Will Rak Repeat the Export Success of Piorun? Grabowski: Miecznik Required Changes [INTERVIEW]

Jędrzej Graf: Recently, we’ve heard about personnel changes, as well as changes to the armament configuration of the Miecznik ships. There are various opinions about these decisions in the public sphere. How are these processes related, and how are they assessed by PGZ?

Jan Grabowski, PGZ Board Member: Organizational changes that occur from time to time within the company are a natural process aimed at optimizing procedures and improving work efficiency. The Miecznik project has been and continues to be a well-managed project, but it required certain personnel and organizational changes. The new program leadership consists of individuals who have already been working within our organization, have been involved in the program for a long time, and come from the Navy, being well-prepared and knowledgeable about the entire issue. These are two reserve officers – Mr. Grzegorz Sowa and Piotr Jaszczura.

The modifications to the configuration introduced by the client are a completely separate issue. Both the changes in the placement of radar systems and the choice of anti-ship missiles result from their decisions. The contract for the three Miecznik frigates clearly states that the client has the right to make changes during the project, and we conduct the necessary studies, present various options for their implementation, and, upon receiving decisions, proceed to execute them.

Aren’t you concerned about increasing costs?

If the analyses show that the proposals fit within the budget for purchasing equipment, then these changes are implemented. I should emphasize that the Miecznik will be the most complex system ever integrated into the Polish Armed Forces, even more complicated than the F-35. Many systems on this ship will work together, and there must be no interference between them that would reduce their potential. Every change on the ship implies others. The Ordering Party requested a change in the anti-ship weapon system, so we first implemented it “on paper,” then presented it to the client, and after receiving the appropriate approvals from them, we proceeded to sign the necessary contracts with the company Kongsberg.

What about the schedule? Is the plan for launching still at the end of 2026? Are changes planned in the implementation process, and will it be modeled on the one introduced for the Kormoran ships?

As for the dates, we are within the framework specified in the contract with the client. To date, there are no changes that would necessitate discussions about shifting those dates.

Currently, we are in a situation where a mega-block is being created at the PGZ Stocznia Wojenna, two more are contracted and are also being produced at a Polish shipyard partnering up with us. Some key components, such as propulsion units for the three ships, are already in our shipyard. We are successively carrying out further production work and orders to keep to the schedule.

Are other changes in configuration or subsystems, of which there are hundreds, anticipated?

As I mentioned before, Miecznik is a very complex system. We have monthly meetings with PGZ, the shipyards, and the client, where we discuss progress, challenges, and the degree of equipment order advancement. The cooperation is very close, as everyone is committed to the success of this program. Miecznik is being conducted with full collaboration with the Ordering Party in a “Project Management Office” format, as specified in the contract. Separate from this is the Miecznik Program Office, an organizational unit within the structure of PGZ. These two entities should not be confused. I cannot imagine that a program worth over 15 billion PLN would not have an office responsible for it within PGZ. The office adjusts its resources with the successive milestones of the project.

The Project Management Office, on the other hand, is a structure that exists between the PGZ-Miecznik Consortium and the project’s strategic partners. It naturally includes representatives from PGZ, PGZ War Shipyard, our two strategic partners – Thales and Babcock – as well as MBDA and, very importantly, the Armament Agency. The client is “on board” with us and is fully aware of what is happening.

In discussions with the client, we emphasize that if we want to maintain the original deadlines, and we all strive for this, then changes in configuration have their time and place. However, I will stress again that the Miecznik program is the most complex system in the Polish Armed Forces. It is also the first military system of this type being built in Poland. The learning curve of the entire system, in which these multi-purpose frigates are being created and will operate, is quite steep. However, we have significant support from the British side at the governmental, military, and naturally industrial levels.

PGZ Stocznia Wojenna was conducting work on the construction of a new facility. Has it been completed?

The investment has already been handed over for use. A few weeks ago, it passed the fire brigade inspections. Currently, the hall is being equipped and prepared to be incorporated into the shipbuilding processes.

Why are the first blocks being built at the CRIST shipyard, then?

In our most ambitious plans, we did not consider the option where all the work would be located in one facility. It would be hard to find a shipbuilding project on such a scale and with such a schedule worldwide, carried out by a single shipyard. Shipbuilding is a complex, multi-threaded process, and distributing the work among several entities is entirely natural.

CRIST shipyard submitted a financially advantageous offer, accepted by the client. Moreover, it is conveniently located, on the other side of the port basin where PGZ Stocznia Wojenna is. Megablocks born at CRIST can then quickly be transferred to PGZ SW - and there they would be integrated with the central section of the ship.

What will be the next milestone in the Miecznik program?

The next step will be the installation of those elements that have already been ordered in the readymade blocks. As I mentioned, some of them are already at the shipyard. The following step will be their integration into the emerging midship megablock.

The previous PGZ management said it would aim to expand international cooperation, including with Babcock, so that the potential built for Miecznik could continue to be used. Are these plans being continued?

