DND Eyes Refund on Botched P12.9B Helicopter Deal with Russia

02 Oktober 2022

Mi-17V5 helicopter (photo : India Today)

The Department of National Defense (DND) is studying options on how to refund its P1.9-billion down payment for the botched acquisition of brand new helicopters from Russia.

DND officer-in-charge Undersecretary Jose Faustino made the remarks during Tuesday’s briefing before the Senate Committee on Finance for the agency’s proposed P310.9-billion budget for 2023.

According to Faustino, the government is now reviewing its contract with Moscow in order to refund its P1.9-billion deposit which is supposed to be used in procuring 17 Mi-17 heavy transport helicopters totaling to P12.9-billion from Russia’s Kazan Helicopters.

“Dito po sa atin ngayon, what we did is buoin yung ating contract termination review committee to formalize yung termination of contract,” said Faustino.

Faustino stressed that the DND “recognizes the difficulty in refunding the advanced payments as the suppliers also invested in the project.”

“We are now exerting effort to refund the amount through the diplomatic channels considering that the project was implemented through government to government procurement,” he added.

The former military chief explained that the said fund was initially transferred through the Development Bank of the Philippines (DBP) last January 10, 2022—weeks before the start of the Russia-Ukraine War.

Faustino stressed that the deal was scrapped a few months before former President Rodrigo Duterte stepped down amid potential sanctions the government may face from the United States and other allied countries following Russia’s invasion of Ukraine.The helicopter project however “is not yet officially cancelled.”

“The previous administration deem that it’s no longer feasible to pursue the project given the major sanctions imposed to Russia that affected its financial transactions,” said Faustino.

Last March 10, former Defense Secretary Delfin Lorenzana disclosed that the contract and the initial down payment for the Mi-17 acquisition project had been completed before Russia began its military operations in Ukraine.

But Lorenzana bared last July that he decided to terminate the deal as the country “could face sanctions.”

(Politiko)