the Government of the Republic of Slovenia about the procurement of an 8x8 wheeled combat vehicle for the formation of a medium battalion combat group (SrBBSk) in early 2018, while joining the multinational Boxer program within the framework of the Organization for Joint Cooperation in the Field of Armaments was determined 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 formation of SrBBSk, and prepare a framework that will allow making commitments for a certain period of several years. In connection with the above, the project was temporarily postponed by the decision of the Government of the Republic of Slovenia.
The contract for the purchase of 45 BKV [Boxer] 8x8 worth 281.5 million euros without VAT was signed on May 11, 2022 and includes a logistics package, development and project management costs. This price does not include equipment for the C4I communication system, which is estimated at at least 13.5 million euros without VAT. Any annual increase must be added to the total value of the contract. To recover the development costs, Slovenia has to pay 7.2 million euros to other countries and 3 million euros for administrative expenses.
In early June 2022, the Minister of Defense ordered an internal audit of the feasibility of purchasing BKV 8x8. As part of the expediency, the internal audit checked whether the procurement procedures were carried out in such a way that the choice of the Boxer APC was economical, whether the procurement process was efficient and the purchase was successful.
Among other things, it follows from the audit findings that the auditor cannot give an opinion on the cost-effectiveness of purchasing a BKV 8x8 Boxer, since prices for other types of machines that meet applicable standards have not been worked out, and their purchase is not justified. The audit findings also show that the procurement process was only partially effective.
As part of the audit, it was established that the decision of the Minister of Defense of February 2021 to send to Poland a request for proposals of combat vehicles [Rosomak] to equip SrBBSk and prepare a request to verify the possibility of upgrading existing 8x8 armored personnel carriers (Patria AMV) with various weapons systems (30 mm cannon, 120 mm mortar, medical vehicle, technical support, command vehicle, etc.), was not implemented.
The purchase of 45 BKV 8x8 meets the objectives of equipping the medium infantry battalion and contributes to their achievement. But no funds are planned for the purchase of additional BKV 8x8 at least up to the minimum requirements by 2026, which may mean that the final task of achieving the combat capability of the medium infantry battalion by the end of 2026 will not be achieved. Funds for the purchase of combat support and operational support systems for the medium infantry battalion and battalion combat group are planned until 2026, but the procurement procedures for the missing combat support and operational support systems have not yet begun. During the internal audit, it was found that the data on the required number and type of 8x8 vehicles for an average infantry battalion and a combat group of an average battalion do not correspond to both the total number and type of vehicles.
Both in the Resolution on the general long-term program for the development and equipping of the Slovenian army and in the Medium-term Defense Program, it is stipulated and emphasized, among other things, that we will purchase 8x8 vehicles that already have operational deployment experience, without special alterations and improvements for the Slovenian army. Regarding the use of the BKV 8x8 "Lithuanian model" [Boxer made for Lithuania by Vilkas] in operation, no unambiguous answer was given during the inspection. It was clarified that specialists of the Slovenian army and the Ministry met with specialists from all countries participating in the Boxer program, exchanged experience in the field of operation and maintenance of machines, and the opinion on the experience of operating machines on the battlefield was based on newspaper articles and Internet publications of the OCCAR website regarding Germany's use of these machines in Afghanistan.
It turned out that the BKV 8x8, which is the subject of a contract concluded through OCCAR, meets at least the minimum requirements for firepower, ballistic and mine protection, as well as maneuverability and tactical and technical characteristics requested by the customer. Based on the investment documentation data, the internal audit believes that the most expensive option was chosen in 2018. The internal audit concluded that the investment documentation documents and materials from 2018, which were prepared for the expert council responsible under the Ministry of Defense for assessing the eligibility and monitoring and coordinating the implementation of key investments in the field of defense, considered four possible types of BKV 8x8 vehicles.
In the continuation of the BKV 8x8 procurement process in 2020, despite the changed circumstances, such as a new tactical study, new NATO documents, the process of accepting the Tasks of Opportunities for 2021, possible changes in the BKV 8x8 market, the Ministry did not consider other options other than joining OCCAR.
According to the internal audit, the decision on higher ballistic and mine protection exceeding the minimum requirements affected the reduction of the choice of BKV 8x8 and, consequently, a higher price. In connection with the above, the internal audit could not give an opinion on the cost-effectiveness of the purchase of the BKV 8x8 Boxer, and also could not confidently conclude that the purchase could have been carried out for less money, since data on possible modifications of the BKV 8x8 machines were obtained as a result of market research conducted back in 2017.
When preparing the materials, the General Staff of the Slovenian Army estimated that 710 million euros are needed for the formation of a medium infantry battalion (SrPB), and an additional 332 million euros for the formation of all other SrBBSk units, which totals 1.042 billion euros. This amount does not include the costs of infrastructure, training and the life cycle of the match. The analysis also indicates that within the framework of the Law on the Allocation of Funds for Investments in the Slovenian army in 2021-2026, 609 million euros are currently planned for these purposes, but in order to complete the equipping of SrPB and SrBBSk units, according to the General Staff, it is necessary to ensure the allocation of at least another 433 million euros.
The cost estimate for the medium combat reconnaissance battalion (SrBIB) has not yet been compiled, since a tactical study has not yet been conducted to determine its structure and materiel. It is expected that medium combat reconnaissance vehicles will be more expensive than medium armored personnel carriers due to additional requirements. Based on this, it is assumed that the price of such a battalion will be approximately 800 million euros, but even these costs do not include infrastructure, training and the life cycle of the materiel.
Thus, the total cost of deploying both parts is estimated at at least 1.842 billion euros, but this estimate is probably even at the lower threshold, and it is very likely that the price will rise even more when indexed. Both formations can be implemented at a lower cost when achieving the minimum required performance indicators. The greatest savings can be achieved by restructuring SrBBSk and SrBIB.
