India tightens up offset enforcement

by Jon Grevatt

According to MoD figures, discharged defence offsets in India (up until mid-October 2021) were valued at USD3.21 billion: a year-on-year increase of 65%. The figures also show that the MoD has rejected offset claims worth nearly USD480 million. (Indian MoD)

The Indian government is tightening up its enforcement of defence offsets, seeking to ensure that foreign contractors discharge obligations in line with commitments.

An offset official in the Ministry of Defence (MoD) in New Delhi has confirmed to Janes that the ministryt is taking a harder line with non-compliance. Warnings and possible penalties will be delivered to contractors who fail to perform in line with offset contracts, he said.

“The priority is to ensure that foreign contractors are discharging offsets … In the case of non-performance they will be penalised. If they are violating the terms they should be penalised otherwise it will be a free-for-all,” said the official, who did not want to be identified.

His comments follow recent reports in India that the MoD's Defence Offset Management Wing (DOMW) has threated to ban one US contractor and has put another 11 firms on a ‘watchlist' for possible offset penalties.

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NVL Group launches construction of first new Bulgarian MMPV

by Aleksandar Mladenov

The steel cutting ceremony to launch construction of the first Bulgarian Navy Multipurpose Modular Patrol Vessel took place at the newly built workshop of MTG Dolphin in Varna, Bulgaria on 3 December. (Bulgarian MoD)

German shipbuilder NVL Group (formerly Lürssen Werft) held a steel cutting ceremony for the first of two Multipurpose Modular Patrol Vessels (MMPVs) on order for the Bulgarian Navy at the yard of its local shipbuilding partner MTG Dolphin in Varna, Bulgaria on 3 December.

The MMPVs are being built under a contract signed with NVL Group on 12 November 2020 valued at BGN820 million (USD473 million). The vessels are based on the NVL Group's OPV-90 model.

Under the contract terms, the first MMPV is expected to be handed over in the third quarter of 2025, followed by the second ship a year later.

The MMPV has a length of 90 m, a 13.5 m beam, and a displacement of 2,300 tonnes. Armament includes a 76 mm gun, four anti-ship missiles, eight anti-aircraft missiles in vertical launcher cells, a 35 mm close-in weapon station, and lightweight torpedoes. The integrated combat system is to be provided by Saab.

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Defence budgets surge across EU in 2020, but collaborative spending falters

by Brooks Tigner

Total collective defence spending across the 26 European Defence Agency (EDA) member states reached a record EUR198 billion (nearly USD223 billion) in 2020, a 5% rise compared with 2019 and the highest level since 2006, according to the agency's latest annual defence data survey released on 6 December. However, spending on joint defence procurement and research among the countries continues to decline.

The overall surge in EDA members' collective defence spending marks the sixth year of consecutive growth – and a rebound from the countries' low point in 2014 of only EUR159 billion. All EU countries, save Denmark, belong to the agency.

Collective defence investment, a crucial spending indicator, also hit a new high of EUR44 billion in 2020, or 5% more than the previous year. Moreover, it equalled 22% of the countries' total defence expenditure, placing them for the second year in a row above their agreed 20% collective benchmark for investment in defence capability and research.

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L3Harris divests Narda-MITEQ electronics business

by Marc Selinger

US defence contractor L3Harris Technologies has completed its previously disclosed sale of electronic parts supplier Narda-MITEQ to US private equity firm J F Lehman & Company (JFLCO), L3Harris announced on 7 December.

Narda-MITEQ, which was part of L3Harris' Aviation Systems segment, makes amplifiers, converters, switches, and other devices for military and commercial systems, including airborne, land, and sea radar; countermeasure, guidance, and surveillance systems; and ground-based and satellite communication systems. It employs about 400 people at three facilities in New York state, Germany, and Italy.

“We believe Narda-MITEQ is well-positioned for growth as an independent entity and are thrilled to support the company's pursuit of its organic and acquisitive growth initiatives,” JFLCO vice-president Ben Hatcher said.

The announcement came a little over a week after L3Harris completed the sale of radome manufacturer Electronic Space Systems Corporation (ESSCO) to US-based Communications & Power Industries. L3Harris first disclosed in late October that it had agreed to sell ESSCO and Narda-MITEQ for a combined USD130 million as part of a portfolio reshaping process.

Divestitures resulting from the two-year portfolio reshaping effort have generated total gross proceeds of about USD2.8 billion.

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