As PGZ Group, we want to be the key partner for the Polish Armed Forces in supplying equipment for all branches: the Land Forces, the Navy, the Air Force, Special Forces, and the Territorial Defence Forces. This means not only production or co-production of equipment but also managing its entire life cycle. By this, I mean repairs, maintenance, and upgrades, all the way to the disposal process.

In this plan, PGZ War Shipyard plays the role of the main producer and supplier of ships to the Polish Navy, as well as the center for performing MRO (Maintenance, Repair, and Operations) work on all ships throughout their life cycle. This also stems from the Miecznik contract, which includes establishing a capacity for providing through-life support (TLS), both in terms of the ships« hardware and software, at PGZ Naval Shipyard. This is the first point of cooperation between PGZ Group and Babcock.

The second element is, of course, international cooperation. Today, no company, especially in our sector, can function without such cooperation. I’m not just talking about ongoing cooperation with the British, as Babcock is our strategic partner, and PGZ SW has already carried out work for this shipyard. But this also includes cooperation with the Danes and other countries in the Baltic Sea region. Some of the Miecznik documentation comes from Denmark. Copenhagen also needs its own ships but lacks the appropriate shipyards. PGZ SW could be a natural partner here, and this cooperation is one of our priorities. We must also remember that the shipyards within the PGZ Group include not only PGZ SW but also Nauta Ship Repair Yard.

Returning to the beginning of our discussion: will there be a point in Miecznik when the documentation is finalized, and no further changes are made?

The contract provides for such a moment. Change management is one of the most detailed issues described in the Consortium-Contractor agreements, and it is based on a model that clearly indicates how much flexibility remains. Naturally, this deadline is quite near, as the future ORP Wicher is already being prepared for the installation of its propulsion system, but for now, only the contract parties need to be aware of the specifics.

What is PGZ’s offer in other surface ship programs, such as Hydrograf and Ratownik?

We have expressed our willingness to participate in the Hydrograf programme. PGZ SA is to lead the programme, with participation from our companies in the maritime domain, including PGZ Naval Shipyard, OBR CTM, and Nauta Ship Repair Yard.

I would add that my ambition, as the person in charge, is to foster closer cooperation between the shipyard companies. PGZ SW and SR Nauta will be able to do much more together, looking at the entire ship life cycle - design, production, repairs, and operational support - than if they were to work separately, let alone compete with each other.

We submitted a bid as one of the five participants in the HYDROGRAF programme. We have some ideas and a vision for how to implement this project. We want it to be a modular ship because this concept has already been successfully implemented by several leading NATO navies, opening new areas of potential cooperation. We are also in discussions with foreign partners about using their designs and solutions in this program to mutually support each other in designing, building, and, most importantly, operating the vessels that will enter service. However, I cannot discuss the trade secrets. Regarding Ratownik, we are in talks with the Armament Agency, and we have a concept for the ship, but communication and, more importantly, decisions rest with the contracting authority.

What about the Orka submarine programme? Currently, this project has been escalated to a “higher level,” meaning a decision is pending at the government level. Do you see opportunities for increasing the participation of Polish industry in this project, as has been discussed?

Decisions on implementing strategic military modernization projects are always made at the highest level. We are prepared to implement the Orka project as soon as a decision is made to proceed. PGZ SA has the resources, including reserve officers who had the honor of serving on submarines, and we are ready to engage them in this program as soon as the necessary decisions are made.

Our ambition is to participate as much as possible in the MRO program, but we do not exclude involvement in shipbuilding. PGZ is already a strategic partner for the Polish Armed Forces, especially the Navy, in terms of production, maintenance, repair, and upgrading all types of equipment, including ships. Advanced submarines are, therefore, an area of interest for us. Although I know these words are controversial, I will repeat: the PGZ Group is capable of participating in a shipbuilding program. I’m not saying we will build these vessels from keel to sail entirely domestically, as that may be economically unfeasible, but we have many options for engaging PGZ in ship production within the framework of the ORKA programme.

You’ve mentioned the CRIST shipyard, and there are other shipyards owned by the ARP. Is PGZ in talks with them about cooperation or even consolidation?

The CRIST shipyard is 65% privately owned, so any decisions must depend on its shareholders. Moreover, CRIST is not directly in PGZ’s ownership structure; MS TFI holds shares there. As for other state-owned shipyards, such as those in Szczecin, they focus more on civilian production, while we, particularly within PGZ SW, are focused on military production.

It is true that SR Nauta currently focuses on work for the civilian sector, but when we talk about consolidating shipyards within PGZ, we aim to ensure that all ships used by Polish maritime forces, not just the Navy but also the Border Guard and rescue services, are serviced and repaired in PGZ Group shipyards. We are more focused on the military sector, as far as the shipbuilding industry is concerned, than on the civilian sector.

Let’s move on to international cooperation. Currently, the largest program being carried out within PGZ’s international cooperation framework is air defence, primarily Narew and the second phase of Wisła. One of the key elements is integrating IBCS with the system components, as it will form the basis for interoperability. How is the work in this area progressing?

Air defence should be multilayered, adequately saturated, and integrated. In the Narew program, we have three government partners: Poland, the United States, and the United Kingdom, and three industrial partners: PGZ, MBDA UK, and Northrop Grumman. The Wisła program, carried out under the FMS framework, also involves other American partners Raytheon and Lockheed Martin.

