Bulgaria's Defence Ministry signed a deal on February 24 to buy five C-27J Spartan transport aircrafts from Alenia Aeronautica, a unit of Italy's Finmeccanica, for 91 million euro.

The deal is a part of ongoing modernisation of Bulgaria's armed forces equipment.

The country will get the first aircraft by August 2007 and will receive one aircraft each year until 2011.

Bulgaria joined NATO in 2004, and since then the two governments have downsized in the armed forces upgrade plan to three projects from the 11 initially designed in 2004. The three priority projects include the purchase of vehicles, helicopters and transport aircraft for the army, worth an estimated total of about 700 million euro.

The Cabinet reduced last year its order to Alenia Aeronautica from eight to five Spartan C-27J planes due to budget shortage.

"With the help of the Spartan aircraft we would be able to transport troops, armament and equipment to long distances, take part in rescue operations and help people in accidents and natural disasters," Defence Minister Vesselin Bliznakov said after the signing ceremony.

He paid special attention to the accompanying offset agreement, which, in his words, was equal to 243 per cent of the project's value. The direct offset agreement amounts to 152.3 million euro.

The obligations under that programme include financing of the construction of a new hangar for aircraft maintenance and office buildings for the squadron at Vrazhdebna air base (near Sofia), special equipment for technical surveys, providing equipment for field maintenance of the aircraft and spare parts and training of personnel, Bliznakov said.

The indirect offset programme amounts to 70.7 million euro. It calls for investments in Bulgaria and exports of Bulgarian-made machines, software, technical infrastructure and energy.

Bliznakov said that Bulgaria might consider buying three more Alenia Aeronautica aircraft, as initially agreed with the company.

Spending restrictions have also made Bulgaria prefer to upgrade its Soviet-built MiG-29 fighters and delay the purchase of new fighters.

A 40-million-euro deal with Russian manufacturer RSK MiG for the overhaul of 16 MiG-29s was expected to be signed in January. Instead, it would be signed most probably by mid-March.

Meanwhile, Bulgaria is in contractual relations with Israeli company Elbit Systems, which will repair and upgrade Mi-17 and Mi-24 Soviet-made helicopters to bring them in line with NATO standards.

On February 21, Elbit subcontracted Bulgaria's TEREM military plants for the helicopter repair and upgrade procedure. TEREM executive director Marian Yovchev and Elbit vice president Menahem Bargev signed the agreement.

TEREM will receive 13 million leva (about seven million euro) under the three-year agreement. Supplementary agreements worth between four and five million leva are expected to be signed by September or October.

TEREM will be involved in the project through its Letets plant in Sofia and its Georgi Benkovski plant in Plovdiv. Only system design and avionic equipment integration will be carried out in Israel.