PARIS Oct 11 Airbus Helicopters hit
back on Tuesday at Poland's decision to cancel a
multi-billion-dollar military helicopter deal, deepening a
defence procurement row that has soured relations between France
and its eastern European NATO ally.
In an open letter to the country's prime minister, Europe's
largest aerospace group accused the Warsaw government of
shifting the goalposts as Airbus competed with U.S. and Italian
rivals and attempting to contravene European Union regulations.
Airbus Helicopters Chief Executive Guillaume Faury said the
deal would have led to the creation of 3,800 local jobs and
generated more value for Poland than for Airbus itself.
Poland's previous centrist government, which was beaten by
the Law and Justice (PiS) party in elections last October, had
provisionally agreed with Airbus to buy 50 of its Caracal
multi-role helicopters in April 2015 as part of efforts to
modernize its military at a time of tensions with Russia. But on
Oct. 4 the new administration said it was scrapping the
France reacted angrily, saying Paris would review defence
cooperation with Poland and cancelling a presidential visit to
Lifting the lid on the typical secrecy surrounding defence
contracts and the economic trade-offs or "offsets" that
typically go with them, Faury said the decision to cancel the
deal came a day after Airbus had offered new concessions.
He said Airbus Helicopters had offered offsets worth more
than the net value of the helicopters, or 10.8 billion zlotys
He also said the ministry of development had slapped an
additional 23 percent in value-added tax (VAT) on the deal,
bringing the overall value to 13.4 billion zlotys.
"Although compensation of a value-added tax through offset
is not standard practice, Airbus Helicopters agreed to
compensate this gross value," the letter said.
He said the ministry had also introduced other new
requirements in August, some of which Airbus had been unable to
meet because they contravened European Union regulations, but
did not give any details.
Polish officials were not immediately available to comment.
Airbus said the deal would have led to the transfer of 45
items of security-sensitive technology and provided 30 years of
work for state-owned companies, modernising an industry
depending on servicing "old-generation Russian helicopters".
Faury claimed Airbus had gone further than its rivals,
Lockheed Martin's Sikorsky and Italy's Leonardo
in offering a state-owned assembly plant.
"Airbus Helicopters offered a full H225M Caracal assembly
line mirroring the capabilities of the existing French
facility," he said, adding it had also promised a parts
production plant worth 370 million zlotys.
Parent Airbus Group says it employs 900 people in Poland and
spends 204 million euros annually there.
A French source said last week the French government, which
holds 11 percent in Airbus Group, would advise it to review its
strategy in Poland, including investments already made. Airbus
($1 = 3.8193 zlotys)
(Editing by Greg Mahlich)