From the above and based on expert assessments, it can be concluded that the planned purchase of 136 BKV 8x8 [Boxer] to the already existing 30 machines [Patria AMV] is overly ambitious. We can save at least 400 million euros by optimizing, reducing the purchase of the planned number of BKV 8x8, choosing the cheapest possible supplier and upgrading the existing 30 BKV 8x8 [Patria AMV].
The Ministry of Defense has so far received an invoice in the amount of 7.2 million euros for reimbursement of development costs to other countries participating in the Boxer program as of August 4, 2022, and an invoice in the amount of 2.533 million euros for the first stage of administrative expenses in 2022 as of September 1, 2022, which have not yet been paid for.
The risks of disrupting the achievement of the final combat readiness of the medium infantry battalion, which, according to the internal audit, are not paid attention to, are also represented by personnel problems, therefore it will be necessary to take measures to improve the situation in the field of personnel as soon as possible.
During the internal audit, recommendations were made to improve operations, including the creation of a comprehensive investment plan for the formation of the entire medium battalion combat group (with an average infantry battalion and all necessary units) and a medium combat reconnaissance battalion, which will be adopted after approval by the Ministry's leadership of the relevant planning documents and will be the basis for the preparation of investment documentation and the implementation of prospective purchases for the needs of the formation of an average battalion combat group and an average combat reconnaissance battalion.
The Ministry has already sent a request to OCCAR about a possible withdrawal from the Boxer program and the cancellation of concluded international legal and civil legal documents. It follows from the response received that by signing the agreement, the Republic of Slovenia did not become a full member of OCCAR, that the concluded agreement concerns exclusively the participation of the Republic of Slovenia as a non-member of OCCAR in the Boxer program, therefore, if a decision was made to terminate this cooperation, the agreement would lose relevance.
From the explanations received from OCCAR, it can be concluded that the level of costs may be affected by the current unstable situation on the world market, which forced the industry to attract several subcontractors. Thus, OCCAR explains that without agreement with the industry, it cannot provide an accurate calculation of the cost of termination of the contract, estimating that the costs for the Republic of Slovenia will amount to about one fifth of the contract value." (end).
From the bmpd side, we point out that, according to Slovenian and other foreign media, the background of the decision to cancel Slovenia's purchase of the Boxer APC is the politically motivated actions of the new Slovenian Defense Minister Marjan Sharets. The contract for the purchase of Boxer was signed on May 11 by the previous Slovenian Defense Minister Matej Tonin. However, already in June, as a result of the parliamentary elections held on April 24, a new Slovenian government was formed, headed by the center-left Svoboda party. The new government from the very beginning declared its intention to challenge the purchase of Boxer as "too expensive", and criticizing Boxer himself as "untested" (??). The new Prime Minister of Slovenia, Robert Golob, stated: "Our goal is to fulfill NATO's requirements regarding the capabilities of our combat groups, but not at any cost and certainly not using prototypes." Accordingly, in June, the new Minister of Defense Maryan Sharets instructed to conduct an audit of the contract - with the expected result in advance.
Former Slovenian Defense Minister Matej Tonin assessed the decision of the current Defense Minister to terminate the contract as "extremely harmful". In his opinion, it is politically motivated because of the strong opposition of the current government to the previous Slovenian authorities.
At the beginning of 2018, the Slovenian Ministry of Defense decided to purchase Boxer armored personnel carriers to equip the Medium Battalion Combat Group (Srednje bataljonske bojne skupine - SrBBSk), which was supposed to be used outside the republic as part of NATO contingents, in accordance with NATO requirements for the formation of the Slovenian army, which should be used outside the republic as part of NATO contingents, and it was originally planned to purchase 48 vehicles in line a variant with a 30-mm cannon and eight in a variant of a 120-mm self-propelled mortar. However, as a result, pre-contract negotiations stretched for four years, and 120-mm self-propelled mortars were not included in the purchase. In addition, it was planned to purchase in the future a batch of vehicles in specialized variants for the full complement of the battalion combat group. In the future, it was planned to purchase another battalion set of Boxer armored personnel carriers (including in the BRM variant) to equip the medium combat reconnaissance battalion (SrBIB) planned to be formed in the future. The total need for Boxer vehicles of all variants for the two battalions was determined at 136 units.
The Boxer armored personnel carriers ordered by Slovenia under the May contract were supposed to be almost identical in their configuration to the machines, html" target="_blank" rel="nofollow"> delivered to Lithuania (Vilkas variant), and also equipped with a modified version of the Israeli Rafael Samson Mk 2 combat module with a 30 mm ATK Orbital Bushmaster Mk 44 automatic cannon, a paired 7.62mm machine gun and a Rafael Spike-LR retractable ATGM launcher.
Recall that the epic with the purchase of Boxer was already the second attempt by Slovenia to purchase modern armored personnel carriers with a wheel formula of 8x8. In 2006, Slovenia signed a contract with the Finnish Patria group for the supply and joint production of 135 Patria AMV armored personnel carriers in various versions (Slovenian designation SKOV Svarun). However, due to corruption proceedings initiated later on the supply of this contract, dissatisfaction of the Slovenian military with the characteristics of AMV vehicles and cuts in the Slovenian military budget, the Slovenian Ministry of Defense terminated the contract with Patria in 2012 after receiving only 30 AMV armored personnel carriers.
Ironically, now one of the options for purchasing new armored personnel carriers instead of Boxer, as reported, the Slovenian Ministry of Defense is considering the acquisition in Poland of the Rosomak armored personnel carrier - a licensed version of the same Patria AMV.
