Defense leaders shift blame over failed ammunition deal

Representatives of Estonia’s Defence Ministry and its state defence investment centre traded responsibility for problems in defence procurements at a parliamentary special committee hearing, ERR reported. The Defence Forces also acknowledged that they lack a modern inventory management system.

The hearing examined confusion in the defence sector’s accounting, following a National Audit Office report that highlighted serious problems in the field.

It emerged that Estonia had paid Indian companies 70 million euros in advance for shells intended for Ukraine, even though the companies had never previously sold a single shell. Instead of military supplies, Estonia received repeated promises, and the dispute is now in court.

The National Audit Office criticised the State Defence Investment Centre, known as RKIK, which is responsible for procurements, for failing to provide the contract for the 70 million euro shell deal despite repeated requests. RKIK said the contract had been sent on June 5, while the National Audit Office maintained that it had not received it. The hearing did not establish which side was correct.

RKIK also declined to comment on the contract terms at the hearing, citing confidentiality provisions.

Urmas Reinsalu of Isamaa, who chaired the hearing, asked Defence Minister Hanno Pevkur why the contract had not been made available to the National Audit Office.

Pevkur said he could not recall all the details but believed that some contracts contained confidentiality clauses agreed with suppliers. He added that RKIK could provide a more precise explanation, while stressing that, in his view, the National Audit Office should receive the contracts.

Reinsalu pointed out that advance payments had been made to a company with no previous experience in producing ammunition. He asked whether the contracts had been presented in writing to the defence minister and whether the decisions had been documented.

Defence Ministry Secretary General Kaimo Kuusk said procurements were RKIK’s responsibility and that the centre also assessed the associated risks.

“Advance payments do not come to the minister’s decision-making meeting; that is not how it works,” Kuusk said.

Reinsalu asked whether the government cabinet had been informed of the risks related to the intermediary contracts. Pevkur said the cabinet had discussed aid to Ukraine more broadly, including how to implement an initiative involving one million shells and how to purchase supplies for Ukraine with the help of foreign donors.

According to Pevkur, implementation was assigned entirely to RKIK. The centre negotiated with the European Commission and donors, agreed on financing terms and searched for supplies on the global market.

When Reinsalu again asked whether the minister’s position was that no memorandum on the risks had been submitted to the cabinet, Pevkur said the activity was ordinary business conducted by RKIK. Reinsalu interpreted this as a negative answer.

Kuusk said information about the failed contract had also been shared with the Internal Security Service and that officials had communicated with the ambassadors of countries connected to the contract. Once it became clear that the deal would not produce results, RKIK was instructed to terminate the contract and take the matter to court, he said.

Asked how Estonia came into contact with the problematic companies, Pevkur said the ministry had trusted RKIK, while the ministry had given general instructions to find assistance for Ukraine.

Minister says he does not choose contractors

Pevkur confirmed that he had not personally read the problematic contract. Kuusk stressed that negotiations fell within RKIK’s remit.

Kuusk said the Internal Security Service had been contacted after delivery deadlines had been missed in every respect and the then RKIK leadership had continued to say that the deliveries would still be completed. The source article ends during his explanation.