Croatia could spend up to USD 800 million for new fighter jets

After procurement of F-16 BARAKs from Israel fell through, Croatia turned towards negotiations with and procurement of F-16s from USA. According to available information, the Government is negotiating with US representatives on procurement of six new F-16 Block 50/52s or 70/72s. It is difficult to predict the price, but assessments range from USD 600 million and 800 million.

The package would include armaments, logistical support, training and modernization of infrastructure. Our interlocutors claim that, if everything goes to plan, negotiations with USA could end by the end of the year, which includes acquiring all required permits and signing all relevant contracts.

Agreement by 2020?

There is still no information on dynamics of delivery of fighter jets, but the agreement must be reached quickly considering the current state of Air Force's jets. Six fighter jets surely is not enough for protection of airspace and pilot training, but is an adequate start in the current situation, where the State does not have the money to buy at least one squadron.

According to available information, negotiations with USA are intense and underway, which Defense Minister Damir Krstičević confirmed yesterday, stressing that USA came forward with several options. However, the Minister said that he is leaning towards procurement of new F-16s after plans to procure used jets fell through. He openly said for the press that, in his opinion, procurement of F-16s is the best option.

-I prefer new but fewer jets as we have to spend taxpayer money in a responsible manner - said Krstičević and added that he expects USA to present Croatia as its partner with an offer it cannot refuse. Several hours later, before the Croatian Democratic Union (HDZ) Presidency meeting, head of HDZ caucus Branko Bačić commented on Krstičević's statement, noting that "this is one point of view - the Minister may propose ideas, but the Government makes the decisions."

Little information

There is little information on what Croatia could buy, but Defense Minister conceded that we are very close to reaching an agreement. However, as we have learned, USA still has not come forward with an official offer, where all details will be listed for the model or models that USA will offer, as well as specifics of the package and price. Since Krstičević revealed his plans to the public, we can predict that the State top decided to procure new jets, which will cost more money and Croatia will get fewer jets compared to Israel's offer. It is difficult to tell how many jets Croatia will buy. For instance, USA responded to the Defense Ministry's competition for procurement of fighter jets in 2017, offering 12 new F-16 Block 70/72s for approximately HRK 9.5 billion. However, it is difficult to expect that price of six such jets will be twice lower. In direct negotiations, each country negotiates price and package.

Slovakia's package

For instance, in mid-December last year, Slovakia signed an agreement worth USD 1.6 billion with USA, for purchase of 14 new F-16 V Block 70/72s. The package includes training for 22 pilots and 160 technicians as well as two years of Lockheed Martin's logistical support. On the other hand, Bulgarian Government started negotiations on procurement of eight new F-16 Block 70/72s. This means that Slovakia will pay some USD 114 million per jet, while Bulgaria will pay approximately 137 million.

Prime Minister Andrej Plenković implied yesterday that Government top changed its opinion with regard to procurement of fighter jets, noting at the Government session where last year's decision to buy F-16 BARAKs from Israel was annulled that the Government will choose a new model for fighter jet procurement after making an analysis. This was the first time that he announced the Government would not launch a new competition, but would opt for direct negotiations with a country. This is in line with the conclusions of the Defense Council, which held a meeting before the Government session and advised the Government to choose a new model for multi-purpose fighter jet procurement. At the session, Chief of General Staff of the Armed Forces of the Republic of Croatia Mirko Šundov made a presentation on the state of the Air Force, which currently has eight MiG-21s at its disposal, of which three or four are operational at a given moment, and the jets are not expected to make it to 2024, which Ukraine claimed after the overhaul. It is even more illusory to expect that training will be good.