German committee approves big defence project

BERLIN, Dec 13 (Reuters) Germany's parliamentary budget committee has approved spending of 7.2 billion euros (.56 billion) on defence projects to be led by IBM and Siemens, the Defence Ministry said today.

Another project was also approved, bringing total spending approved by the committee to roughly eight billion euros, a source close to the committee said on condition of anonymity.

Siemens's information technology unit SBS and IBM will oversee some 7.2 billion euros of contracts, the ministry said today in a statement.

The two companies are expected to install around 140,000 personal computers, 700 mainframe computers and thousands of telephones for the German armed forces, it added.

''For the next ten years the operation and upgrade of the civilian IT infrastructure of the German army will carried out a company formed by the army in cooperation with SBS and IBM Deutschland,'' the ministry said.

SBS and IBM will own 50.1 per cent of the firm carrying out the contracts and the German government will be a junior partner with a 49.9 per cent stake, the ministry said.

The government also plans to buy 272 armoured ''Boxer'' transport vehicles for 891 million euros, the source said.

Rheinmetall, Krauss-Maffei Wegmann and Dutch firm Stork are involved in the vehicle's development.

''This was also approved,'' the source told Reuters.

The committee's green light makes the plans a virtual certainty, though they must still be approved by parliament.

Die Welt newspaper cited committee sources as saying that Germany was set to delay planned helicopter purchases in which European defence group EADS is a partner.

These include MH-90 naval helicopters and the second batch of NH-90 helicopters. All told they would have cost about 2.4 billion euros, the paper said.

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