Arms sector hopeful of winning major new contracts

The government on Tuesday confirmed it would consolidate the ailing defense industry to prepare the state-owned sector for multi-billion dollar co ntracts from the domestic armed forces and boost international competi tiveness. Presenting a new strategy to revamp the sector, Deputy Economy Minister Andrzej Szarawarski said that two holding groups controlling 50 or so defense firms would be created by the end of next year. Restructuring budget-draining sectors is also a key demand of the European Union (EU), who often criticizes Poland for giving excessive public aid to its ailing state industries in violation of EU fair competition regulations. "We want to complete consolidation of the sector by the end of 2003 so as to help the sector improve its technology and compete in foreign markets," Szarawarski told a press conference. The defense sector should soon get a boost from lucrative domestic and foreign contracts, as Poland signed export deals, worth $450 million earlier this year with two Asian countries. "I would estimate our export capacity is $1.5 billion to $2 billion," he said. "Our advantage is the capability to modernize arms coming from the former Soviet bloc that are in many of the world's armed forces." (Reuters)