The French Government is reportedly set to award a contract for the modernisation of the French Army's Scorpion vehicle this year, despite budgetary constraints.
Volvo military and security division chairman Stefano Chmielewski was quoted by DefenseNews as saying: "We have negotiated in a confident manner and in a good partnership as an industrial group with the Direction Générale de l'Armement [DGA].
"An understanding has been reached and we are waiting with confidence for the government to approve.
"The industrial team reached the understanding in the summer, which included specifications [and] what we'll deliver, and [it now]needs to be approved by the authorities."
Comprising Renault Trucks Defense (RTD), Nexter and Thales, the team is conducting negotiations to design, develop and build two armoured vehicles, which will serve as the backbone of the Scorpion fleet.
The vehicles include the véhicule blindé multirole (VBMR), a troop carrier, and engin blindé de reconnaissance et de combat (EBRC), a fighting vehicle scheduled to be fitted with missiles and a 40mm cannon.
An unnamed industry executive said the government has earmarked a €5bn budget for the first phase of the Scorpion programme in the 2014 to 2019 military budget law.
The first phase accounts for half of the €10bn budgeted for the whole modernisation project, which is spread across three military budget laws spanning 20 to 25 years.
Another industry executive said that the VBMR and EBRC vehicles, also called engin blindé multirole (EBMR), could be delivered for system evaluation in 2017 or 2018, with prototype delivery set for around 2018 to 2019, followed by delivery of production vehicles.
With a budget ranging from €4bn to €6bn, the EBMR contracts are expected to include a new production line, phased delivery and ten years of service.
According to a third industry executive, the DGA has lined up an award of programme contracts next month, which will go into effect at the end of the year.
The Scorpion project covers the provision of a GPS-based system for allied blue forces, training simulation, a highly integrated combat information system and an upgrade of the Leclerc tank.
Under the terms of the project, RTD will work on the engine and driveline, while Nexter and Thales will focus on the hull, and supply electronics and network, respectively.