Ukrainian Officials Deny Lying About Botched Arms Contract with Iraq

Zerkalo Nedeli, an influential Ukrainian weekly, has accused the country’s Defense Minister Dmytro Salamatin of misinforming President Viktor Yanukovych over a contract to deliver armored personnel carriers to Iraq. Salamatin reportedly lied when he wrote to Yanukovych last month, citing Iraq’s ambassador to Kyiv that Iraqi Prime Minister Nouri al-Maliki agreed to extend the contract, worth some $450 million, which Ukraine failed to implement. Zerkalo Nedeli also claimed Ukraine’s defense industry is behind schedule regarding several more lucrative contracts, (Zerkalo Nedeli, August 31). The defense ministry and the arms exporter, Ukrspecexport, dismissed the report; yet, it is clear that Ukraine has not fulfilled the contract with Iraq on schedule and that its international reputation as an arms supplier is under threat as a result.

The contract for Kyiv to deliver 420 BTR-4 armored personnel carriers and six An-32 military transport planes was signed in 2009. But it went awry almost from the start. In December 2010, Iraq refused to accept the first batch of the machines because of hardware shortcomings (see EDM, Febuary 3, 2011). The batch was delivered to Iraq only in spring 2011, and Ukraine was fined for the delay (Zerkalo Nedeli, August 31). Iraqi specialists also reportedly found faults with the second batch of 62 BTR-4s this past spring, in particular with the Parus weapon stations installed on them. However, the state defense industry concern Ukroboronprom denied this, saying that everything proceeded according to plan (UNIAN, May 21).

Iraq also apparently did not receive the second batch on time. The 62 BTR-4s arrived at the Odessa seaport for delivery to Iraq by last June, but no delivery took place because the contract with Iraq expired in March, so a delivery would have been illegal. Salamatin admitted in a letter to Yanukovych from August 9, whose copy Zerkalo Nedeli published on August 31, that Iraqi Ambassador Shorsh Khalid Said complained about the delay. Salamatin also cited the ambassador as saying that “clouds have been dispelled” over the contract as al-Maliki had signed documents to extend it. Zerkalo Nedeli said that al-Maliki did not sign any documents on the contract so it was not extended, and the paper accused Salamatin of lying.

Zerkalo Nedeli criticized Minister Salamatin and Ukrspecexport chief Dmytro Perehudov for replacing intermediaries in the Iraq contract and also in a December 2008 contract to deliver two air cushion landing ships to China. The newspaper further claimed on August 31 that Ukrainian arms makers suffer losses from seemingly lucrative foreign contracts—and suggested Ukroboronprom chief Serhy Hromov be fired as a scapegoat. Zerkalo Nedeli also warned that Ukrspecexport, apart from the Iraqi and Chinese contracts, might be unable to deliver on contacts to sell BTRs worth $256 million and Oplot tanks worth $156 million to Thailand as well as T-72M tanks worth $137 million to Ethiopia.

The Defense Ministry’s press service has insisted that everything contained in Salamatin’s letter to Yanukovych was true and condemned “a dirty campaign to discredit Salamatin” (mil.gov.ua, September 1). Ukrspecexport’s press service on its website cited Shorsh Khalid Said as saying in an interview with Interfax that the contract on the An-32 planes had been successfully implemented while the Iraqi defense authorities and Ukrspecexport settled the problems regarding the BTR-4s (ukrspecexport.com, September 3).

Perehudov claimed that the article in Zerkalo Nedeli was intended to discredit Ukraine as an arms exporter and he suggested that “the misinformation campaign” could be “orchestrated from abroad.” He also accused unnamed domestic businessmen of trying to revive the schemes involving intermediaries that damaged Ukraine’s interests in the past and he suggested that they unlawfully obtained contract information from Ukrspecexport before leaking it to the media. Commenting on Zerkalo Nedeli’s argument that al-Maliki did not sign any documents on the contract extension, Perehudov said that the original contract was signed in 2009 also not by the prime minister, but by an official from the Iraqi Defense Ministry so al-Maliki was not supposed to sign any documents related to the contract (Interfax-Ukraine, September 3).

Zerkalo Nedeli, which sympathizes with the opposition, has been very critical of Salamatin who is linked to the ruling Party of Regions and of Ukroboronprom, which Salamatin headed before his appointment as defense minister last February. Anatoly Hrytsenko, the chairman of the parliament’s security committee and a former defense minister, who happens to be the husband of Zerkalo Nedeli’s editor Yulia Mostova, predicted last May that Salamatin would be dismissed within two months (liga.net, May 21). This has not happened yet. Whether or not Yanukovych will fire Salamatin, the problems with the Iraqi contract have badly damaged Ukraine’s reputation as an arms maker and exporter after several very successful years when the country managed to conclude lucrative arms delivery contracts with a number of Asian and African countries. Ukraine was the world’s 12th largest arms exporter in 2007–2011, according to the Stockholm International Peace Research Institute, accounting for two percent of deliveries.