Panel to negotiate return of P2-B down payment for scuttled helicopter deal

The Ministry of National Defense (DND) has set up a body to negotiate with a Russian company for reimbursement of the 1.9 billion peso down payment for the scuttled deal for the acquisition of 16 units of Mi- 17.

DND spokesperson and director Arsenio Andolong said the Contract Termination and Review Committee (CTRC) had been instructed to confer with Sovtechnoexport LLC officials for possible reimbursement.

Andolong said the decision to cancel the deal was made due to “shifting priorities necessitated by global political developments”.

The 16 units of Mi-17 heavy lift helicopters were intended for the Philippine Air Force.

“We have reconstituted the DND Contract Termination and Review Committee (CTRC) which will undertake the appropriate processes and exercise due diligence in formalizing the termination of the project contract. We are also preparing to enter into diplomatic dialogue with the Russian side regarding issues arising from the cancellation of the project, he added.

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The purchase agreement was concluded under the previous administration.

“The Ministry of National Defense formalizes the termination of the contract with the Russian Federation for the purchase of 16 units of Mi-17 heavy lift helicopters for the Philippine Air Force,” Andolong said.

“The CTRC will undertake the appropriate processes upon termination of the contract and will exercise due diligence in the two-way dialogue that will be conducted in connection with the cancellation of the project. This includes the issue of the deposit. The deposit was of 1.9 billion pesos.” he added.

Delfin Lorenzana, then Secretary of Defense and now head of the Base Conversion and Development Authority, signed the agreement to purchase 16 Mi-17 helicopters from Russia.

However, it was abandoned before the end of the Duterte administration for fear of economic sanctions from the United States.

The first batch of helicopters was to be delivered next year.

About Matthew R. Dailey

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