THE Department of National Defense yesterday said it has formed a committee that will formalize the termination of a P12.7-billion helicopter contact with Russia
DND spokesman Arsenio Andolong clarified the cancellation of contract announced by former Defense Secretary Delfin Lorenzana two weeks ago is not yet final.
Andolong said Lorenzana merely served the government’s intention to cancel the contract which was signed in November last year. The DND made a down payment of P2 billion two months later.
The deal with Sovtechnoexport LLC of Russian Federation calls for the delivery of 17 Mi-17 heavy-lift helicopters, including a freebie unit. The delivery of the helicopters was supposed to start in November next year or 24 months after the contract signing.
Lorenzana said he canceled the contract last June 25 or five days before the end of the Duterte administration. He said then President Duterte wanted the contract canceled due to possible sanctions from US.
Lorenzana was referring to sanctions under the Countering America’s Adversaries Through Sanctions Act of 2017 that prohibits countries from purchasing Russian military hardware.
“He (Lorenzana) started the (termination) process already by serving notice of our intention to cancel the contract. Now, there are procedures involved to formalize it,” said Andolong.
“It’s not yet terminated, we have to complete the process although his letter to the Russians already constitute the start of the process, the intent is already there,” added Andolong.
Andolong said the current DND leadership has taken steps to formalize the termination of the contract.
“We have reconstituted the DND Contract Termination and Review Committee that will undertake the appropriate processes and exercise due diligence in formalizing the termination of the project’s contract,” said Andolong.
“We are also preparing to initiate a diplomatic dialogue with the Russian side regarding matters arising from the project’s cancellation,” the DND spokesman also said.
Asked if the DND is confident it can recover the P2 billion down payment it made with the Russians, Andolong said, “I cannot speculate at this point in time, that’s why we have a bilateral dialogue.”
But he said the defense department will exert efforts to recover the down payment.
