The Department of National Defense (DND) is already in the process of “formalizing” the termination of the contract involving the procurement of 16 Mi-17 helicopters from Russia, which the former Duterte administration shelved days before it left office.
The move was announced by the department on Tuesday, more than a month after former Defense Secretary and now Bases Conversion and Development Authority Chairman Delfin N. Lorenzana said the contract has been scuttled by the Duterte administration just days before the end of its term last June 30.
“The Department of National Defense is formalizing the termination of the contract with SOVTECHNOEXPORT LLC of the Russian Federation for the procurement of 16 units of Mi-17 heavy-lift helicopters for the Philippine Air Force,” the DND said in a news statement.
The P12.797-billion contract was signed by the DND with the Russian contractor during the term of former president Rodrigo R. Duterte as it moved to beef up the air assets of the Air Force. Instead of 16, the contractor agreed to deliver 17 units of Mi-17, with the additional unit being given as free.
Following the signing of the contract, the then Duterte administration has already paid an initial amount of at least P1.9 billion as disclosed by Lorenzana, which he said, should be up to the current administration as to how it could take it back as a result of the contract’s termination.
Lorenzana cited the US-led West imposition of sanctions against Russia over its attack of Ukraine as the principal reason behind the decision to rescind the contract, as the Philippines may also incur economic sanctions from Washington should it push through with the deal with the Russian contractor.
In order to get the formal termination of the contract moving, DND spokesman Arsenio “Popong” Andolong said the DND has already reconstituted the “DND Contract Termination and Review Committee (CTRC) that will undertake the appropriate processes and exercise due diligence in formalizing the termination of the project’s contract.”
“We are also preparing to initiate a diplomatic dialogue with the Russian side regarding matters arising from the project’s cancellation,” he added.
Without dropping the same reason given by Lorenzana, who is his former boss, Andolong said “changes in priorities necessitated by global political developments resulted in the cancellation of the project by the previous administration.”
When asked what will happen to the P1.9 billion that has been given to the contractor as a down payment, Andolong said this would be included among the issues that the committee will look into.
Image credits: PNA