​Doubts about Patriot

The Swedish Armed Forces’ main argument for the purchase of Patriot is that the air defence system protects Sweden against ballistic missiles.

However this week the New York Times published an article in which the Patriot’s capacity against ballistic missiles was put in doubt. On 4 November Houthi rebels in Yemen fired a Burqan 2 missile towards the capital of Saudi Arabia. As it flew towards Riyadh it was met by four Patriot missiles. Debris was strewn across the centre of the city and the official version is that the debris proves the missile was shot down.

However missile experts who have analysed pictures and film say the missile detonated close to the terminal building at Riyadh’s airport.

Only three days after the attack, Sweden’s government decided to choose the Patriot system and instructed the Swedish Defence Materiel Administration (FMV) to begin negotiations with the US.

Dagens Industri (DI) reports that its sources have said the Armed Forces can afford to buy 60-70 missiles for the Patriot system, and only a few of the advanced PAC-3 MSE, which cost SEK 50 million each. Last week DI reported that France and Eurosam quoted EUR 850 million for a package with SAMP/T, which covers Sweden’s entire air defence needs.

Bribery accused signed deal with Saab

In November 1998, the South African ANC government announced it would prioritise Saab’s offer, despite the need for 28 Gripen jets being questioned.

A decisive factor was support from the union Numsa and the movement Sanco. By December 1999 CEO of Saab, at the time, Bengt Halse, had signed the Gripen contract with South Africa. Six months earlier he had signed two other contracts for Saab, this time with Numsa and Sanco, both signed by Moses Mayekiso, a well-known union leader.

Prior to the state Seriti Commission, a leading critic Terry Crawford-Browne said he had information of suspect transactions between Saab and Mayekiso, with the aim of paying bribes to MPs to back the arms deal. This has not been proven and Saab denies the allegations.

SvD has now seen the previously confidential agreements. The second, with Numsa, was signed by Mayekiso, raising the question why, as Numsa was represented by other people. He also signed the contract as “industrial co-ordinator for Sweden”. When SvD speaks to Mayekiso, he says that he was a negotiator. He also refuses to answer if he was acting on behalf of Saab or the Numsa, or whether he was paid.

Meanwhile, Bengt Halse says that he does not know who Moses Mayekiso is, and does not remember him.

Gripen could replace Austria’s Eurofighter jets

Amid a dispute with Airbus (ed.), Austrian Defence Minister Hans Peter Doskozil said on Friday that the country’s 15 Eurofighter jets would be replaced early.

New fighter jets will be delivered between 2020 and 2023, and the current version of Saab’s Gripen is favoured to replace the Eurofighter.

Austria would like to strike a deal with Sweden, which via the Swedish Defence Materiel Administration, FMV, is offering 15 single-seater Gripen C, and three two-seater Gripen D jets, the version used by the Swedish Air Force.

Svenska Dagbladet (SvD) reports that Lockheed Martin’s F16 is also a potential candidate, and it is feasible that other alternatives could be in the running.

A deal will need to be struck by 2018 in order for deliveries to be made in 2020, and the Austrian government therefore intends to lease the aircraft to save time.

There is said to be broad political support in Austria to replace the Eurofighter jets, which could be significant as the country goes to the polls on 15 October.

Saab could have an advantage in that the Gripen is already used in two of Austria’s neighbouring countries, and is also being eyed by Slovakia.

Concern over long-term impact

After years of debate, six parties have agreed on a democracy criterion when evaluating arms sales. The new criterion will have an impact on Saab, the defence and security group, which reported sales of SKr 28.6 billion in 2016. Besides the Gripen fighter jet, one of Saab’s most important products is GlobalEye, the multi-role airborne surveillance system. Saab’s export market, which accounts for 60% of the group’s sales, is of huge importance to GlobalEye.

Douglas Lindahl, analyst at Kepler Chevreux, sees the new criterion as bad news for Saab, which has major interests in deals that could now be at risk.

Last year Saab was given the go-ahead to export GlobalEye to Saudi Arabia, which leads the intervention in Yemen, and the company views the Kingdom on the Arabian Peninsula as a growth market, according to Lindahl.

Saab does not wish to comment until it has more information, but a number of analysts DI has spoken to believe that Sweden will circumvent the rules, as it has done in the past, in order to protect its defence industry.

Meanwhile, Tommy Gustafsson-Rask, CEO of BAE Systems Hägglunds is positive to the fact that broad agreement has been reached after two years of uncertainty. Simultaenously, there is concern about the long-term impact of the criterion.

