The famous English ships still don

The maintenance contract for the two military ships purchased by Romania from Great Britain four years ago should have been signed until the end of last year, but this didn’t happen not until today. This means that at four years from their delivery to the Romanian Military Marine the two reconditioned ships don’t benefit of maintenance, although they have already participated, under Romanian flag, to commune exercises with another NATO naval forces.    

Although the contracting parties, the  Ministry of Defense and the British company BAE Systems didn’t reach to any result until the expiry of the term, it was decided the extend of the term and, according to some sources from BAE, it is expected to reach to an end in two weeks the most.

On the other hand, the Ministry of Defense considers that it can’t be put the issue of exceeding of a term. “At the last CSAT, that took place at the half of December, it was decided not to be given a time limit in case of the maintenance contracts of the two ships. King Ferdinand and Queen Maria, because getting close to the deadline induces an extra pressure to the negotiators. Although, it was recommended that the negotiations to end as quick as possible.”, says Andreea Dumitru, spokesman of MApN.

The main inconvenient during the negotiations is the so called offset contract that is annexed to the maintenance contract. “We have a problem with the offset contract which will solve. We have to try to be capable of finalizing this problem”, said Expomil, regional marketing director for Europe and America, Bob Keen, at the end of last year, with the occasion of taking part at the military technique fair, The offset contract invoked by the BAE official, is in fact, the second contract of this type in the business of ships and it is annexed to the maintenance contract of the military ships. We remind, that in the armament and special material transactions, there are signed the so called offset contracts, in which the seller commits oneself to generate, in the benefit of the buyer, businesses or benefits equivalent with the value of deed of conveyance of armament.

Penalties to offset contracts

As the value of maintenance contracts raises up at a few tens of millions euro for a period of 15 years, according the offset contract, that is in the final stage of negotiations, BAE Systems must propose to the Romanian part businesses of the same value.  In order to assure that the proposed business will be accepted by the Romanian part, the officials from the British company solicited that the businesses to be a part from the contract. Another article that made the object of hard negotiations was the level of penalties for the failure of the contracts’ obligations. From our information, the level of penalties, finally agreed, reaches to 22 millions euro. Interesting is the fact that although they complained because of the legislation from the offset domain (which changed meanwhile) they are forced to bring businesses in the military domain in percentage of 80% and only 20% in the civil domain, at the negotiations for the second contract the British proposed businesses in the military domain in a higher percentage than the law allows. One of these is the implementation of an informatics system for acquisitions in the military domain called Epicos.

In the domain e-business, BAE wants to offer to the producers of equipments meant to the defense industry, access to the international market. In cooperation with the Greek company Epicos, BAE wants to offer electronic access to the Romanian companies in an auction system at which take part almost all the giants from the defense domain.

The club of armament producers

Epicos is a system of online acquisitions, which bases on the Exostar platform, set up in March 2000 by the companies BAE Systems, Boeing, Lockheed Martin, Raytheon, Rolls Royce. They offer an online market which puts in touch the producers, buyers and sellers from the entire world in order to realize new businesses opportunities and to initiate commercial transactions by Internet. Of course, Epicos is an exclusivist club, where priorities have the companies from the  NATO and UE states. The system offers the interested companies from Romania the possibility to participate at the international far reaching auctions, to see the business opportunities which appear in their activity field and to be seen by the big buyers companies of this kind of products.  On every week, through Exostar take place 175.000 transactions, the system being in measure to offer the companies from Romania access to the system of acquisitions of great companies from the defense domain. By the 100 top producers, 85 are now clients of one or more services of the Exostar system. In 2006, for example, to the Exostar network joined 11.000 new commercial partners. Negotiations not finalized in time The BAE Director for Romania, Alistair Castle, revealed that the main business stipulated for the carrying out of the obligations of offset at the contract of maintenance is a contract signed up with SC Avioane Craiova SA for the transformation of passenger aircrafts ATP in merchandise aircrafts, their modernization and hoarding to Craiova. In fact, it’s about the setting up of a new areal centre of the British company in the East Europe. Asked if the scheduled investments in this contract will be the first step to the privatization process of the company from Craiova, the BAE director stated that is too soon to pronounce about this subject.