Czech military overpaid for CASA planes, MoD docs show

Czechs have come to expect inflated prices in public procurement deals, but even the most cynical observers were taken aback by the Defense Ministry’s purchase of four CASA C-295M transport planes. Hiding behind nondisclosure clauses that prevent scrutiny of the real costs, officials and politicians responsible for such purchase routinely explain that state-of-the-art technology is expensive. However, Czech Position has obtained documents that confirm suspicions of grossly inflated prices on the CASA deal.

Back in 2006, a market study showed the Czech Republic could obtain four CASA transport planes from the EADS consortium for Kč 2.83 billion. Three years later, however, in May 2009, the Defense Ministry concluded a contract to buy three of the same aircraft through the Czech arms dealer Omnipol — under similar delivery conditions and without holding a tender — for Kč 3.577 billion. The final price per unit turned out to be even higher, as the Czech side had in fact traded five L-159 fighters for one of the planes.

The 2006 market study was prepared by the Defense Ministry’s own experts, who approached four global manufacturers of transport aircraft — Alenia Aeronautica (Italy), Antonov (Ukraine), EADS CASA (Spain) and Lockheed Martin (US) — about terms for the delivery of four comparable aircraft. During the negotiations, the Czechs ruled out the AN-74s from Ukraine planes (which weren’t designed according to Western standards or up to snuff as far as NATO regulations and compatibility) and the four-engine C-130s from the US (which were deemed too expensive).

Comparison of bids in 2006

Note: Prices are stated in the millions of crowns and based on an exchange rate of Kč 25/USD and Kč 29/EUR. The cost included the delivery of four aircraft, logistical support, documentation, the training of personnel (pilots and ground staff) and related services. VAT and margins for intermediaries’ fees not included.

In a hypothetical final contest between the Spanish Casa C-295M and the Italian C-27J Spartans, the final cost for the latter would have been some Kč 220 million higher (see table) and delivery would have come in two years rather than in one year. More important, however, are the technical capabilities of the respective aircraft, in which case the Spartans prevail.

“The C-295M does not meet (albeit only marginally) some importance tactical-technical requirements of the contractor, in particular the requirements for the maximum range, maximum payload and number of patients transported on a stretcher [editor’s note: recent Czech participation in NATO missions have entailed running field hospitals]. The C-27J fully met the contractor’s requirements,” the Defense Ministry said. According to the study, the sole advantage of the CASA aircraft was its longer operating lifespan.

Comparison of tactical-technical parameters

According to the findings of the Czech Supreme Audit Office (NKÚ), which has examined past questionable military purchases, representatives of the Czech Army general staff didn’t want the CASA planes.

“Acquisition of the four tactical CASA aircraft is not the end solution for replenishing the Czech Army transport fleet, in light of operational and operational-tactical conditions, due to the range of the aircraft, and the load capacity does not adequately fully address the Czech Army’s requirements. It would be necessary to acquire another two planes to meet the higher load capacity requirements,” NKÚ experts said citing a review by General Vlastimil Pick from 2008. But despite the technical shortcomings (see table), the CASA purchase went ahead.