Poland Snaps Up 23 MiGs for 1 Euro

A 1 euro deal between NATO allies could net Russia $20 million.

Poland on Tuesday agreed to buy 23 Soviet-built MiG-29 fighters from Germany for 1 euro (86 cents).

The price is a symbolic gesture by Germany, which inherited the MiGs after its reunification with East Germany.

"It's a gift," said Major General Stanislav Vozniak, military attache at the Polish Embassy in Moscow. "But for the transfer to proceed in accordance with the law, we are paying a symbolic price -- 1 euro."

Polish Defense Minister Jerzy Szmajdzinski flew to Berlin to officially close the deal with his German counterpart, Rudolf Scharping, ministry spokesman Artur Weber said in a telephone interview from Warsaw.

The MiGs help Poland meet a NATO deadline on equipping its air force and, combined with the 22 MiG-29s it already has, give Poland the second-largest fleet of this type of craft outside the Commonwealth of Independent States, after India, analysts said.

Piotr Butowski, a Warsaw-based independent defense analyst, said that the deal might also mean upgrade contracts for the manufacturer of the craft -- Russian Aircraft Corp. MiG.

Marat Kenzhetayev, an expert at Moscow's Center for Arms Control, said state-owned MiG could make as much as $20 million on upgrading the new additions to the Polish fleet.

Vozniak confirmed that Poland would need to modernize some of the jets, but not the whole fleet, as a few will be used for spare parts.

Mikhail Pyadushkin, editor of Export Vooruzheniy (Arms Export) magazine, said the deal gives Russia probably its last chance to make money modernizing MiGs in Eastern Europe.

MiG signed a deal last year, estimated to be worth up to $40 million, to upgrade 14 or 16 MiG-29s owned by Hungary. And it is the favorite to win a Bulgarian tender to upgrade 21 jets, a deal estimated to be worth $45 million.

MiG officials and analysts said, however, that one casualty of the German-Polish deal is likely to be MAPS, a joint venture between MiG, Russian arms export agency Rosoboronexport and Germany's DASA, which was set up in 1993 to repair and upgrade MiG-29s.

"MAPS is no longer needed," said a MiG official who asked not to be identified. "We will definitely participate in modernizing their jets, either by cooperating directly with Poland or forming a joint venture of some sort."

"Why would Poles pay Germans to modernize their MiGs? Russia and Poland will attempt to create a JV," said Konstantin Makiyenko, deputy head of the Moscow-based Center for Analysis of Strategies and Technologies think tank.

Makiyenko speculated, however, that the symbolic price Poland paid for the jets could have been conditional on Poland awarding MAPS any modernization contracts.

Butowski thought that was unlikely. "MAPS will cease to exist; there is no sense in continuing it," he said.

MAPS head Volker Paltzo said there had not been any official talks with the Polish side on the issue.

When Poland joined NATO in 1999 it committed itself to having 160 up-to-date fighters, which meant that by 2007 it would have to buy 60 jets.

Due to a budget crisis, however, Warsaw indefinitely delayed a tender for a new batch of fighters that drew interest from Lockheed Martin, a British-Swedish consortium of BAE Systems and Saab, and France's Dassault.

By getting 23 MiGs from Germany, "Poland filled a big hole at a small price," Butowski said. "Germany was planning to retire its fleet of MiG-29s anyway," he added.

Poland had a similar deal in 1995 with the Czech Republic, as a result of which it received 10 MiG-29s in exchange for 11 Polish-made helicopters. Warsaw got its first 12 MiGs from the Soviet Union in 1989-90.

Analysts said Poland is likely to use its MiG-29 fleet until 2015.