The French Ministry of the Armed Forces has held back its military orders for 2023, causing a stir in the defense sector. Among the anticipated orders, 42 Rafale aircraft and 420 VBMR-L Serval light-armored vehicles remain untouched.
Low Progress of Military Orders
The usual practice of placing orders is seeing a lag, with no notifications for such significant orders as of August 31, 2023. Adding to this, the delivery of key equipment planned for 2023 is noticeably behind schedule. The notable delays cover 10 Rafale fighter aircraft, seven upgraded Mirage 2000D jets, and generous quantities of other military paraphernalia.
Mounir Belhamiti, a member of the parliament, has expressed his shock at the situation and suggested a shift in the current proceedings. According to Belhamiti, the urgency that a ‘war economy' brings should correspond with accelerated order and delivery timelines. Instead of postponing them until the fiscal year's closure, the priority should be given to key contracts.
Fund Freeze and Inflation
Several factors may be contributing to this delay. The government's ‘freeze' of Program 146 funds in May is a possible cause. Not to mention the inflation, which has already piled on an extra 400 million euros to the cost. Consequently, Program 146 had to grapple with a lack of available funds.
Rising Carryovers and Pending Payments
Charge carryovers have been on the rise accordingly, hitting 14% of the original budget in 2022 and anticipated to reach 15% by the end of 2023. Forecasts predict this figure could rise to 20% by the close of 2024. This increase has also prompted worries about a significant surge in outstanding payments.