Of course, the IBCS system is to connect the various components: radars and effectors. We are in advanced negotiations, and all parties are determined to contract as soon as possible. From our side, PIT-Radwar has already demonstrated that it can integrate radars with IBCS. During MSPO 2024 in Kielce, radars intended for the air defense system were demonstrated. PIT-Radwar is ready to produce these radars and also has its own Zenit system, already used in the Mała Narew system, and is planned for Pilica+.

Another important program for international cooperation is the Heavy Infantry Fighting Vehicle. President Trofiniak mentioned that a committee was set up within PGZ to oversee the implementation of this program. What offers are being considered?

Indeed, at the customer’s request, a committee was formed to support the Market Preliminary Consultation process. Currently, the selection process and the entire CBWP (Heavy IFV) programme have entered the next phase. Out of several bidders, three remain, as they provided the most favorable answers to the questions posed in the first phase.

The committee, consisting of experts from PGZ Group companies specializing in vehicle production and systems for armored vehicles, is now in discussions with the bidders about further cooperation. We aim for the highest possible level of domestic production and technology transfer, which we view as a key element of our future recommendations.

I would add that a similar situation exists in the new APC program. Detailed discussions are currently ongoing with the selected bidders.

What about the K2PL programme? It’s one of the largest industrial cooperation projects.

In July, a consortium agreement was signed between PGZ and Hyundai Rotem. This consortium is conducting further discussions and implementing the assumptions from the framework agreement. Talks are ongoing, and we are acting according to the assumptions presented by the Ordering Party, which is responsible for providing details.

PGZ also participates in European programmes, particularly the EDIRPA programme, in which the Ministry of National Defense is also involved. Has a decision been made regarding EU funding?

As for European funding, we are still waiting. Piorun was and remains a hit in exports. Ukrainian experiences show that such a weapon is indispensable, and the Piorun itself is very effective. Export customers continue to receive deliveries of Pioruns, and new interested parties are appearing.

What does the industrial cooperation with the Ukrainian side look like in terms of PGZ, both currently and in the long term? The largest contract concerns the Krab howitzers.

The Krabs are constantly fighting in Ukraine, doing their job at, one could say, more than 100% of it. As PGZ, we are also responsible for repairing this equipment in Ukraine, on-site. Vehicles that require specialized tools and comprehensive repairs are sent to Poland. As the industry, we are learning a lot from the fact that Krab proves itself in combat. The knowledge gained from its operation indicates directions for further modifications. Krab’s service in the Ukrainian Armed Forces also shows us what has already been achieved. We can see how efficient and incredibly effective it is on the battlefield, operating under much greater strain than initially anticipated.

Today, we are focusing on providing Ukraine with the tools it needs to stop the aggressor and win. Due to the ongoing armed conflict, I cannot disclose details of the ongoing talks and cooperation with the Ukrainian side.

Recently, Hanwha Aerospace signed a letter of intent with WB Group regarding the possible production of munitions for the Homar-K system. Does this mean that PGZ will not take action in this area?

As PGZ, we secure the security interests of our main client, the Armed Forces of the Republic of Poland, in terms of artillery and rocket munitions in contracts that are already signed and more broadly: everywhere the industry sees business opportunities, and the customer sees its interest in securing ammunition supplies based on our capabilities.

Regarding munitions manufacturing, particularly for rocket artillery, we are in talks not only with the Korean side but also with the American side. Negotiations like silence, so I will end this topic here.

Recently, there was information confirmed by PGZ’s press office that the Military Automotive Works in Poznań could merge with H. Cegielski-Poznań as part of consolidation. In the context of international cooperation, it is important that WZM is expected to support the operation of Abrams tanks in cooperation with General Dynamics Land Systems. How will the consolidation affect Abrams support by the Poznań plants and more broadly PGZ?

The Polish Armaments Group signed an agreement in Kielce regarding the establishment of a service center for Abrams tanks in Poland. The scope of work covered by the agreement is really extensive. Additionally, the center is intended to eventually maintain all Abrams tanks in service with European NATO member states, including those used by U.S. forces in Europe. This is the intention of both us and our American partner, GDLS.

Many factors suggest that, for strategic reasons, this will not be a single location. This is one of the lessons learned from Ukraine’s defence. We should aim to maximize mobility so that, in case of an emerging threat, we have the ability to quickly deploy and relocate resources necessary to service equipment entering and exiting combat.

The U.S. Army is currently looking for a self-propelled mortar system, and there was recently a demonstration of the Finnish Nemo in the U.S. Could a similar demonstration be carried out with the Rak mortar, and are any actions being taken in this regard? Are there any talks about selling Rak to the US?

I can only say that we have received an inquiry from the United States regarding the 120mm Rak self-propelled mortar and confirm that full export rights for this system are in PGZ’s hands.

Many countries are interested in our land technology segment. If we reach the contracting stage, we are open to the transfer of technology and the production processes of our equipment in allied countries, should that be the assumptions and requirements of our clients.

Thank you for this conversation.