Poland has announced the details of its compensatory trade (offset) agreements related to a major contract for acquiring 96 AH-64E Apache Guardian attack helicopters. This offset is a crucial aspect of the deal, allowing Warsaw to retain a portion of the funds within the national economy.
Especially considering the total contract amount is USD 12 billion, as agreed in August 2023, based on the maximum price approved by the U.S. for these helicopters. Following initial agreements in September 2023 that established local maintenance of Apache's radar and missile guidance systems in Lodz, Poland's Ministry of Defense finalized new agreements with Boeing and General Electric on August 5, Defence24 reports.
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Under the deal with Boeing, which manufactures the Apache, Poland will have the opportunity to provide service for the helicopters at national facilities. As for General Electric, the document covers both maintenance and capital repairs of the T700 and CT7 engines used in the Apache.
By the way, these engines are also utilized in other helicopters, such as the AH-1Z Viper, UH-1Y Venom, UH-60 Black Hawk, and its derivatives, as well as the European NH90 and AW101. As noted by journalists, with these commitments, Poland could become a significant maintenance hub for these engines.
On a note from Defense Express, these offset agreements are very important for Poland. Typically, the purchase cost represents only 30% of the total operational cost over the service life of the equipment. Therefore, if Poland spends $12 billion on 96 Apaches, an additional $28 billion would be required over the next ten years of operation. But with offsets, a portion of these funds will remain in Poland.
At the same time, these offset agreements might seem relatively modest for such a large-scale purchase. For comparison, within a $920 million contract with Romania, South Korea alongside delivering 54 K9 Thunder self-propelled guns will build a new production facility and return $736 million under an offset agreement.
But Korea is still in the process of conquering the European market and is interested in creating new production lines. On the other hand, the AH-64E Apache is currently a unique offer in its class and therefore fully enjoys its monopoly.
As a result, some countries are exploring cheaper alternatives. For instance, Germany ordered the H145M, a civilian-based helicopter, instead of the costly Apache or the problematic Tiger. Similarly, Ukraine was offered the equally pragmatic Bell 407M, a light attack helicopter based on a civilian model.
Lastly, it's important to note that while Poland announced its intention to purchase such a large number of helicopters in September 2022, a firm contract has not yet been finalized.
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