Delivery of CAESAR howitzers: how shall we calculate what will the real share of Czech industry be?

Delivery of CAESAR howitzers: how shall we calculate what will the real share of Czech industry be?
29 / 09 / 2020, 10:00

The acquisition of the CAESAR self-propelled howitzers from the French company NEXTER was generally assessed as a good choice in June this year, according to available information. From a technical-tactical point of view, the solution of the carried gun has its advantages and disadvantages, which were compared with other offered systems, and are still the subject of discussions. The French solution offers a relatively low purchase price as an important argument, provided that several other conditions were met. One of the significant ones in the expected economic crisis is the share of the Czech defense industry in the contract. At least 40% has been talked about from the beginning - but no one seems to have dealt in too much detail on what basis these 40% (and more) should actually be calculated. Whether from the delivery as such or from the total costs including life cycle costs. It's a big difference.

For the Army, which is more interested in tactical and technical parameters, range, mobility, endurance, consumption, the question of the share of Czech industry has no immediate or direct significance, although there is no doubt that in a country where (not only) defense production runs well, the army has easier position. It is essential for CAESARs that they meet the military requirements: in addition to the ballistic performance of the new weapon, especially its installation on the Czech chassis 8x8 by the TATRA company. From the point of view of the Army, such a requirement is logical and guided primarily by the fact that the chassis of this brand are expanded in its service and the common maintenance logistics facilitates the reliable operation of the equipment. At the same time, the use of the Czech chassis will be an important part of the required Czech share in the contract: but from what will such a share be calculated?

See also: Czech Army’s Modernization Projects: the Self-Propelled Artillery

When the Supreme Audit Office (SAO) recently published its unflattering conclusions for the operation of military equipment in the years 2016-2018, it stated, among other things, that "when purchasing armored equipment, the MoD did not address life cycle costs." And the legacy of this unsatisfactory approach, which has been reflected in problems with the supply of spare parts and service, and as a result to an unsatisfactory degree of operability of military equipment, in a way persists and affects the contracts currently being negotiated.

It is clear from the definition that the costs associated with the life cycle of the purchased equipment are realized by the vast majority in the Czech Republic. No country wants to transport its military equipment abroad for maintenance, and it does not want to depend on the supply of spare parts from foreign partners. In times of crisis, even the best ally will inevitably think first and foremost of securing his own needs, and we would not behave differently. The Czech side logically wants to calculate this share purely from the supply of equipment itself when setting the requirement of a 40% share of the Czech defense industry in the contract.

But if the foreign partner approaches the contract differently and claims that he thought from the beginning that the 40% would be calculated not only from the acquisition costs, but also from the life cycle costs, we have a fundamental misunderstanding on the table, which quite dramatically affects the final form of the potential agreements. Czech participation in the life cycle can be (for example) 60% or more, and it is correct and completely desirable - but also expected and given in advance and at that moment a lower Czech participation in the delivery itself will be enough to achieve the required 40% of the whole. It is therefore a big question how the form of the agreement was set from the beginning in the acquisition project of NATO self-propelled guns 155 mm caliber and how the Czech requirement towards the French partner was formulated. It is a direct government-government purchase (G2G), which is a  suitable and effective form for this purpose. But if the Czech side counts on life-cycle costs in this acquisition, as not only the SAO recommended it, the requirement for Czech participation in the contract should probably have been more generous.

See also: French CAESAR cannons on a Czech chassis are a rational choice for the Czech Artillery

In addition to the chassis, Czech Republic can also produce armored cabins in Kopřivnice. It would be absurd if the new howitzers on the Czech chassis were to be equipped with cabins of foreign origin, and the Czech taxpayer would thus finance job opportunities abroad, while at home such opportunities would decrease. We know that today we are not able to provide for all the needs of our Armed Forces through our own industry, but if we can produce something, it is imperative to use domestic production. Moreover, if we produce the components in question in a quality that can withstand the world's toughest competition - but the domestic customer would be forced to choose foreign production due to a faulty trade strategy.

Tags of article

This website uses to provide services, personalize ads, and analyzing visitor cookies. By using this site you agree.More information