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Czech gov't cancels Austrian military deal

The Czech government on Tuesday said it had canceled a controversial $1.3 billion deal to buy armored vehicles from Austria's Steyr Consortium.

Defense Minister Vlasta Parkanova said Steyr had breached the contract as delivery was slow and the vehicles had failed technical tests. She said that although the first 17 vehicles should have been supplied by the end of November, they had still not cleared technical tests. Parkanova did not provide further details.

The previous Czech government, headed by Jiri Paroubek, picked Steyr in January 2006 to supply the army with 234 Pandur vehicles. But another bidder - Finland's Patria Vehicles - appealed the decision and the contract was only signed after Paroubek's coalition lost the general election, in June 2006, by the outgoing defense minister, Karel Kuehnl. This sparked criticism from the opposition. The now-governing Civic Democratic Party said the deal should not have been signed by the outgoing coalition. (pr-inside)