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UPDATE 1-Canada to scrap C$2 billion plan to buy armored vehicles

Friday, 20 Dec 2013 | 11:57 AM ET

OTTAWA, Dec 20 (Reuters) - Canada said on Friday it was scrapping a C$2 billion ($1.9 billion) plan to buy 108 large armored troop-carrying vehicles for land forces, in part because the equipment was no longer seen as crucial.

The three companies in the running were France's Nexter, Britain's BAE Systems Plc and General Dynamics Corp's Land Systems unit.

The scrapped plan is the latest in a series of procurement mishaps to hit the Canadian military.

The Conservative government announced in 2009 it would buy the vehicles to protect troops from mines and anti-armor weapons. At the time Canadian forces were still active in Afghanistan and suffered many casualties when lighter vehicles ran over mines and homemade bombs.

Canada stopped combat operations in Afghanistan in 2011. General Tom Lawson, Chief of the Defence Staff, said one reason for scrapping the plan was that the vehicles would not be needed as much as initially forecast.

Another reason not to proceed was improvements made to existing vehicles to make them more capable of resisting blasts, he told a news conference.

BAE Systems is "obviously disappointed" by the decision, said a spokesman.

The Canadian Broadcasting Corp first reported the news late on Thursday.

Last month, an official spending watchdog said Ottawa had underestimated how much a multibillion-dollar naval shipbuilding plan will cost.

In 2010, the government said it would buy 65 advanced F-35 jets from Lockheed-Martin Corp for C$9 billion, but tore up the proposed deal in 2012 after the same watchdog said officials had deliberately downplayed the costs and risks.

Other problems include a plan to buy military trucks that was scrapped in July 2012 just minutes before the final deadline for applications.

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