The official South Korean news agency Yonhap reported that the export company STX Corporation signed a contract for US$60 million with the state company Factory of Arms and Ammunition of the Army (FAME), for the supply of 30 K808 armored vehicles produced by Hyundai Rotem in the same Asian country.
According to the report, the armored vehicles will be destined for the Peruvian Army, and the commercial agreement includes the exploration of other business opportunities with the military institution.
The South Korean model of the K808 armored transport vehicle is the same one that STX Corporation and Hyundai Rotem presented to the selection process organized by the Army Operational Technical Study Commission (CETO) in 2023 and which was disqualified due to its high cost, among other considerations. .
On that occasion, STX Corporation and Hyundai Rotem quoted each K808 Baekho armored vehicle for US$2 million, which is the same price that the South Korean companies requested during the evaluation process called by the CETO.
But it is important to note that, as reported by the South Korean news agency Yonhap, the contract signed between STX and FAME is estimated at US$60 million. Then FAME must sell the armored vehicles to the Army for a currently unknown amount, because the state company is obliged by law to obtain a profit to reinvest said income in the national production of weapons.
Among the most expensive
In practical terms, in the end the Peruvian State will buy one of the most expensive 8×8 armored vehicles on the market that had been discarded by the Army, as investigative reports from La República revealed documentary.
Indeed, in the selection process conducted by the Army Operational Technical Study Commission (CETO), appointed by the then Army Commander General, Major General EP David Ojeda Parra -current head of the Joint Command of the Armed Forces-, 9 foreign companies participated, and of these, 4 offered amounts less than US$2 million for each armored vehicle, which is what the South Koreans asked for:
- Lazar III, from Yugoimport (Serbia): US$1,990,000.
- Pandur II, from Excalibur (Czech Republic): US$1,989,900.
- KTO Rosomak, from PGZ (Poland): US$1,975,000.
- Terrex I, from ST Engineering (Singapore): US$1,971,000.
But the Army chose the ARMA model, from the Turkish company Otokar, despite the fact that the unit price of US$2,154,186 exceeds the budget of US$60 million allocated for the acquisition of 30 copies, which reached US$64,625,605 in total.
The former General Commander of the Army, David Ojeda, wanted the Armed Forces Purchasing Agency (ACFFAA) to approve the selection of the Turkish ARMA model. But the then head of the ACFFAA, Vice Admiral AP (r) Santiago Váscones Morey, rejected the Army’s imposition and ordered the execution of a new process.
This year the Army resumed the project to purchase 30 armored vehicles, although under the protection of the so-called “FAME Law” No. 31684 of February 15, 2023. Based on an arbitrary interpretation of this norm, the Army high command has signed million-dollar contracts without calling for bidding in order to buy from whoever they want, something that the Comptroller General of the Republic has questioned in different reports.
The perfect triangulation
To skip the processes of selection and evaluation of supplier offers, the Army now “assigns” FAME to purchase what it needs.
To this end, FAME, which is controlled by the Army leadership – the current general commander of the military institution, Major General EP César Briceño Valdivia, was president of the FAME board of directors in 2023 -, simulated a “market study” for the supply of vehicles and awarded STX Corporation and Hyundai Rotem the contract.
Next, on May 20 of this year, FAME and the South Korean STX Corporation and Hyundai Rotem signed a “collaboration agreement for the establishment of a military vehicle production plant in Peru.”
With this agreement, the entire technical and economic study that the Army Operational Technical Study Commission (CETO) carried out throughout 2023 was put aside in a single stroke.
As part of the Army leadership’s scheme to avoid oversight and transparency, it took control of the Armed Forces Purchasing Agency (ACFFAA), which by law is the entity in charge of negotiating strategic contracts for military institutes. The appointment of General EP (r) Walter Astudillo Chávez as Minister of Defense, on February 13 of this year, was key to the plan to contract without bidding STX Corporation and Hyundai Rotem, whose K808 armored vehicle was rejected by the same Army.
With silver tray
On April 8, Minister Astudillo dismissed the head of the ACFFAA, Vice Admiral AP (r) Santiago Váscones, and appointed Brigadier General EP (r) Aldo Cornejo Valverde. Coincidentally, it was Cornejo who, as head of the Army War Material Service (SMGE), began the evaluation process for the purchase of the 8×8 armored vehicle. With Cornejo as head of the ACFFAA, the Army leadership had this entity under control and would not be an obstacle to the contracting plan with the South Koreans of STX Corporation and Hyundai Rotem.
And so it was.
The General Commander of the Army, César Briceño, asked the ACFFAA to exclude the purchase of the 30 8×8 armored vehicles from the General List of Contracts considered strategic in terms of Security and National Defense, “given that said requirement will be met by the Factory of Arms and Ammunition of the Army (FAME)”. By then, FAME had already signed the agreement in May with STX Corporation and Hyundai Rotem for the supply of 30 armored vehicles.
What was the response of the Army-controlled ACFFAA? Approved!
On November 10, the supreme resolution approving the purchase without bidding of the K808 armored vehicles was published with the signature of President Dina Boluarte and the Minister of Defense, Walter Astudillo.
The official South Korean news agency Yonhap refers to this contract between FAME and STX Corporation-Hyundai Rotem for US$60 million.
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STX Corporation and Hyundai Rotem would present armored
● According to military sources, the South Korean companies STX Corporation and Hyundai Rotem would transport three copies of the K808 armored vehicle to Peru for a presentation for Army Day, on December 9.
● The sources reported that the Army Weapons and Ammunition Factory (FAME) is in charge of coordinating the exhibition of the armored vehicles in Lima, but indicated that the Army did not have details. FAME did not respond to calls from this newspaper.
● The Army did the same type of triangulation for the purchase of military equipment when acquiring 10,000 Arad 7 rifles from Israel Arms Industries (IWI), without bidding or competition between several proposals. The Comptroller’s Office has questioned the process.
● The Republic requested information from the Ministry of Defense regarding the announcement made by South Korea of the signing of the contract between FAME and STX Corporation-Hyundai Rotem. There was no response. FAME, which always publishes statements to deny the press, did not respond either.
