Ukraine's Defence Ministry reviews defence procurement and will "free up" US$347.8m

The Ukrainian Defence Ministry, together with the General Staff of the Armed Forces and the Logistics Forces Command, will free up UAH 15.6 billion (US$347.8 million) for the military's current needs by terminating some contracts with manufacturers and cancelling planned purchases.

Source: Ukraine's Defence Ministry

Quote: "Technologies, methods of warfare and the needs of units are changing rapidly. What was planned for procurement in 2024-2025 may no longer correspond to the situation on the front line today."

Details: The Defence Ministry, together with the General Staff and other bodies, analysed the military's current needs, existing contracts and planned procurements.

"As a result, UAH 15.6 billion will be freed up. These funds will be allocated to supplies that are currently a higher priority for the military," the ministry said.

The reasons for the review included some equipment no longer meeting the requirements of current combat missions and suppliers being unable to produce the planned quantities. In addition, some items have still not undergone codification.

Quote: "Some needs are being fully covered by partners, while some tasks can be carried out using cheaper equipment, allowing us to purchase it in larger quantities.

Some contracts will be terminated, while some planned procurements will not go ahead. All decisions regarding existing contracts will be implemented in accordance with the law."

Details: The ministry said that manufacturers affected by the changes "had been informed and had communicated with Defence Procurement Agency DOT regarding further action on the contracts, taking into account their implementation status and payments made".

The ministry is not publishing the list of weapons whose procurement has been reviewed, citing security considerations.

Background:

• It was previously reported that following talks with the EU, Ukraine is still seeking funding for most of its additional defence needs of US$27 billion using domestic resources, while funding for the remainder is still being sought.
• President Volodymyr Zelenskyy called the deficit in funding for Ukraine's defence "astronomical" and said the authorities are preparing proposals to address the problem.
• Ukraine's state finances are close to a critical situation, while delays in the necessary votes in the Verkhovna Rada (Ukrainian parliament) could cost Ukraine a significant portion of US$29.5 billion in international funding.

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