Parliament Ratifies Agreements on Performance of Contract for 8 F-16 Block Aircraft, Equipment, Armament

Jerusalem, 24 November, 2022 (TPS) -- SOFIA, 23.11.2022 (BTA)
Bulgaria’s Parliament on Wednesday voted, 159-45 with 3 abstentions, to ratify conclusively two agreements related to the performance of a contract for the acquisition of the first batch of eight F-16 Block 70 jet fighters and associated equipment and armament. The bill was carried on two readings.

One of the agreements is between the Bulgarian Defence Ministry and the Federal Reserve Bank of New York (FED/NY). The other agreement is between the Bulgarian Defence Ministry, the US Defense Security Cooperation Agency (DSCA) and the FED/NY and deals with certain accounts related to the financing of Foreign Military Sales by the Government of Bulgaria.

Under the agreements, the estimated cost is to be deposited in a Trust Fund Account of the Federal Government for all Bulgarian contracts for the acquisition of equipment under the Foreign Military Sales (FMS) programme.

The FMS programme makes it possible for part of the funds paid by Bulgaria to be deposited and invested through bank and investment accounts at the FED/NY and generate income for the Bulgarian State. The amount of funds that could be transferred in this way will be determined by the DSCA. Normally, the funds are invested in overnight deposits and Federal Treasury bills varying in maturity. Funds covering current settlements under the project for the next 90 days must be maintained in the Trust Fund Account.

On July 11, 2019, Bulgaria contracted the acquisition from Lockheed Martin of the US of eight multi-role F-16 Block 70 aircraft and associated support, munitions, Sidewinder AIM 9X Block II Missiles and associated material and services at a price of USD 1.2 billion. The first two jets were to be delivered in the middle of 2023 and the last two in the first quarter of 2024, but COVID-19 has delayed the implementation of the project.

The Debate

Rumen Gechev MP of BSP for Bulgaria: This transaction is unprofitable for the Bulgarian State, the contract is humiliating and endangers the Bulgarian Air force and our country’s security. Nothing has been manufactured so far, the money is there and is invested and reinvested by the US, this is a disgraceful contract. As of today’s date, performance is delayed by more than two years, we have lost hundreds of millions of dollars, and the Air Force will probably be left without aircraft next year. The Bulgarian State will earn peanuts from this transaction, this is a pathetic PR stunt. By opening this account, we link the Defence Ministry budget with the US budget, the money is not there to cover American debts, and the aircraft are not there, either.

Nikolay Drenchev MP of Vazrazhdane: De facto, we have purchased a promise. This is particularly tragic in the context of the bad condition of the Bulgarian Air Force. We task the Defence Ministry with speculating with Bulgarian taxpayers’ money. I can’t see the place and the role of Bulgarian defence in this transaction. This is yet another mockery of our military aviation and defence. We should not confer extrinsic functions on the Defence Ministry.

Parliamentary Defence Committee Chair Hristo Gadzhev MP of GERB-UDF: In the estimates of the Defence Ministry and the central bank, Bulgaria has so far lost nearly BGN 20 million in gains foregone because of this foot-dragging over a year and a half. Nobody took any action. The bill has been tabled to the National Assembly thrice but nothing has been done and it has not been ratified. The money that has been credited for the performance of the 2019 contract will be moved to a deposit in a bank so as to generate liquidity and bring us a profit. The US Federal Reserve Bank is expected to raise its deposit interest rates any time now.

Atanas Slavov MP of Democratic Bulgaria: Facts should not be misrepresented. Democratic Bulgaria will continue to stand up for the need to modernize not only military aviation but the Land Forces and the Navy as well. We have set a condition that at least 2% of GDP should be budgeted for defence.