US embassy cable - 05WARSAW1283

C O N F I D E N T I A L WARSAW 001283 
 
SIPDIS 
 
STATE FOR EUR/NCE TARA ERATH AND MICHAEL SESSUMS 
 
E.O. 12958: DECL: 03/08/2015 
TAGS: EAID, ECON, PREL, PGOV, IZ, PL, Iraq Contracts 
SUBJECT: POLISH COMPANY FEARS IRAQ WILL CANCEL SIGNIFICANT 
CONTRACT 
 
REF: 2004 WARSAW 5473 
 
Classified By: DCM, Cameron Munter: reasons 1.4 (b) and (d) 
 
1. (C) In December 2004, Poland's defense holding company, 
Bumar, signed a number of contracts with the Iraqi Ministry 
of Defense to provide military supplies and equipment to Iraq 
(reftel).  Prominent among these deals were two contracts to 
deliver several large Russian-built cargo/transport 
helicopters and 20 Sokol combat-support helicopters produced 
in Poland. In early February, the Iraqi Ministry of Defense 
requested that Bumar cancel the $132 million contract for the 
20 Polish-built Sokol combat-support helicopters.  Bumar 
understands from the Iraqi Ministry of Defense that U.S. and 
British military advisors requested that Iraq cancel the 
contract for the 20 Sokol helicopters because the IIG 
advisors do not believe that the Iraqi military should have 
this equipment. 
 
2. (C) Bumar fears that if the contract for the Sokol 
helicopters is cancelled, there may be political 
repercussions as the remaining helicopter contract already 
signed is for Russian-built helicopters.  Bumar said that an 
Iraqi delegation will arrive in Poland before March 18 to 
discuss the issue further.  Bumar hopes to salvage at least 
part of the deal by negotiating to provide fewer Sokol 
helicopters rather than outright cancelling the contract. 
 
3. (C) Comment. The fact that few Polish companies have won 
U.S. or Iraqi-funded contracts for work in Iraq remains a 
sensitive topic in the GOP and the Polish business community. 
 Throughout most of last year, the Poles were very vocal 
about their desire to "fully" participate in Iraq 
reconstruction.  They are currently not as outspoken on Iraqi 
contracts as they once were, due in part to the very positive 
press this $132 million deal received when it was signed in 
December 2004.  Cancelling the contract may return this issue 
to the front page of the news, unhappily reviving what had 
been a quiet topic.  Bumar may be right in suggesting that 
the Polish government and public would be upset if they 
perceived that U.S. advisors had a hand in cancelling one of 
the few significant contracts the Poles have won in Iraq. 
The impact of this issue may be compounded if such a 
perception exists as Poland heads into expected elections in 
June. End comment. 
ASHE