IN what has been described as a choice of political allies, the Bulgarian Government will have to make a decision in the next few months on a supplier of about 20 fighters for the country's armed forces.

Two of the candidates to become suppliers - Lockheed Martin of the US and Sweden's Gripen International - already made their first public presentation in the past 10 days and showed that the competition will be fierce.

In addition to them, more of the world's largest aircraft manufacturers are expected to pursue the fighter jet contract that the Defence Ministry is preparing to award.

The potential for serious inflow of additional investment was revealed by the business intentions of both Lockheed Martin and Gripen. The two intend to bring in dozens of Swedish, US and South Korean companies for the implementation of projects in Bulgaria as part of an offset contract that will be a component of the fighter acquisition.

The fighter procurement procedure, expected to get underway by the end of 2005 and take almost two years to complete, is the most expensive upgrade project of the Bulgarian armed forces, estimated at more than a billion US dollars.

William E Perkins, the Lockheed Martin vice president for Central Europe, gave a presentation on September 1 in Sofia on his company's offer to deliver a modernised version of F-16 C/D Block 50/52 fighters at a price of $45 million for each unit. The value goes up to about $70 million if the fighter is fully equipped.

The Cabinet has demanded that the investments on the offset programmes be at least 80 per cent of the deal's total value. Provided that the projected value of the deal is between $1.1 billion and $1.4 billion on direct and indirect offset programmes, other US companies will invest in Bulgaria between $870 million and $1.1 billion.

In support of their proposal, Perkins said Lockheed Martin had implemented offset contracts in 40 countries so far. Perkins mentioned the deal with the Polish Air Force for 48 F-16 fighters, after which Lockheed Martin arranged the construction of a General Motors factory in Poland.

In his view, the F-16s are cheap to maintain and may carry 40 per cent more weapons than the corresponding Gripen fighters. F-16s have been ordered by Israel, Greece, South Korea, United Arab Emirates, Singapore, Chile, Oman and Poland.
The F-16 aircraft was introduced in various military forces in 1990, and since then has undergone seven modifications and five generations of renovated aeronautical equipment.

Competition for the selection of a fighter for the BAF is expected to be declared by the end of 2005 and to be concluded by mid-2007.
Gripen said it had a similar approach to offset schemes. The company said that there would be agreements between the country buying the jets and Investor Group, the biggest public holding in Sweden which has Saab, Ericsson, Electrolux, Scania, Volvo and SKF among its members.

Gripen's fighters are in service with the Swedish and the Czech Republic's air forces. Units have also been ordered by the South African and Hungarian military commands. The UK's Empire Test Pilots' School is also operating Gripens, as well as its advanced fast jet training platform for test pilots worldwide.

In an interview with the Bulgarian news portal Mediapool.bg on September 2, Gripen International marketing and sales director Bob Kemp said the selection of the supplier of fighters for the Bulgarian armed forces would also be a choice of political allies for this country.
"In this project for selecting a supplier of multi-purpose fighters we see an opportunity for your country to show which will be its political allies in the future. In the case of Hungary and the Czech Republic, where the presence of Gripen International is successful, their governments wanted to show that they are part of new Europe," Kemp said. However, he also pointed to the UK, where, in spite of buying Eurofighter units, authorities will also acquire F-35s to honour their special relations with the US.

"We are hoping that Bulgaria will prefer a similar European solution for its future," Kemp said.

He said that the Gripen is the only multi-purpose fighter of the newest generation sold on the market today, which is already used in NATO. "When you are about to implement a project worth billions, our view is that you have to invest in the newest products and technologies, which have 30 to 40 years of the future. It is hard for us to understand why someone would spend the same money on a technology, which is already 30-40 years old," Kemp said.