Submarine base to be sold

Joachim Kuylenstierna’s company Skälsö bought a submarine base on Gotland in 2004, when all the parliamentary parties agreed to scrap it. The Swedish state now wants to buy back the base and DI’s sources reveal that two prospective buyers have placed bids higher than that of the Swedish Fortifications Agency and the Armed Forces, including Russian businessman Vladimir Antonov, who was stopped from taking over Saab Automobile by Reinfeldt’s government and General Motors because of questionable business.

Liberal leader Jan Björklund is demanding that Defence Minister Peter Hultqvist acts to ensure the port does not end up in foreign hands. Hultqvist says, “I think it is correct for the authorities to request to buy the base and we are trying to push it to the point in which the Swedish state owns the base again.

After the reports financier Lars Carlström got in touch with DI. “Just spoke to Antonov, he has no knowledge about this. The seller is a compulsive liar who is spreading news, probably no other interests than the Armed Forces,” he writes in an email.

Saab hopes for Finnish order

While Finland faces no immediate military threat, the country is not naïve, says Jussi Niinistö, the defence minister to business daily Dagens Industri. With military activity increasing in the Baltic region in recent years, Finland is increasing the speed with which it can mobilise its forces. The country is also planning to invest billions in new fighter jets and warships in the coming years.

Finland has sent requests for information regarding the replacement of Hornet aircraft to Britain, France, Sweden and the United States, and Saab’s Anders Garberg is doing all he can to ensure Finland selects the Gripen.

Talking to Dagens Industri, he assesses Saab’s chances of winning the tender as good; the Gripen is the most modern fighter among the competitors, it has lower operational costs and is made for Nordic conditions. Additionally, Saab hopes to win the contract by offering jobs in Finland.

JAS deal: Lula accused of corruption

The federal prosecution authority in Brazil has accused ex-president Liz Ignácio “Lula” da Silva of a number of crimes including influence trafficking, money laundering and organised crime between 2013 and 2015. The authority claims the improprieties led the Brazilian government to choose to purchase 36 JAS Gripen planes from Saab.

Accusations have also been made against Lula’s son, Luiz Cláudio Lula da Silva, and the Brazilian lobbyist Mauro Marcondes and engineer Cristina Mautoni who together own the lobbying firm M&M. Former president Lula is said to have influenced the government to the advantage of companies including Saab.

Brazilian newspaper O Globo reports that the prosecutors wrote that the lobbyists received over 2.5 million reais (around 7.5 million kronor), which was then transferred to Lula da Silva. They claim that Saab gave 1.84 million euros to M&M and write there is a great deal of evidence to support the accusation. “There is an intensive exchange of emails between employees of M&M and Lula Institute which aim to facilitate a meeting between Lula and the future Swedish prime minister Stefan Löfven.”

Saab denies participating in improprieties.

Myths about Nord Stream 2

Writing DI’s debate article this morning, Lars O Grönstedt, advisor to the Nord Steam company comments on the debate in Sweden in the past week not to allow the company to use the port of Slite on Gotland as a base to store pipes for a proposed gas pipeline, Nord Stream 2.

The debate has shown that those who make the most blatant claims are those who are the least well-informed, he writes, listing the twelve claims that are being aired in the debate, including the one that the EU can decide whether the pipeline should be built or not. Grönstedt points out that such a decision is outside the EU’s sphere of influence and that permission is given by each country pursuant to the act on the continental shelf.

Furthermore, despite claims that the pipes may be fitted with signals intelligence solutions, no one has been able to say how such intelligence will be gathered. It is a well-known fact that radio signals travel at a much slower speed under water, which radically reduces the amount of data. There are far simpler methods available, if a foreign power wishes to monitor shipping in the Baltic, he points out.

Grönstedt concludes that Nord Stream should be invited to the talks the MFA and the Ministry of Defence intends to hold with the pertinent municipalities on 13 December, since the claims being made are based on “untruths”.

Historic order in sight

The government is making a serious attempt to sell the fighter jet Gripen to India, a deal that would be the largest ever in Swedish history with a value far over SKr 100 billion. The Indian government recently sent an invitation to defence group Saab to participate in the tender for fighter jets.

Next week a delegation from Sweden, including enterprise minister Mikael Damberg, travels to India, on the initiative of Marcus Wallenberg, who is leading a new Swedish-Indian business cooperation. ABB’s CEO Johan Söderström, Alfa Laval’s CEO Tom Erixon, financier Carl Bennet and Saab’s CEO Håkan Buskhe will also be part of the delegation.

Mikael Damberg comments on a possible sale of Gripen: “It would not only be the largest deal ever, it would also mean a close partnership between Sweden and India for decades to come, which of course would mean a great deal for Swedish industry and our potential to grow in the whole of Asia.”