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Egypt breaks ammunition development contract with Russia - Izvestia newspaper

May 20, 2013, 13:13 UTC+3

The schedule of the creation of high-precision artillery shells has been nine times delayed, after which the Egyptians refused to cooperate

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The schedule of the creation of high-precision artillery shells has been nine times delayed, after which the Egyptians refused to cooperate.

A source in the Russian government the Izvestia daily that Egypt terminated the contract on the creation of a 155-mm guided shell for the US M-109 howitzers, which are used by the Egyptian army, after the schedule of its fulfilment was postponed nine times. As a result, Russia has lost one of the most promising weapons markets in the Middle East that is being actively developed by US companies.

“The Egyptians are tired of waiting and last year the contract was terminated. The information was not disclosed in order not to spoil the image of Russian weapons. The more so that the Egyptian side is also partly responsible for the delays,” said the source.

It was planned to create the shells for the Egyptians using the solutions of the Russian Santimetr-M (Centimetre-M) 152-mm projectile developed by the Russian company Ametech that was just to be increased to the desired size. However, the Egyptians refused to provide to the Russian designers documentation on the M-109, referring to the terms of the agreement with the United States. Due to this, the designers had to act randomly and actually create the projective anew.

“We did not know the ballistic solutions of this howitzer: the parameters of the projectile movement in the cannon, the change in pressure over time. We had to calculate everything ourselves and refine empirically, changing the structure several times. If we had the documents from the very beginning, we would immediately make the desired projectile,” Ametech Director General Vladimir Vishnevsky explained.

He added that the value of the contract was also initially understated - the Rosoboronexport arms exporting company through which all defence enterprises are required to enter into foreign contracts, considered that 20 million US dollars would be enough for the Russian projectile’s adjustment for the American calibre, however, as a result Ametech had to spend almost 600 million US dollars (2.5 billion roubles), which were provided to the company by Rosoboronexport in the form of loans at 12 percent annual interest.

Director of the Institute for Strategic Assessments Alexander Konovalov told the Izvestia daily that the problem with the Egyptian contract arose because of the dumping of Rosoboronexport that was trying to return the Egyptian arms market.

“The market had to be returned by any means, and therefore such a price was offered. But a dumping attempt always leads to the same situation where the contract money is spent yesterday, but the tests are not completed yet, and a lot of complicated work and research are yet to be done. And so we have to invest our own money. So it happened this time,” Konovalov said.

The head of the Centre for Analysis of World Arms Trade Igor Korotchenko told the Izvestia newspaper that in the next 2-3 years no serious arms purchases are to be expected from Egypt.

“After the revolution and the change of president the social programs are coming to the fore. So until Egypt settles this issue it will not buy weapons,” said Korotchenko.

He believes that Russia still has prospects for military-technical cooperation with Egypt, primarily in the sphere of supply to the country of military-transport helicopters and air defence systems.

Rosoboronexport believes that the incident with the contract has not affected in any way the two countries’ military-technical relations.

“Let bygones be bygones. Everything is mended now. We are currently developing active military cooperation with Egypt and are forging new ties,” a representative of Rosoboronexport tol the said Izvestia daily.

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