The games of the Ministry of National Defence with the WISŁA Program and the export of polish arms industry

18 czerwca 2014, 17:09

A few days ago ‘Rzeczpospolita’ published an article which speaks of Ministry persuading Polish Defence Holding to leave the consortium – of which the PDH is a leader – that is applying for realisation of anti-aircraft and anti-missile defence system “Wisła”. It would automatically mean the breakdown of the consortium under the PDH leadership and eliminating the competition of French suppliers as well as MBDA and Thales. It seems that the Ministry counts on the conciliatory attitude of the PDH management.

All in all, Ministry did not have to announce the tender for the anti-aircraft and anti-missile defence system, because according to the Article 346 of the TFEU it can choose one contractor and with whom it conducts the negotiations. The signal which is sent by Ministry is clear – we don’t want French companies and Polish arms industry for such important project. Israel’s offer actually does not count. In Polish reality nobody would actually take a risk choosing MEADS, because such a decision requires quite some courage and, admittedly, the amount of money to spent is large. In case of any kind of failure, one may not leave the premises of our brave Public Prosecutor’s Office and other institutions. An experienced supplier holds the fort.

Personally, I got converted to American investments some time ago. While observing workings of Mielec, WSK Rzeszów and Hydral Wrocław I realized, how much progress has been made thanks to American investments. It looks no worse than European ones.

American ntrepreneurs  are pragmatists – why invest more, when you can put in less. They are very experienced in all kinds of projects. One of the fundamental rules of investing is ‘promises aren’t expensive’. And even although the media (especially Twitter) are full of guarantees of this supplier and other bidders – also about striving to polonize this project as much as possible – the final result is important. The point of this may be expressed by an old rule of psychology, according to which when you already have something it’s pointless to work for it any longer.

It’s easy to guess that that in the Poland’s altered geostrategic situation we will be speeding up the realization of Project Wisła. With information on pressure from the Ministry of National Defense and, moreover, in the event of PDH  leaving the consortium, one can be almost certain of the victory. The negotiations are conducted in a completely different manner, when we are aware that the ordering party have to buy our product. In this case many of the promised obligations are forfeited or are formulated in a way that enable to incur the lowest expenses. It’s obvious, that the supplier has no interest in locating the production at the ordering party’s premises, if he can reasonably manage on his own. In the arms industry, the pressure from the governments and the offset transactions caused the suppliers to locate substantial part of the production within the territory of the orderer country and made them interested in seeking cooperation with local partners.

When the government does not insist on local production and cooperation with local industry, it gets nothing. Sometimes, it happens that the government is forced into corner because it doesn’t have the possibility to buy the appropriate armament. Then it’s forced to pay any price. I’m afraid, that Poland found itself in such a situation due to Ministry’s actions aimed at getting rid of the Polish-French competition for this well-known supplier. Sad but unfortunately true. I believe that the offer of this well-known supplier could be one of the best, maybe even the best, from the military’s viewpoint. However, Poland of its own volition cannot strip itself of the arguments for serious negotiations of – and that’s what happened, unfortunately.

Recently, some of the well-respected newspapers like ‘Rzeczposolita’ and ‘Dziennik Gazeta Prawna’ published articles on the export of Polish arms industry. The popular diagnosis of the cause of massive decrease in export seems to be attributed to the following facts: cuts on the military orders in many countries, lack of a suitable trade offer of Polish companies, shortfall of innovative products. Whereas, the truth is different. Export of the factories that have foreign owners (Mielec, Świdnik), supported by the owner’s marketing efforts, is doing well and there are chances of an increase. Export of the private producers isn’t too bad as well, e.g. Lubawa, WZE – which Malaysian contract deserves acknowledgement. However, export of the branch of arms industry controlled by the State Treasury was floored, especially in the years 2007-2008. Unfortunately, its subsequent rebuilt boiled down to the lectures by Mr … … during the trade fairs in Kielce.

Let me digress. In the first half of March this year, in the international capital of lawyers – London – during one of the conferences I’ve met well known and respected federal attorney. This distinguished lawyer for many years provides his services to major arms companies of his country. It happened during the activities of ‘green men’ on certain peninsula, but before its incorporation. During the conversation we’ve brushed upon a topic of  arms industry:

  • You know what, Jarek, in the middle of last decade, we’ve had serious trouble with realization of few contracts with the world’s biggest armament importer. We were afraid that you would take over two of our contracts’.
  • So what happened?-  I asked.
  • You helped us by yourself, as always, was the answer.
  • Do you know … …?
  • I think so. He’s a very talented young man- I replied.
  • He is the one that helped us. You would have to wait for a long time for the trust to rebuild.
  • And did you give this young …  any suitable remuneration? -  I’ve asked  at the end of the meeting.
  • No. That’s the best part – he answered. In that moment, when I looked into those cold, ruthless eyes, I’ve got scared. Were we such stupid ‘till the end?

I’m writing above words as a cautionary for persons, who have the possibility to decide the matters of Polish arms industry – we’ve lost the income from the export mostly of our own volition. And to rebuilt that, we have to rebuild the trust for Polish arms industry and for Poland.

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