Czech Defense Ministry paid half a billion crowns for military field kitchens — some equipment still unused

Since 2019, the Czech Ministry of Defense has ordered specialized military containers — field kitchens, drinking water and food storage units, sanitary modules — from the Brno-based family firm 4 Army, for a total of half a billion crowns. It has now emerged that some of the already-paid-for equipment, worth tens of millions of crowns, still cannot be used by the army.

According to data obtained by the ministry under the Freedom of Information Act, a total of 458 million crowns was paid out across seven tenders with 4 Army. However, the full amount never reached the company due to its bankruptcy proceedings: the firm had already received 358 million crowns, while nearly 100 million more, tied to three remaining contracts, was transferred by the ministry into a court deposit, with a request for the court to decide how the funds should be distributed among creditors.

Water containers have sat unused for almost three years

At issue are 12 drinking water containers worth almost 51 million crowns, which the ministry has been unsuccessfully trying to return under warranty claims for roughly three years. According to Roman Hrabačka, director of the office of the Minister of Defense, the ministry repeatedly demanded the supplier fix the defects, imposed penalties, and sought compensation for the faulty goods. "The goods are in the buyer's possession and are not being used," he confirmed.

The problem turned out to be more serious than ordinary defects: drinking water containers must undergo strict certification and military testing, withstand extreme temperatures, and not leak during transport. According to ministry representatives, one of the certificates provided by the firm turned out to be forged — this was confirmed by the certification body itself. It was later replaced with a document from a different certification authority, but further violations were subsequently discovered. For delays and violations, the ministry has issued claims against 4 Army totaling 134 million crowns, which the company disputes.

The company denies the allegations

4 Army belonged to former senator Vlastimil Segnal, who signed all the contracts with the state and, until his death last October, denied any wrongdoing. Shortly after his death, the company entered bankruptcy proceedings — more than twenty creditors have filed claims totaling half a billion crowns, the largest of which is the state itself. Management of the firm passed to his daughter, Renata Segnalová, who maintains that all delivered containers had valid certificates from Germany, Czechia, and the Netherlands.

The largest sum — 181.8 million crowns — was paid for 74 tanks and containers equipped with showers and toilets. Of these, according to the ministry, 42 units were delivered late. Another delivery — eight ThermoKing refrigerated containers worth nearly 31 million crowns — was also delayed, for which the ministry imposed a penalty of 4.4 million crowns.

Suspicious debt transfers and a criminal case

The ministry claims that 4 Army transferred the right to receive part of the payments under several contracts — for refrigerated containers, the "Kalich" field kitchen, and sanitary modules — to a company called Variel Defence, even though the contracts explicitly prohibited this. According to the insolvency register, the claims involved amount to more than 100 million crowns. Roman Výborný, director of the affiliated firm Variel, confirmed only one claim worth 766,000 crowns for painting three containers, and declined to answer questions about the legality of the debt transfers.

In June, the Ministry of Defense filed a police report against an unknown person on suspicion of fraud and violation of creditors' rights in connection with these transactions.

Former minister admitted doubts over pricing

The Defense Ministry's deals with 4 Army, worth over 450 million crowns, first came to light back in May last year. The company received its first contracts in 2019 under the government of Andrej Babiš, while the largest tenders came later, under his successor Petr Fiala. Market experts, including Stanislav Martinec, owner of the company Koma Modular, described the prices as several times overinflated even accounting for military requirements and certification standards.

Then-Defense Minister Jana Černochová initially defended all the spending but later admitted to having doubts and ordered an internal audit of the contracts. However, according to ministry representatives, no internal audit into 4 Army is currently underway. The ministry says it will not take personnel action against its employees, since the problems arose due to the supplier's fault rather than officials' negligence, and has promised to more carefully vet tender participants in the future and consider changes to procurement rules.

Source: seznamzpravy.cz